Financial Crime World

Risk Priority: Solomon Islands Faces High-Level Money Laundering and Financing of Terrorism Threats

A comprehensive report has identified a plethora of money laundering (ML) and financing of terrorism (FT) risks facing the Solomon Islands, highlighting the need for urgent attention and prioritization.

Risk Assessment

The report assessed various sectors, including banking, finance, money transfer services, and cash dealers, concluding that all of the identified threats posed Very High or High-level ML/FT risks. However, with limited resources and capacity, it is impossible to immediately implement all necessary mitigating strategies. Therefore, a risk prioritization approach is essential.

Prioritizing Risks

In prioritizing ML/FT risks, underlying factors must be considered, including:

  • Inadequate resourcing of supervisory agencies
  • Insufficient recording of statistics
  • Lack of effective supervision of financial institutions

Addressing these underlying issues will help better understand and address specific ML/FT threats and vulnerabilities.

Financing of Terrorism: A Growing Concern

While there have been no identified cases of financing of terrorism in the Solomon Islands, experts warn that the likelihood of FT threats will increase due to:

  • Global terrorism activities
  • Social media growth
  • High youth unemployment

The Counter-Terrorism Act 2009 creates offenses related to terrorist acts and financing.

Challenges and Recommendations

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The report identified several challenges and vulnerabilities related to FT, including:

Capacity

  • Resource constraints
  • Corruption
  • Lack of training for law enforcement and border security officials

Geographic and Infrastructure

  • Effective policing of borders is a difficult task requiring more resources and capabilities than available

Population

  • High unemployment rates may lead to greater concerns about funds generating predicate crimes, including FT

Laws

  • The government can prosecute terrorists and financiers under the CT Act 2009 but requires additional training for judiciary members

Cooperation and Coordination

  • Law enforcement bodies lack sufficient interagency cooperation and information sharing capabilities regarding FT

International Cooperation

  • SI should seek to increase law enforcement capacity through bilateral and multilateral assistance programs

Courts and Judiciary

  • The judiciary is likely equipped to hear cases involving terrorism and FT but requires additional training

The report emphasized the need for:

  • Increased international cooperation
  • Improved border security
  • Strengthened institutional capacities to combat ML/FT threats effectively