Title: Solomon Islands Faces Scrutiny Over Money Laundering and Financial Crimes
Subtitle: New Mutual Evaluation Report Uncovers Gaps in AML/CFT System
The Solomon Islands are under renewed scrutiny following the publication of a Mutual Evaluation Report by the Asia/Pacific Group on Money Laundering (APG) in late April 2021. The report, which assesses the Solomon Islands’ compliance with the Financial Action Task Force (FATF) 40 Recommendations, revealed several substantial gaps in the country’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) system.
APG Evaluation Identifies Areas for Improvement
The APG, an organization that assesses and monitors member countries’ adherence to the FATF Recommendations, conducted an on-site visit to the Solomon Islands in October 2019. In their evaluation, the team identified several areas where improvements are required:
1. Limited AML/CFT Regulatory Framework for DNFBPs
- The Solomon Islands have a limited regulatory framework for Designated Non-Financial Businesses and Professionals (DNFBPs), including casinos and real estate agencies.
2. Absence of Risk-Based Customer Due Diligence Measures for DNFBPs
- Insufficient customer due diligence measures for DNFBPs are not in place.
3. Inadequate Understanding of AML/CFT Risks and Suspicious Transactions
- A significant number of government agencies, law enforcement bodies, and regulatory authorities lack understanding and knowledge of potential AML/CFT risks and suspicious transactions.
4. Insufficient Resources for Financial Intelligence Units and Related Agencies
- The Solomon Islands’ financial intelligence units and related agencies lack adequate and sufficient resources required to effectively carry out their functions.
5. Concerns Regarding the Effectiveness of Financial Sanctions and Their Implementation
- Concerns have been raised about the effectiveness of financial sanctions and their implementation in the Solomon Islands.
Making Progress But With More to Do
These findings come as a setback to the Solomon Islands, which have been making efforts to strengthen their AML/CFT framework in recent years, enacting legislation on anti-terrorism financing and establishing a Financial Intelligence Unit. The report underscores the need for more comprehensive and effective measures to combat money laundering and terrorist financing in the country.
As a result of these findings, the Solomon Islands will develop an Action Plan to address the identified deficiencies and report progress on their implementation to the APG regularly.
To access the full report, please visit the following websites: