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Samoa’s Anti-Money Laundering and Combating the Financing of Terrorism Efforts Under Scrutiny

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A recent National Risk Assessment (NRA) has highlighted several concerns with Samoa’s anti-money laundering (AML) and combating the financing of terrorism (CFT) efforts. The assessment, conducted by the Asia-Pacific Group on Money Laundering (APG) and the Financial Action Task Force (FATF), identified several areas where Samoa falls short in its implementation of AML/CFT measures.

Concerns with Private Sector Feedback

One of the key concerns is that private sector organizations have not been providing feedback on the findings of the NRA, which has left financial institutions and designated non-financial businesses and professions without critical information to improve their AML/CFT practices.

Allocation of Resources and Risk-Based Approach

Samoa’s approach to allocating resources and implementing measures to prevent or mitigate money laundering and terrorist financing (ML/TF) is not comprehensive and risk-based. This raises concerns about the potential for ML/TF in this sector.

Offshore Financial Services and Trustee Companies

The NRA identified that trustee companies providing offshore financial services in Samoa may be exempted from certain obligations under the Money Laundering Prevention Act 2007 without a proven low risk. This raises concerns about the potential for ML/TF in this sector.

Deficiencies in AML/CFT Regime

The assessment also highlighted several deficiencies in Samoa’s AML/CFT regime, including:

  • Lack of explicit obligations for financial institutions to understand risks and document their risk assessments.
  • Monitoring of AML/CFT compliance has not been fully extended to requirements on financial institutions and designated non-financial businesses and professions to assess risk and implement measures for risk mitigation.

The NRA also highlighted the need for Samoa to strengthen its legal framework to support targeted financial sanctions (TFS) relating to terrorism and weapons proliferation financing. It was also recommended that Samoa amend several laws, including:

  • International Companies Act 1988
  • Trusts Act 2014
  • Companies Act 2001
  • MLP Act 2007
  • MLP Regulations 2009

Action Items

The FATF has set out a range of action items for Samoa to improve its AML/CFT regime, including:

  1. Provide feedback on findings from the NRA to financial institutions and designated non-financial businesses and professions.
  2. Implement a comprehensive risk-based approach to allocating resources and measures to prevent or mitigate ML/TF.
  3. Ensure that trustee companies providing offshore financial services in Samoa are only exempted from obligations under the MLP Act 2007 if proven low-risk.
  4. Expand monitoring of AML/CFT compliance to requirements on financial institutions and designated non-financial businesses and professions to assess risk and implement measures for risk mitigation.
  5. Strengthen legal framework to support targeted financial sanctions relating to terrorism and weapons proliferation financing.

Consequences

Failure to address these concerns could have serious consequences, including being placed on the FATF’s Public Statement list of countries that require increased scrutiny.