Private Enterprise and Financial Institutions Left to Shoulder Burden of Anti-Money Laundering Efforts

A recent review of international experience has shown that the detection of money laundering, terrorist financing, and proliferation financing is largely ineffective when left solely to financial institutions. In fact, it can divert attention away from larger- scale money laundering towards smaller, more obvious forms.

The Burden on Financial Institutions

Financial institutions are already burdened with the cost of detecting and reporting these offenses, which not only requires significant resources but also results in lost profits due to the need to turn away profitable business to prevent laundering. Furthermore, a significant number of financial institutions have been found to have failed to detect or report money laundering, and some have even actively engaged in money laundering and sanctions avoidance for profit.

The Need for Assistance

Agencies of the Money Laundering Prevention Task Force acknowledge that detection can be assisted by financial institutions but cannot be left solely to them. Instead, they will:

Train their staff to understand these offenses
Provide assistance to regulated entities to detect and report suspicious transactions

The Task Force’s Role

The Task Force will also actively search their own data holdings for indicators of money laundering, terrorist financing, and proliferation financing and take appropriate action to disrupt and deter these activities.

Deterrence and Disruption

Deterrence requires a genuine perception of risk among offenders and would-be offenders that they will be identified, caught, and punished
The Task Force will work to create this perception by increasing the likelihood of detection and prosecution
Disruption is also crucial in preventing money laundering, terrorist financing, and proliferation financing from occurring in the first place. The Task Force will work with financial institutions to identify and disrupt these activities at their source

Testing and Evaluation

Regular testing of anti-money laundering (AML) systems is essential to ensure effectiveness. The Task Force will:

Document its testing procedures
Take corrective measures to address identified deficiencies

The fight against profit-driven crime such as drug supply, corruption, fraud, and tax evasion can only be effective if agencies with different powers, information, and skills work closely together. The Task Force members will share information and personnel freely in both formal and informal arrangements.

Focus on Facilitators

AML is most effective when applied to those who facilitate money laundering, such as those who assist through the formation of companies. The Task Force resources will be targeted towards these facilitators and those people, entities, or syndicates that engage in the laundering of other people’s proceeds.

High-Risk Areas

The Task Force will apply its resources to known high-risk areas and activities before moving on to lower-order risks. This includes conducting regular assessments of money laundering, terrorist financing, and proliferation financing risks.

Conclusion

In conclusion, the private enterprise and financial institutions are left to shoulder the burden of anti-money laundering efforts in Samoa. It is essential that they work closely with the Money Laundering Prevention Task Force to detect, disrupt, and deter these offenses effectively.