Lolo calls plan to designate AS as a "high risk" third world country "unreasonable"
Pago Pago, AMERICAN SAMOA — The European Union’s planned designation of American Samoa as a “high risk” third world country, presenting strategic deficiencies in its regime for anti-money laundering (AML) and counter-terrorism financing (CTF) is “unreasonable” because the US territory follows stringent federal financial institution laws and regulations.
This is according to Gov. Lolo Matalasi Moliga’s Feb. 8th letter, which thanked Scott Rembrandt- Assistant Director for Strategic Policy in the Office of Terrorist Financing and Financial Crimes at the U.S. Treasury Department for bringing to ASG’s attention the EU’s planned “high risk” designation for American Samoa, a US territory.
“We feel this designation to be entirely unreasonable,” Lolo wrote Rembrandt, and explained that financial institutions in the territory, with the exception of one, are federally-regulated institutions subject to the full scheme of US law and regulation governing every financial institution doing business in the U.S.
They are subject to the same AML, CTF and “know your customer (KYC) protocols as your local bank down the street,” Lolo further explained. “They file suspicious activity reports with the Financial Crimes Enforcement Network under the same criteria as used across the United States.”
In the case of a major Australian-owned international bank doing business here, “their KYC standards are more rigid than those required under US law and regulations,” said the governor, referring to ANZ bank, which is owned by the Australia and New Zealand Banking Group LTD.
Lolo explained that the only non-federally regulated institution in the territory is the ASG owned Territorial Bank of American Samoa (TBAS), which is a “de novo” created to fill the void to be left behind with the pending departure of Bank of Hawaii.
Although a member of the Federal Reserve Bank, TBAS “is not yet insured” by the Federal Deposit Insurance Corporation (FDIC), Lolo said, noting that TBAS is being managed by a team of experienced banking professionals fully in accord with US banking standards, “as it is our intent to privatize the bank in connection with an application to the FDIC for insurance”.
In addition to federal regulatory schemes around the financial services industry, Lolo informed Rembrandt that American Samoa is integrated into the US Internal Revenue Service (IRS) through the ASG Tax Office.
The governor shared with Rembrandt a Dec. 27, 2017 letter from US Treasury Secretary Steven T. Mnuchin to Jeppe Tranholm-Mikkelsen, the Secretary-General of the Council of the EU, objecting to the inclusion of American Samoa and Guam in the EU’s “non-cooperative tax jurisdictions” blacklist.
Mnuchin had recommended the removal of the two territories from the list but as of last week, American Samoa and Guam remain on the list, according to the EU website, which also shows that Samoa, the US Virgin Islands, and Trinidad and Tobago also remain on the list.
(See Samoa News Dec. 29, 2017 edition for details).
Lolo informed Rembrandt that Mnuchin’s letter “very articulately spells out our status.”
“We in American Samoa are not asking for special treatment. We are only asking to be treated like the part of the fabric of American life which we are,” Lolo wrote. “We very much look forward to your being able to assist us in reversing these unreasonable steps being taken by the European Union.”
Copies of the governor’s letter are sent to nine individuals including Interior Assistant Secretary for Insular and International Affairs, Douglas W. Domenech; IRS official for US territories, Dee Robinson Ruthowski; and Congresswoman Aumua Amata.