Financial Crime World

Samoan Authorities Strengthen Fight Against Money Laundering and Terrorist Financing

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The government of Samoa has taken significant steps to strengthen its efforts against money laundering (ML) and terrorist financing (TF), in response to a recent report highlighting several shortcomings in the country’s anti-money laundering and combating the financing of terrorism (AML/CFT) system.

Improving Anti-Money Laundering Measures

To address these challenges, Samoa has implemented various measures, including:

  • Designating the police to investigate purely domestic ML cases
  • Tasking the trans-national crime unit with handling international ML cases
  • Establishing a Financial Intelligence Unit (FIU) and licensing financial institutions

Shortcomings in the AML/CFT System

The report identified several areas where Samoa needs to improve, including:

  • Effective supervision and monitoring of financial institutions’ compliance with AML/CFT requirements
  • Insufficient resources and powers for the FIU to conduct regular onsite inspections
  • Supervisors lacking authority to compel or obtain access to relevant records during offsite inspections

Addressing Concerns in the Banking Sector

Samoa’s banking sector is dominated by international banks, which has led to concerns about the risks posed by shell banks and unregulated financial institutions. To address these concerns:

  • International banks are required to establish a physical presence in Samoa
  • Two non-compliant banks have been de-licensed

Strengthening Legislation

The Samoan government has introduced legislation aimed at strengthening its AML/CFT regime, including the MLP Amendment Bill 2003. This bill aims to address several of the report’s recommendations.

Enhancing Resources and Powers

To support the FIU:

  • More qualified staff will be recruited
  • Resources and powers are expected to improve

Conclusion

The report’s findings serve as a wake-up call for Samoa to prioritize the fight against ML and TF, ensuring that its financial system is robust enough to prevent the flow of illicit funds. With continued efforts, Samoa can improve its AML/CFT regime and reduce the risks posed by money laundering and terrorist financing.