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

A recent assessment by international authorities has revealed that Samoa’s efforts to combat money laundering (ML) and terrorist financing (TF) have significant shortcomings. While the country has made progress in understanding its ML/TF risks, it still lacks a comprehensive risk-based approach to supervision and fails to effectively implement customer due diligence and suspicious transaction reporting obligations.

Trust and Company Service Providers

The assessment found that trust and company service providers (TCSPs), which play a crucial role in identifying and mitigating ML/TF risks, are generally effective in obtaining beneficial ownership information on creating international business companies (IBCs). However, this information is only updated annually, leaving room for potential misuse. Additionally, TCSPs’ ability to implement ongoing customer due diligence and suspicious transaction reporting obligations remains insufficient.

Supervision of Trust and Company Service Providers

Supervision of TCSPs has also been found to be inadequate, with a lack of in-depth scrutiny and scope. This raises concerns about the effectiveness of Samoa’s anti-money laundering (AML) and counter-terrorist financing (CFT) measures.

Preventing Misuse of Legal Persons and Arrangements

The country has taken some steps to prevent misuse of legal persons and arrangements, including IBCs. However, strengthening controls is still required, particularly in terms of updating beneficial ownership information more frequently.

International Cooperation

Samoa has demonstrated a strong willingness to provide international assistance and has made significant commitments as a party to various international agreements relating to mutual assistance. The country treats all international requests for information as high-priority cases and responds promptly to such requests.

Areas for Improvement

Despite these efforts, Samoa’s AML/CFT measures have been found to be lacking in several areas. The country’s risk assessment does not quantify or estimate the value of domestic or foreign proceeds of crime, nor does it consider the types or volume of threats associated with predicate offenses. The level of domestic proceeds-generating crimes is considered low, with most cases involving relatively low-level fraud and drugs offenses.

Urgent Considerations

The assessment also highlighted a lack of effectiveness in relation to supervision, use of financial intelligence, ML investigations, and confiscation of criminal proceeds. Urgent consideration is required to address proliferation financing issues and develop a national AML/CFT strategy.

Conclusion

Overall, while Samoa has made some progress in understanding its ML/TF risks, it still faces significant challenges in implementing effective AML/CFT measures. The country must take urgent action to strengthen its controls, improve supervision, and increase the use of financial intelligence to combat ML and TF effectively.