Financial Crime World

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Solomon Islands Takes Steps to Strengthen Anti-Financial Crime Laws

Honiara, Solomon Islands - The government of the Solomon Islands has made significant progress in implementing anti-financial crime laws and regulations, according to a recent assessment by the Financial Action Task Force (FATF).

Key Findings

The FATF conducted a mutual evaluation of the Solomon Islands’ anti-money laundering and combating terrorist financing (AML/CFT) regime in 2019. The assessment found that while there are areas for improvement, the country has made significant strides in implementing key recommendations.

  • Customer Due Diligence: The Solomon Islands was found to be partially compliant with FATF Recommendation R.10, which requires financial institutions to verify the identity of their customers.
  • Record Keeping: The country was also partially compliant with FATF Recommendation R.11, which requires financial institutions to maintain accurate and up-to-date records of transactions.
  • Correspondent Banking: However, the Solomon Islands was found to be non-compliant with FATF Recommendations R.13, which requires countries to regulate and supervise banks that provide services for other banks.

Progress Made

The Solomon Islands has taken significant steps to strengthen its anti-money laundering laws and regulations:

  • New AML/CFT Law: The country introduced a new AML/CFT law in 2019.
  • Financial Intelligence Unit (FIU): The Solomon Islands established an FIU to receive and analyze suspicious transaction reports from financial institutions.
  • Growing Awareness: The FIU has reported that it has received an increasing number of suspicious transaction reports in recent years, indicating a growing awareness among financial institutions of their reporting obligations.

Recommendations

The Solomon Islands is recommended to:

  • Improve Customer Due Diligence: Improve its customer due diligence procedures and ensure that all financial institutions are compliant with FATF Recommendations R.10 and R.11.
  • Strengthen Correspondent Banking Regulation: Strengthen its regulation and supervision of correspondent banking relationships to ensure that banks providing services for other banks comply with AML/CFT regulations.

Conclusion

The Solomon Islands’ progress in implementing anti-financial crime laws and regulations demonstrates the government’s commitment to combating money laundering and terrorist financing. However, there is still work to be done to ensure full compliance with FATF Recommendations and to prevent financial crimes from taking root in the country.