Money laundering worries rejected

The Minister of Finance, Faumuina Tiatia Liuga, has dismissed fears about the risk of money laundering linked to a bill, which had its second reading rushed through Parliament at 10:30, Wednesday night.

“ There is no risk,” Faumuina assured.

“There are no billions invested here to finance terrorism so there is almost zero risk.

“We can’t even afford a rocket with the money that’s being invested (through S.I.F.A.) here.”

S.I.F.A refers to the Samoa International Finance Authority. Faumuina was speaking in Parliament during the second reading of the Trusts Bill 2014.

The House was told that the Head of State, His Highness Tui Atua Tupua Tamasese Efi, had signed to have the bill debated urgently. But Opposition leader, Palusalue Fa’apo II, was alarmed.

“The thing is Mr. Speaker, this bill is as thick as the Bible,” he said referring to the 77-page bill. “This side (Tautua Party) has also cautioned about the possibility of money laundering being involved. My question Mr. Speaker, why are we rushing it?”

The Trusts Bill 2014 will repeal the Trustee Act 1975 and the International Trusts Act 1988. It sets out to modernise existing trust laws “so that our trusts laws will be more attractive and relevant to the international investor.”

According to Faumuina, the idea is to attract a lot of people to invest in Samoa. “Our aim is to benefit from what’s happening in Europe and the Atlantic Ocean because a lot of people who invested there through such trusts have left,” the Minister said. “With this law, we are looking at the markets in China, Taiwan, Singapore, Hong Kong, South Africa and the Middle East.

“That’s why this law has been drafted, using all languages so we can get a share of the market beyond Asia and other regions such as the Middle-East, South America as well as some of our people who would like to invest their money in trusts like this.”

Faumuina said the government’s hope is to lure “millionaires” to use international financial services offered by Samoa through S.I.F.A.

“We want to offer better incentives than the ones being offered by other financial centres so that the rich can come to Samoa to use our services, earning the country money, thus creating more jobs.

“The overarching goal is to attract foreign companies to set up offices in Samoa.” Faleata West M.P., Lealailepule Rimoni Aiafi, supported the bill although he admitted that it was very technical.

“There are ninety clauses (in this bill) and most of the clauses I don't understand,” he said. “It’s very technical but after reading through it, it’s clear that it targets the millionaires to invest money in Samoa in trust.”

Leala urged Parliament to pass the law immediately. He also paid tribute to S.I.F.A.’s contribution to the government, sporting bodies in general and the Manu Samoa.

“It’s no secret that countries like America, From front page Britain and now Australia are trying to close down small financial centres in countries like Samoa and Caribbean and yet its these sort of things that are helping the economies of these small countries in a major way,” said Leala. “All these millionaires want is for their wills and investments to be secured.”

But then Leala issued a warning. “Our job is to be sure that money laundering is not part of it,” he said. He was also concerned about protecting potential investors.

Said he: “We read in the newspapers that some of the names of people investing in these types of forums have been leaked.This is part of an attempt by the big countries to expose that these kinds of investments are unsecured. We should protect them.”

In the end, Leala told Parliament that if it “means more people will invest in Samoa, bringing more money into the country through S.I.F.A, I support it. It’s a useful thing.”

Faleata East M.P., Aveau Niko Palamo agrees.

“When you look at a lot of small countries with no exports, this is the only thing they rely on for survival,” he said.

“So there’s no need to worry about the big countries frowning upon us in terms of these laws. My only advice to S.I.F.A. is to thoroughly check the backgrounds of these people.”

Aveau said the Trusts Bill is also one way of solving the tourism crisis through attracting millionaires with money to spend in Samoa.

But the government needs to step up its game, he said. Looking at the recent past, he pointed out that S.I.F.A. “registered some 2000 companies.”

“And yet when you look at the Cook Islands, it was almost 4000,” he said, suggesting that the government needs to look at ways to match if not better the Cook Islands.

As for investments through trusts, he said: “Switzerland has made a lot of money from this; we all know that because the Israelites invested their money there first.”

Palusalue said the bill should be thoroughly reviewed. “Judging from the Minister’s statements, he hasn't told us why we are rushing it. (I’m not sure) if he’s worried that all the millionaires will take their money to other countries.

“But my concern is that this is a significant law and yet we are hurrying it. “In my opinion, the bill should have been submitted to a Parliament Committee for a thorough review so that nothing is amiss. What’s happening is that we pass a law today and it would be amended tomorrow.”

Deputy Prime Minister, Fonotoe Pierre Lauofo interjected. “We all know that with all bills, they are debated in the House and passed,” he said. “If there is a time when amendments are needed, they would be. This is the norm so it’s nothing new. It’s not a bad thing, especially in business and investments.”

The deputy Prime Minister told the House that “it’s hard to keep up with all the changes especially with things like this…”

“There are no laws that are brought in today and amended tomorrow,” Fonotoe told the House. “This law is very thorough and it is being implemented by people with specialised knowledge in this area.”

Vaisigano No. 1 M.P., Tufuga Gafoaleata Faitua joined the debate.

“The M.P. from Faleata has just spoken and asked for the bill to be hurried through and now the leader of their side is asking us to slow it down.

“What I want to understand is; why is your side like that?” In response, Palusalue said: “You know what happens when things are rushed. When it comes to money….” Before he could finish, Speaker La’auli Leuatea Polataivao took the floor.

“There’s no need to worry,” he said.

“We have a money laundering act and part of that includes big washing machines to wash people as such if they enter the country.”

The Speaker urged Palu to let it go, citing that “the Head of State has already signed that this (bill) is urgent.

“It means our vehicle cannot reverse now. Time and tide does not wait for us.”

The Speaker added: “We are not the only country where these investors can go to, if we are late tomorrow, other countries will catch them. We need to be quick.”

Laauli said the world must know that “the most secured island in the world is Samoa.” Minister Faumuina applauded the Speaker.

“This law was not rushed. It has taken a long time to prepare,” he said.

“There were representatives from a law firm in Asia that we are working with who came to Samoa and we had a workshop in Savai’i that I attended with the Prime Minister to discuss this law.”

This law, he said, was also “given to the Attorney General who worked with a lawyer from Britain in an effort to compile this bill.”

Still, Palusalue wouldn't budge. He demanded that Minister Faumuina reveal the names of people who are likely to invest through the passage of the law. Told by Faumuina that this was not possible since investors need to see the incentives being offered through the Trust Act 2014 first, Palusalue said he was tired of laws being tabled that mean nothing.

He said: “We even had a law about the establishment of a Stock exchange. Up until now, there is nothing?”

To which Faumuina responded, “In terms of the Financial Centre, U.T.O.S. exists. It has been started by U.T.O.S. and even S.I.F.A. is investing in U.T.O.S., that’s the domestic arm of the stock exchange.” U.T.O.S. stands for Unit Trust of Samoa. The second reading of the International Companies Amendment Bill 2014 was also passed shortly afterwards.