Samoa’s AML/CTF Efforts Show Improvement, But Offshore Sector Remains a Concern
Wellington, Samoa
The Samoan government has made significant strides in improving its anti-money laundering and counter-terrorism financing (AML/CFT) efforts since its 2006 mutual evaluation. However, the country’s offshore sector, including international business companies (IBCs), money transfer operators (MTOs), and cross-border cash movements, remains a high-risk area that requires attention.
National Risk Assessment
According to the latest National Risk Assessment (NRA), Samoa’s domestic banking sector is crucial due to its materiality, while the offshore sector presents a higher risk of criminal activity. The NRA notes that the level of proceeds-generating crimes in Samoa appears to be low, with most cases involving relatively low-level fraud and drug-related offenses.
Challenges in the Offshore Sector
Despite this, authorities are aware of the inherent risks posed by the offshore sector and have taken steps to address them. However, a small number of foreign requests for information on Samoan IBCs have been made, indicating possible misuse for money laundering or associated predicate offenses. To date, no investigations have been launched or charges filed as a result.
Importance of International Cooperation
Samoa’s NRA also highlights the importance of international cooperation in combating AML/CFT threats. The country has achieved strong results in this area, but some deficiencies remain, including in relation to criminalization and prevention of money laundering, terrorist financing, and proliferation financing.
Areas for Improvement
The report notes that Samoa’s understanding of its ML/TF risks has improved, with efforts underway to identify, assess, and understand these risks. However, the NRAs do not sufficiently consider the nature and scope of proceeds-generating crimes, both domestic and foreign, and their associated risks.
Additionally, the lack of ongoing due diligence by trust and company service providers (TCSPs) on IBCs raises concerns about their ability to detect misuse. The report also recommends that Samoa conduct a more comprehensive assessment of its TF risks and those associated with the recently established casino sector.
Recommendations
To improve its AML/CFT efforts, the government is encouraged to:
- Develop a national strategy
- Enhance operational effectiveness
- Urgently consider managing proliferation financing issues
While progress has been made, continued attention is required to address the offshore sector’s high-risk nature and ensure that Samoa remains compliant with international standards.