SOLOMON ISLANDS FINANCIAL INTELLIGENCE UNIT
The Solomon Islands Financial Intelligence Unit (SIFIU) was established in the Bank following the publication of a gazette notice by the Minister of Justice on the coming into force of the Part 1 of the Money Laundering and Proceed of Crime Act (MLPC) 2002 as amended in April of 2005.
As a result, CBSI assisted the Anti-Money Laundering Commission (AMLC) established under the MLPC to recruit a Financial Analyst for the FIU who commenced employment with the Bank since September 2005. Under section II (2) of the MLPC, the AMLC is empowered to inter alia:
- receive reports of suspicious transactions issued by financial institutions and cash dealers pursuant to section 14(1) of the Money Laundering and Proceeds of Crime Act 2002 (No. 5 of 2002);
- send reports to the appropriate law enforcement authorities, if having considered the report, the AMLC has reasonable grounds to believe the transaction is suspicious;
- enter the premises of any financial institution or cash dealer to inspect any record kept pursuant to section 14(1) of the Money Laundering and Proceeds of Crime Act 2002 (No. 5 of 2002) (requirement to report suspicious transactions) and ask any questions relating to such record and to make notes and take copies of the whole or any part of the record;
- send any information derived from such an inspection to the appropriate law enforcement authorities if the AMLC has reasonable grounds to suspect that a transaction involves proceeds of crime;
- receive information and reports provided under section 12 and information provided to the Unit by any agency of another Country, information provided to the Unit by supervisory authority, or any law enforcement agency in Solomon Islands or otherwise or any government agency or institution in Solomon Islands or otherwise. and any other information voluntarily provided to the Unit about serious offence, a money laundering offence, the offence of the financing of terrorism, or a violation of this Act;
- analyse and assess all reports and information;
- destroy a suspicious transaction report received or collected on the expiry of six years after the date of receipt of the report if there has been no further activity or information relating to the report or the person named in the report, or six years from the date of the last activity relating to the person or report;
- compile statistics and records, and may disseminate information within Solomon Islands or elsewhere and make recommendations arising out of any information received;
- issue guidelines to financial institution or cash dealers in relation to customer identification, record keeping and reporting obligations, and the identification of suspicious transactions;
- where appropriate, periodically provide feedback to financial institution or cash dealers and relevant government departments, offices, agencies and institutions regarding outcomes relating to the reports or information provided under this Act;
- request information or reports from financial institution or cash dealers under section14;
- make enquiries with a financial institution or cash dealer whether or not a suspicious transaction has been reported;
- for transactions or transfers that occurred prior to the entry into force of this Act, require a financial institution or cash dealer to disclose records in the financial institution or cash dealer’s possession, custody or control that pertain to transactions or transfers for a particular account or person, and for a particular time period;
- enter the premises of any financial institution or cash dealer during ordinary business hours to inspect any records kept pursuant to this Act, ask any questions of any employee of the financial institution or cash dealer relating to such records, and make notes and take copies of the records;
- collect any information that the Unit considers relevant to serious offences, money laundering activities, the financing of terrorism or breach of this Act whether or not publicly available, including commercially available databases, or information that is collected or maintained, including information that is stored in databases maintained by government agencies and institutions;
- obtain from any Department any records of a person under investigation for committing, or attempting to commit, a serious offence, a money laundering offence, an offence of the financing of terrorism or a breach of this Act;
- obtain from any telecommunications company or authority established in Solomon Islands, telephone call records of a person under investigation for committing, or attempting to commit, a serious offence, a money laundering offence, an offence of the financing of terrorism or a breach of this Act;
- act on behalf of Solomon Islands in seeking information from any foreign government agency, foreign law enforcement agency, foreign supervisory authority and foreign auditing authority for purposes of this Act;
- refer any report, and information pertaining to that report, to the appropriate law enforcement agency in Solomon Islands if, on the basis of its analysis and assessment, the Unit has reasonable grounds to suspect that a transaction or any other activity would be relevant to the investigation or prosecution of a serious offence, money laundering offence, or terrorist financing offence, and in connection therewith, the Unit may send a copy of such referral or information to the relevant supervisory authority;
- instruct any financial institution to take such steps as may be appropriate in relation to any information or report received by the Unit, to enforce compliance with this Act or to facilitate any investigation anticipated by the Unit or a law enforcement agency;
- if on reasonable grounds to suspect that a transaction or attempted transaction may involve a serious offence, money laundering offence, or terrorist financing offence, direct in writing that the financial institution or cash dealer concerned either proceed or refrain from proceeding with the transaction or attempted transaction, for a period to be determined by the Unit –
- any direction shall not exceed five working days if the direction is in writing;
- any direction given orally shall not exceed twenty-four hours and shall be confirmed in writing within twenty-four hours of the oral direction;
- before the expiration of five days direction the Unit may apply to a judge for an extension of the period of the direction.
