Financial Crime World

Lack of Clear Sanctioning Power Hampers Fight Against Financial Crime

The Solomon Islands’ efforts to combat money laundering and terrorist financing (AML/CFT) are being hindered by a lack of clear sanctioning power, according to a recent report.

Uncertainty in Sanctioning Powers

The report highlights that the supervisory powers and sanctioning abilities are split between two entities: CBSI and SIFIU. While CBSI has the power to impose administrative sanctions, SIFIU, which is responsible for AML/CFT supervision, only has penal sanctions that can be imposed through a court order.

This lack of clarity in sanctioning power creates uncertainty and hampers the effectiveness of the country’s AML/CFT regime. The report notes that this issue needs to be addressed urgently to ensure the country’s financial system is protected from criminal activities.

Other Challenges Facing the Solomon Islands’ AML/CFT Regime

The report also highlights several other challenges facing the Solomon Islands’ AML/CFT regime, including:

  • Lack of effective implementation of anti-money laundering obligations in the designated non-financial businesses and professions (DNFBP) sector
  • Weaknesses in laws and procedures related to beneficial ownership information for legal persons and arrangements
  • Limited supervision and monitoring of non-profit organizations (NPOs)
  • Inadequate identification system, which poses a significant challenge to the AML/CFT framework

Progress Made Despite Challenges

Despite these challenges, the report notes that there have been some positive developments in the Solomon Islands’ AML/CFT regime. The country has made progress in implementing its AML/CFT laws and regulations, and there is a receptive attitude amongst stakeholders towards cooperation.

The report also highlights the country’s active membership in regional information-sharing arrangements and its desire to cooperate internationally.

Recommendations

To address these challenges, the report makes several recommendations, including:

  • Strengthening the sanctioning power of SIFIU
  • Improving the implementation of anti-money laundering obligations in the DNFBP sector
  • Enhancing laws and procedures related to beneficial ownership information for legal persons and arrangements
  • Implementing a reliable identification system

The Solomon Islands’ government has been urged to take these recommendations seriously and work towards strengthening its AML/CFT regime to protect its financial system from criminal activities.