Financial Crime World

Here is the converted article in markdown format:

Samoa’s Efforts to Combat Money Laundering and Terrorist Financing Fall Short

A recent evaluation by international authorities has highlighted significant shortcomings in Samoa’s efforts to combat money laundering (ML) and terrorist financing (TF). While the country has made progress in understanding its ML/TF risks, its ability to identify and mitigate actual risks remains inadequate.

Challenges with Trust and Company Service Providers

Trust and company service providers (TCSPs), which play a crucial role in the fight against ML/TF, are struggling to effectively implement their ongoing customer due diligence (CDD) and suspicious transaction reporting (STR) obligations. This is despite strengthened provisions set to take effect from late 2015.

Supervision of TCSPs

Samoa’s supervision of TCSPs has been deemed insufficient, with inadequate frequency and intensity of compliance inspections. The country’s financial intelligence agency, the Money Laundering Prevention Authority (MLPA), also needs to improve its use of financial intelligence in ML investigations.

Key Areas for Improvement

The evaluation highlights several areas where Samoa falls short, including:

  • Inadequate risk-based supervision: Samoa has not introduced a comprehensive, risk-based approach to supervision based on a sound understanding of ML/TF risks at institution and sector level.
  • Insufficient controls: While TCSPs appear to understand and implement requirements to identify the ultimate beneficial owners of international business companies (IBCs) on creation, this information is only updated annually.
  • Low levels of effectiveness in confiscation and financial intelligence: Samoa has a low level of effectiveness in relation to confiscation of criminal proceeds and the use of financial intelligence in ML investigations.

Positive Developments

Despite these shortcomings, Samoa has demonstrated a strong willingness to provide international assistance and has made significant commitments as a party to several international agreements relating to mutual assistance. The country’s authorities are also aware of the inherent risks posed by its offshore sector and have taken some measures recently to address these risks.

Recommendations for Improvement

The evaluation recommends that Samoa:

  • Conduct a comprehensive assessment of its TF risks and of risks associated with the recently established casino sector.
  • Improve its understanding of ML/TF risks and share this information with the private sector.
  • Enhance its AML/CFT systems, including through the development of a national AML/CFT strategy.
  • Urgently consider managing proliferation financing issues.

Conclusion

Overall, while Samoa has made progress in understanding its ML/TF risks, it needs to improve its ability to identify and mitigate actual risks in order to effectively combat these threats.