- any direction shall not exceed five working days if the direction is in writing;
- ask questions or obtain further information on persons or transactions referred to in a report made to it pursuant to this Act;
- provide training programs for financial institution or cash dealers in relation to customer identification, record keeping and reporting obligations, and the identification of suspicious transactions;
- Conduct research into trends and developments in the area of money laundering and the financing of terrorism and improved ways of detecting, preventing and deterring money laundering and the financing of terrorist activities;
- educate the public and create awareness on matters relating to money laundering and the financing of terrorism;
- disclose any report, or information derived from such report, to any government department, office or agency subject to the confidentiality requirements of this Act;
- disclose any report, or information derived from such report, to a foreign or government institution or agency, or any international organization, in accordance with this Act;
- liaise with, and enter into any agreement or arrangement with, any foreign government institution or agency, or any international organization, regarding the exchange of information under this Act; and
- report in writing to the Commission prior to the end of each financial year on the activities of the Unit during the previous year and the expected activities of the Unit during the subsequent year, without disclosing confidential information or information that may jeopardise an ongoing investigation or prosecution.
The Unit may apply for a production order, or a restraining order or a monitoring order, or a search warrant from a judge of the High Court to obtain information and evidence relevant to an investigation or prosecution of a serious offence, money laundering offence, terrorist financing offence or offence under this Act.
The Second Part of the MLPC Act 2002 will subject all the financial institutions and cash dealers to report all suspicious transactions report (STR) to the FIU. This is anticipated to be in force in 2006 therefore the FIU task now is to educate all stake holders and especially the reporting entities in the economy on their various responsibilities under this legislation (MLPC Act) 2002. It is planned that the FIU will conduct two workshops in 2006 for this purpose, one staged in February and the other in October. The target attendees of these two awareness workshops will be the commercial banks, insurance companies, Immigration, Customs, Forestry, Fisheries, Department of Finance, casino’s and the Royal Solomon Islands Police.
The initial funding of the FIU will be provided by the Australian Government under the RAMSI assistance and Solomon Islands Government through the Central Bank of Solomon Islands. The funding will be for three years beginning in 2006. The Solomon Islands Government will fund the FIU after 2009.
In October a team from the IMF legal department and a representative from the Australian Government’s Attorney General’s Department, Anti-Money Laundering Assistance Team (AMLAT) visited the FIU. During this visit a member of the IMF team gave initial training to the FIU Analyst on how to set up his office and presented a general overview of the officer’s duties. While in Honiara, the representatives of IMF and AMLAT developed a coordinated approach to the technical assistance to develop the SIFIU. The proposed training program along with the budget was submitted to AMLC for approval.
In terms of reporting, the FIU Analyst reports directly to the AMLC on operational matters. CBSI only provides administrative support to the Unit. The Pacific Forum Secretariat also contributed to the training of the FIU Analyst by sponsoring his travel and upkeep while attending the Asia/Pacific Group on Money Laundering (APG) Typologies Workshop held in Nadi in late October 2005. The FIU Analyst also attended a training workshop held in Sydney on the use of a software program that would be used to store and analyze the Suspicious Transactions Reports (STR) conducted by AUSTRAC. Now that the AMLC is formally established, the Unit is expected to begin its work in 2006 after some necessary office renovations are completed and the office equipment is installed.