Countries/Jurisdictions of Primary Concern - Solomon Islands
Solomon Islands is not considered a major financial center. It has a relatively stable banking system closely integrated with the financial systems of Australia and New Zealand. In general, the risk of money laundering and terrorism financing in the Solomon Islands is very low given the country’s isolated geographic location and very small community, which precludes anonymity. Corruption continues to be the main source of illegal proceeds. Smuggling, environmental crimes, and the proliferation of counterfeit goods also are problems in the country. A risk assessment conducted by the Solomon Islands Financial Intelligence Unit (SIFIU) found that money laundering is often associated with fraud, illegal logging and fishing, and robbery. Foreign destinations for the laundered proceeds include China, Australia, Malaysia, and Singapore. The SIFIU suspects Asian logging vessels (particularly Malaysian) bring counterfeit currency into the Solomon Islands to finance forestry operations. Customs fraud and tax evasion are also common.
For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: http://www.state.gov/j/ct/rls/crt/
Do FINANCIAL INSTITUTIONs engage in currency transactions related to international narcotics trafficking that include significant amounts of US currency; currency derived from illegal sales in the U.S.; or illegal drug sales that otherwise significantly affect the U.S.: NO
criminalizATION OF money laundering:
“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes
Are legal persons covered: criminally: YES civilly: NO
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES
KYC covered entities: Banks, credit institutions, credit unions, insurance and securities companies, casinos, and bullion dealers
Number of STRs received and time frame: 49 in 2012
Number of CTRs received and time frame: 22,707 in 2012
STR covered entities: Banks, credit institutions, bullion dealers, credit unions, casinos, and insurance companies and intermediaries
money laundering criminal Prosecutions/convictions:
Prosecutions: 0 in 2013
Convictions: 0 in 2013
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: YES
With other governments/jurisdictions: YES
Solomon Islands is a member of the Asia/Pacific Group on Money Laundering (APG), a FATF-style regional body. Its most recent mutual evaluation can be found at: http://www.apgml.org/documents/search-results.aspx?keywords=Solomon+Islands
Enforcement and implementation issues and comments:
The Government of the Solomon Islands has enacted several key reforms to strengthen its AML/CFT regime and has taken steps to combat corruption, including the formation of an anti-corruption task force. Yet high level corruption remains a serious problem in the Solomon Islands and one that constitutes a high priority for the government.
The SIFIU lacks capacity and continues to be understaffed, and the Royal Solomon Islands Police Force does not have the expertise and personnel to investigate sophisticated financial crimes. There has been only one successful conviction for money laundering, and no incidents of terrorism financing. The government also lacks the ability to freeze terrorist assets in accordance with UNSCRs 1267 and 1373.
The Solomon Islands should continue to develop its AML/CFT programs and procedures. The government should develop and implement a comprehensive system for the declaration or disclosure of the cross-border transportation of cash. Currently, a declarations system is in place only for passengers traveling by air. This system should be extended to passengers traveling by sea, and applied to postal cargo as well. The Solomon Islands should become a party to the UN Convention against Transnational Organized Crime and the 1988 UN Drug Convention.