Financial Crime World

Samoan Authorities Urged to Strengthen Financial Intelligence Unit

A recent review by the mission has identified several areas of concern that need to be addressed in order to bring Samoa in line with international standards for anti-money laundering and combating the financing of terrorism.

Concerns Identified

The review highlighted several areas of concern, including:

  • Suspicious Transaction Reporting Requirements: The mission recommended that all offshore entities, including trustee companies, be included in the definition of financial institutions and that the scope of the Suspicious Transaction Reporting Act (STRA) be broadened to include comprehensive and substantive requirements.
  • Lack of Powers and Functions: The Ministry of Justice and Courts Administration (MJCA) has never been operational as a Financial Intelligence Unit (FIU), lacking the necessary powers and functions.

Recommendations

The mission made several recommendations, including:

  • Amendments to STRA: To improve the framework for reporting suspicious transactions, extend tipping-off provisions, and protect information reported and persons reporting.
  • Expansion of FIU Powers: To include comprehensive forfeiture of proceeds of crime and confiscation of benefits provisions, as well as the power to make penalty orders where forfeiture is not possible.
  • Regulation of Offshore Banks: To require all offshore banks to establish a real physical presence in Samoa with mind and management in place or face removal of banking license. This would eliminate limitations on access to customer information and enable effective implementation of on-site visits.
  • Enhanced Due Diligence for Company Service Providers: Trustee companies, which primarily function as company service providers dealing with registration and administration of international business companies, should conduct enhanced due diligence, especially with regard to new businesses transferring to the jurisdiction under redomiciliation.

Insurance Supervision

The mission supported authorities’ plans to:

  • Modernize Insurance Legislation: Establish the Central Bank of Samoa (CBS) as the licensing and supervisory entity for domestic insurance companies.
  • Designate Staff for Insurance Supervision: Expand the Financial Institutions Department to designate staff specializing in insurance supervision.

Securities Business and Collective Investment Schemes

The review identified concerns regarding securities business and collective investment schemes, recommending that authorities introduce a basic investment business and securities legislation to:

  • Regulate Fraudulent Provision of Financial Advice: Regulate fraudulent provision of financial advice and product sales to both domestic and international markets.
  • Protect Investors: Ensure the protection of investors by introducing a regulatory framework for securities business and collective investment schemes.

Overall, the review emphasized the need for Samoa to strengthen its financial intelligence unit to meet international standards and prevent money laundering and terrorist financing.