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Samoa Tackles Money Laundering: A Defining Moment for the Country’s Financial Sector
Samoa has made significant strides in combating money laundering with the introduction of the Money Laundering Prevention Act 2000. The legislation, which came into effect on June 14, 2000, aims to prevent and detect money laundering activities in the country.
Background
The Act was enacted following a review of Samoa’s offshore laws conducted with the assistance of the Commonwealth Secretariat in 1996. The review led to significant changes being made to both the Offshore Banking and International Insurance Acts in 1998, including the introduction of gateway provisions and stricter controls on banking and insurance licence holders.
Objectives
The Money Laundering Prevention Act is based on the Commonwealth model, which was chosen due to resource constraints. The objective of the model is to prevent money laundering fairly, without imposing an undue administrative or financial burden on government or financial institutions.
Compliance with International Standards
The Act is in compliance with international standards, as it encompasses the benchmark Forty Recommendations of the Financial Action Task Force (FATF) on Money Laundering. At the regional level, the Act testifies to Samoa’s commitment to the 1992 Honiara Declaration of the Pacific Forum Island nations, which entails having the requisite legislation to strengthen cooperation in the region in efforts to combat transnational crime.
Key Definitions and Penalties
The Act defines key terms such as “money laundering”, “proceeds of crime”, “identification record”, and “competent authority”. The penalties for a person guilty of money laundering include imprisonment for a maximum period of seven years and/or a fine not exceeding SAT 1,000,000 (approximately US$300,000).
Responsibilities
The Act also sets up a Money Laundering Authority within the Central Bank of Samoa, which is charged with obligations such as:
- Receiving reports of suspicious transactions issued by financial institutions
- Considering suspicious transaction reports and referring them for investigation by the competent authority
Coverage
The legislation covers all financial institutions whose activities are listed in Schedule 1 of the Act, including offshore banking business services, insurance business transactions, trust company business, accountants, solicitors, money transmission services, and others. The Act imposes mandatory obligations on financial institutions to comply with “know your customer” principles and other responsibilities.
Mutual Assistance
The Act overrides secrecy obligations in any enactment if there is a money laundering investigation, introduces mutual assistance in relation to money laundering, and makes money laundering an offence for the purposes of extradition or rendition of fugitive offenders.
Awareness and Education
To raise awareness about the Act and their statutory obligations, the newly created Money Laundering Authority has hosted public seminars. The jurisdiction has also endorsed the United Nations Programme Against Money Laundering prior to September 2000 and joined the Asia-Pacific Group (APG) on Money Laundering in June 2000.
International Evaluation
Samoa’s commitment to fighting money laundering is further exemplified by its willingness to be evaluated by international organizations such as the Asia Pacific Group on Money Laundering and the Offshore Group of Banking Supervisors. The authorities view such evaluations as a valuable opportunity to obtain an independent assessment of the performance of regulators in the financial sector and identify areas that require improvement.
Conclusion
The reputation of Samoa as a responsible jurisdiction is crucial, hence the need for continuous review of its operations in light of internationally recognized standards.