Financial Crime World

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International Organised Crime Groups Find Samoa an Attractive Transit Point

A recent report has highlighted Samoa’s vulnerability to international organised crime groups (IOCGs) due to its strategic location, stable economy, and advanced banking system. The Pacific island nation has been found to be an attractive transit point for IOCGs, which use the country as a hub to move goods and money illegally.

Factors Contributing to Samoa’s Attractiveness

  • Stable economy
  • Advanced banking system
  • Reputation as a secrecy haven with low capacity law enforcement
  • Low capacity of law enforcement to detect illegal activities

These factors make it an attractive location for IOCGs to move funds freely without being detected by authorities. The report notes that Samoa’s financial system does not prevent the movement of funds for illegal activities such as bribery and drug trafficking.

Intelligence Gap and International Cooperation

To combat this issue, Samoan authorities have acknowledged an intelligence gap in their understanding of IOCGs’ activities in the country. They plan to engage with international partners to identify sources of intelligence and gather information on IOCGs operating in Samoa.

Assessing Risks and Applying a Risk-Based Approach

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The report highlights several weaknesses in Samoa’s anti-money laundering (AML) and combating the financing of terrorism (CFT) system, including:

  • Lack of a comprehensive, risk-based approach to allocating resources and implementing measures to prevent or mitigate money laundering/terrorist financing.
  • Insufficient monitoring of AML/CFT compliance by financial institutions and designated non-financial businesses and professions.
  • No explicit obligation for financial institutions to understand the risks or document their risk assessments.

To address these weaknesses, Samoan authorities have been tasked with implementing a comprehensive, risk-based approach to AML/CFT. This includes assessing the risks associated with predicate offenses, such as drug trafficking and terrorism financing, and allocating resources accordingly.

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The report also identifies several areas in Samoa’s legislation that need to be tightened to improve the robustness of its AML/CFT system, including:

  • Lack of legislation to support targeted financial sanctions relating to terrorism and weapons proliferation financing.
  • Technical deficiencies in laws such as the International Companies Act, Trusts Act, Companies Act, MLP Act, and MLP Regulations.

To address these issues, Samoan authorities plan to amend existing laws and introduce new legislation to strengthen Samoa’s AML/CFT framework. This will help improve the country’s ability to combat IOCGs and prevent them from using Samoa as a transit point for illegal activities.

Action Items

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  1. Engage with international partners to identify sources of intelligence on IOCGs operating in Samoa.
  2. Implement a comprehensive, risk-based approach to AML/CFT.
  3. Conduct a thorough assessment of the risks associated with predicate offenses and allocate resources accordingly.
  4. Monitor AML/CFT compliance by financial institutions and designated non-financial businesses and professions.
  5. Strengthen Samoa’s legal framework by introducing new legislation and amending existing laws.

By addressing these weaknesses and implementing these action items, Samoa aims to improve its ability to combat IOCGs and prevent them from using the country as a transit point for illegal activities.