Samoan Anti-Money Laundering Regime Lacks Teeth, Experts Say
A recent assessment by international experts has highlighted several shortcomings in Samoa’s anti-money laundering (AML) regime, leaving the country vulnerable to financial crimes.
Assessment Findings
The private sector has been engaged in implementing AML measures, but only general feedback has been provided without specific findings being shared with financial institutions and designated non-financial businesses and professions. Furthermore, Samoa has not adopted a comprehensive risk-based approach to allocating resources and implementing measures to prevent or mitigate money laundering and terrorist financing, resulting in a lack of transparency and accountability in the system.
Concerns about Exemptions
The assessment also highlighted concerns about the exemption granted to trustee companies providing offshore financial services from certain AML requirements. While only one limited exemption has been granted, experts warn that this potentially broad exemption was not based on a proven low risk, but rather on high-risk assessments.
Additionally, there are no explicit obligations for financial institutions to understand risks or document their risk assessments, and monitoring of AML compliance has not fully extended to requirements for assessing risk and implementing measures for risk mitigation.
Legislative Deficiencies
The assessment identified several legislative deficiencies, including a lack of legislation to support targeted financial sanctions related to terrorism and weapons proliferation financing. Experts have called for amendments to existing laws, such as the International Companies Act 1988 and the Trusts Act 2014, to address technical shortcomings.
Conclusion
The experts concluded that Samoa’s AML regime lacks teeth and is in need of significant strengthening to effectively combat money laundering and terrorist financing.
Recommendations
To address these concerns, experts have recommended a comprehensive review of Samoa’s AML framework, including:
- Providing feedback on findings from NRA to financial institutions and designated non-financial businesses and professions
- Implementing a risk-based approach to allocating resources and implementing measures to prevent or mitigate money laundering and terrorist financing
- Ensuring that trustee companies providing offshore financial services are only exempted from certain AML requirements based on proven low-risk assessments
- Expanding monitoring of AML compliance to include requirements for assessing risk and implementing measures for risk mitigation
- Strengthening the legal framework by amending existing laws to address technical deficiencies
Wake-Up Call
The experts’ assessment is a wake-up call for Samoa’s authorities, who must take immediate action to strengthen its AML regime and prevent financial crimes.