Financial Crime World

Samoan Financial Institutions Must Comply with Stricter KYC Regulations, Experts Warn

Combating Money Laundering and Terrorist Financing

As part of efforts to combat money laundering and terrorist financing, Samoa’s Ministry of Justice has emphasized the importance of Know Your Customer (KYC) regulations for financial institutions operating in the country. The Ministry is enforcing Part III and IV of the Money Laundering Prevention Act (MLPA), which requires these institutions to implement a range of measures to ensure compliance.

Key Obligations

To comply with KYC regulations, financial institutions must:

  • Keep detailed records of business transactions for at least five years
  • Develop clear customer acceptance policies and procedures
  • Verify the identity of new customers before establishing a relationship

This means that financial institutions must have a systemic procedure in place for identifying new customers and document their policies for identifying both customers and those acting on their behalf.

Extra Precautions Required

Institutions are also required to take extra precautions when dealing with transactions involving jurisdictions that do not have adequate anti-money laundering systems in place. Additionally, any suspicions of money laundering or terrorist financing must be reported to the Financial Intelligence Unit (FIU) as soon as possible, but no later than two working days.

Consequences of Non-Compliance

Failure to comply with these regulations can result in serious consequences for financial institutions, including:

  • Fines
  • Reputational damage

Experts are warning that it is essential for institutions to take these obligations seriously and invest in robust KYC systems to protect the integrity of the financial sector and prevent illicit activities.

Takeaway

In conclusion, Samoan financial institutions must comply with stricter KYC regulations to combat money laundering and terrorist financing. It is crucial for institutions to prioritize KYC compliance to avoid serious consequences and maintain public trust in the financial sector.