Financial Crime World

SI Faces High-Risk Threats from Money Laundering and Financing of Terrorism

The Solomon Islands (SI) is facing a high-risk threat from money laundering (ML) and financing of terrorism (FT), according to a recent report. The risk priority has been assessed as Very High or High in many areas, highlighting the need for immediate attention.

Vulnerabilities in Key Sectors

The report identifies various vulnerabilities in key sectors such as:

  • Banks
  • Finance companies
  • Money transfer services
  • Money changers
  • Casinos
  • Dealers in precious metals and stones

These sectors are vulnerable to ML/FT threats due to:

  • Lack of adequate resourcing
  • Inadequate recording and maintaining statistics
  • Limited effective supervisory roles

Mitigation Strategies

To mitigate these risks, it is essential to prioritize the ML/FT threats and address underlying issues such as:

  • Lack of adequate resourcing of supervisory and law enforcement agencies
  • Inadequate recording and maintaining statistics relevant to threats and vulnerabilities
  • Limited effective supervisory role for financial institutions and cash dealers
  • Non-enactment of the Anti-Corruption Bill law
  • Urgent need to pursue Counter Terrorism and Financing of Terrorism Programs

Terrorism Financing Threats

The report highlights the possibility of terrorist-related activities in SI, despite no identified cases of financing terrorism. The lack of information or statistical data on terrorism and terrorist-related activities makes it challenging to assess the risk.

However, experts warn that:

  • The growth of social media
  • Youth unemployment
  • Limited programs to counter the financing of terrorism

increase the likelihood of FT within the domestic and regional context.

Counter Terrorism Act 2009

The Counter Terrorism Act 2009 creates the offence of terrorist act and terrorist financing. However, there is a need for more information and statistical data on terrorism-related activities in SI.

Challenges and Recommendations

The report identifies several challenges and recommendations to address ML/FT threats:

  • Capacity: Resource constraints, corruption, lack of training for law enforcement and border security officials, and general capacity issues
  • Geographic and Infrastructure: Border security improvements are necessary, but more resources and capabilities are required
  • Population: Unemployment rates may lead to increased concerns about predicate crimes being committed, including financing of terrorism
  • Laws: The Government of SI is taking measures to fulfill international obligations to combat terrorism and extremism
  • Cooperation and coordination: Law enforcement bodies lack sufficient interagency cooperation and information sharing capabilities regarding terrorism financing
  • International cooperation: Bilateral and multilateral assistance programs are necessary to increase law enforcement capacity
  • Courts and Judiciary: The judiciary needs additional training before hearing cases involving terrorism and terrorism financing
  • Communications: Stemming violent extremism and radicalization through the use of social media is crucial
  • Non-Profit Organizations (NPOs): NPOs are vulnerable to abuse for the purposes of Financing of Terrorism

Conclusion

The Solomon Islands faces significant ML/FT threats due to various vulnerabilities in key sectors. To mitigate these risks, it is essential to prioritize the threats and address underlying issues. The government must take a proactive approach to combating terrorism financing by:

  • Increasing cooperation and coordination
  • Improving border security
  • Addressing unemployment rates

By addressing these challenges, SI can reduce its risk of ML/FT threats and protect its citizens from the devastating effects of terrorism financing.