What is Money Laundering?
- Money Laundering is the process by which criminals attempt to conceal the true origin and ownership of the proceeds of their criminal activities.
- Turning dirty money from criminal activities into clean money.
- Converting dirty money into supposedly legitimate assets.
Three Stages of Money Laundering
- Placement - Money from criminal activity is placed into the financial system (e.g. a bank account).
- Layering - Using multiple transactions to hide the true origin of the funds (e.g. splitting the money and moving it through lots of accounts in various locations).
- Integration - Money passes from the layering stage and is mingled with legitimate money and assets (e.g. purchase of property which can later be sold for legitimate funds).
Money Laundering Must be Stopped Because It Poses Risks to:
- Economic and social stability;
- The reputation of the financial sector;
- Stability of financial institutions;
- The country’s ability to prevent large scale corruption;
- The country’s reputation with regards to adoption of international standards and best practices.
AML Supervision
The Money Laundering Prevention Authority
The Governor of the Central Bank of Samoa is the Money Laundering Prevention Authority (the “Authority”) appointed under section 4(2) of the MLPA to implement and regulate the provisions of the Act.
Money Laundering Prevention Task Force
The Task Force is the advisory body to the Money Laundering Prevention Authority and is established under section 5 of the MLPA.
Its objectives include:
- Close liaison between Government agencies, departments and the FIU;
- Making recommendations to the Authority in respect of issues relating to money laundering or the financing of terrorism.
Members of the Task Force include:
- The Governor as the Chairperso
- The Attorney-General
- The Commissioner of Police
- The CEO of the Samoa International Finance Authority (SIFA)
- The Head of the Customs Department
- The Head of the Immigration Department
- The Director of the FIU
- The CEO of the Ministry of Commerce, Industry & Labour (MCIL)
- The CEO of the Ministry of Finance (MOF); and
- Such other persons as may be appointed by the Minister of Finance, acting on the advice of the MLP Authority
Financial Intelligence Unit (FIU)
The FIU is part of the Central Bank.
Legislation and Regulation
Legislative and Regulatory Framework
Money Laundering Prevention Act 2007 (consolidated version as at December 2015)
Consolidated version means that all amendments have been included in the legislation. For example, these are consolidated versions as at December 2015, which means that the Money Laundering Prevention Act 2007 has all the amendments included in the Act and consolidated up to December 2015. If there are amendments to this law that were done in November 2015, then it has been inserted and consolidated into the Money Laundering Prevention Act 2007.
Primary
The MLPA is administered by the CBS
- Money Laundering Prevention Act (MLPA) 2007
- Money Laundering Prevention Regulations 2009
The Authority issued guidelines under subject 4(3)
- Money Laundering Prevention Guidelines 2010
Others
- Counter Terrorism Act 2014
- Proceeds of Crime Act 2007
- Mutual Assistance in Criminal Matters Act 2007
Obligations of Financial Institutions
Part III and IV of the MLPA stipulates specific obligations of financial institutions:
- Keep relevant records (i.e. “business transactions records”) for a minimum period of 5 years;
- Develop clear customer acceptance policies and procedures;
- Proper identification (commonly known as “know your customer” or “KYC”) is essential;
- Establish a systemic procedure for identifying new customers and should not establish a relationship until the identity of a new customer is satisfactorily verified;
- Document and enforce policies for identification of customers and those acting on their behalf; and
- Extra precautions enforced on transactions received/sent to jurisdictions that do not have adequate AML systems in place.
- Report any suspicious to the FIU as soon as possible after forming a suspicion BUT no later than 2(Two) working days
Last updated 25 Nov 2024