Samoa’s Fight Against Money Laundering and Terrorist Financing: A Mixed Bag

A recent evaluation has revealed that Samoa’s efforts to combat money laundering (ML) and terrorist financing (TF) have shown some improvements, but significant deficiencies remain. The island nation’s trust and company service providers (TCSPs) are effective in obtaining beneficial ownership information on creating international business companies (IBCs), but lack sufficient information to effectively implement ongoing customer due diligence (CDD) and suspicious transaction reporting (STR) obligations.

Supervision: A Work in Progress

Samoa has focused its supervision on higher-risk sectors such as banks, remittance services, and TCSPs. However, the frequency and intensity of compliance inspections are inadequate, and the country lacks a comprehensive, risk-based approach to supervision based on a sound understanding of ML/TF risks.

Strengthening Controls

While Samoa has introduced measures to prevent misuse of legal persons and arrangements, strengthening controls is required. TCSPs understand and implement requirements to identify the ultimate beneficial owners of IBCs on creation, but this information is only updated annually. The country’s competent authorities can generally obtain beneficial ownership information from Samoan TCSPs in a timely manner.

International Cooperation

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. Although a small and under-resourced jurisdiction, it is clear that Samoa treats all international requests as high priority and deals with them accordingly.

Assessment of Risk and Effectiveness

The evaluation found that Samoa has improved its overall understanding of ML/TF risks in recent years but lacks a comprehensive assessment of TF risks and those associated with the recently established casino sector. The country’s level of technical compliance with the Financial Action Task Force (FATF) Standards has improved, but significant deficiencies remain. While some measures are in place to combat ML/TF, low levels of effectiveness have been achieved in several areas.

Call for Urgent Action

The evaluation calls for urgent action to improve Samoa’s AML/CFT policies and strategies to combat ML/TF. The country needs to:

• Develop a national AML/CFT strategy
• Enhance its operational capabilities to effectively manage proliferation financing issues
• Strengthen financial intelligence
• Use of financial information in investigations
• Conduct effective ML investigations

In conclusion, while Samoa has made some progress in combating money laundering and terrorist financing, significant deficiencies remain. Urgent action is needed to address these shortcomings and ensure the country’s AML/CFT systems are effective in preventing and detecting ML/TF offenses.