On-shore VASP in Samoa

Exchanges: There is no framework for licensing crypto-to-fiat or crypto-to-crypto exchanges.

Custody Providers: No specific license for virtual asset custody.

Payment Processors: If a payment processor facilitates transactions involving virtual assets, it would not fall under a specific VA license. If it also deals with fiat currency and cross-border remittances, it might fall under the general financial services laws, which are stringent.

Licensing Regime: Not established for VASPs.

Registration Regime: Not established for VASPs.

Capital Requirements: No specific capital requirements for VASPs. For traditional financial institutions licensed under the Financial Institutions Act, substantial capital requirements exist, but these are not currently applied to crypto businesses directly.

AML/KYC Requirements: This is the most crucial area where virtual asset service providers would face obligations. Samoa has a robust AML/CFT framework, primarily governed by the Proceeds of Crime Act 2007 and supervised by the Financial Intelligence Unit (FIU).

While not explicitly listing "virtual asset service providers," the definitions of "financial institution" and "designated non-financial businesses and professions (DNFBP)" under the Act are broad enough that entities dealing with virtual assets could be interpreted as subject to AML/CFT obligations if their activities constitute dealing in "funds" or "property."

Customer Due Diligence (CDD) / Know Your Customer (KYC): Identifying and verifying the identity of customers and beneficial owners.

Monitoring Transactions: Screening for suspicious transactions.

Record-Keeping: Maintaining records of transactions and customer identification.

Reporting: Reporting suspicious transactions to the FIU.

Risk Assessments: Conducting regular risk assessments.

Local Presence: Any company registered and operating in Samoa is required to have a registered office in Samoa and comply with local company law requirements. This typically means having a physical address and potentially local directors/staff, depending on the scale of operations.

Company Registration: Register the company with the Ministry of Commerce, Industry and Labour (MCIL) under the Companies Act. This involves submitting incorporation documents, articles of association, details of directors and shareholders, and paying fees.

Business License: Apply for a general business license from the MCIL.

Tax Registration: Register with the Ministry of Customs and Revenue (MCR) for tax purposes (e.g., Income Tax, VAGST).

Central Bank of Samoa (CBS):

The CBS has issued warnings and advisories regarding cryptocurrencies. While they don't provide a licensing framework, their stance is crucial. You can find their official statements and publications on their website.

Proceeds of Crime Act 2007 (as amended): This is the primary legislation for AML/CFT in Samoa. Any entity operating in Samoa, especially if dealing with monetary value or funds, would fall under its purview for AML/CFT compliance.

Financial Intelligence Unit (FIU) Samoa: The FIU is responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other financial information to combat money laundering and terrorist financing. They would be the enforcement body for AML/CFT compliance.

Money Laundering Prevention Amendment Act 2021: This crucial amendment specifically expanded the scope of the MLPA 2007 to include Virtual Asset Service Providers (VASPs) as "financial institutions" or "reporting entities," bringing them under the AML/CFT obligations. This aligns Samoa with FATF Recommendation 15 on new technologies.

Money Laundering Prevention Act 2007 (MLPA 2007): This is the principal AML/CFT legislation. It mandates reporting entities (which typically include VASPs, even if not explicitly named, under broader definitions of financial institutions or through specific guidance/regulations) to implement measures to prevent money laundering and terrorist financing. This includes identifying and freezing assets of designated persons and entities.

Money Laundering Prevention Regulations 2008: These regulations provide more detailed rules and procedures for implementing the MLPA.

Financial Intelligence Unit Act 2007: Establishes the Financial Intelligence Unit (FIU) and outlines its powers and functions.

Prevention and Suppression of Terrorism Act 2002 (PSTA 2002): This Act provides the legal basis for preventing and suppressing terrorism financing, including the freezing of assets of designated terrorist individuals and entities as mandated by UN Security Council Resolutions.

Exchange between virtual assets and fiat currencies.

Exchange between one or more forms of virtual assets.

Transfer of virtual assets.

Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.

Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.

Identification and Verification:

For Individuals: Obtaining and verifying name, residential address, date of birth, nationality, and a unique identification number (e.g., passport, national ID card). Verification typically requires independent, reliable source documents.

For Legal Entities/Arrangements (e.g., companies, trusts): Obtaining and verifying the name, legal form, proof of existence, powers that bind the entity, and the identity of relevant persons (e.g., directors, senior managing officials).

Beneficial Ownership: Identifying and verifying the identity of the beneficial owner(s) of the customer, and taking reasonable measures to understand the ownership and control structure of legal persons and arrangements.

Purpose and Intended Nature of the Business Relationship: Understanding the purpose and intended nature of the business relationship or occasional transaction.

Ongoing Monitoring: Continuously monitoring the business relationship, including scrutiny of transactions undertaken throughout the course of that relationship, to ensure that the transactions are consistent with the VASP’s knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds.

Enhanced Due Diligence (EDD): Applying EDD for higher-risk customers, business relationships, and transactions. This includes situations involving:

Politically Exposed Persons (PEPs).

Customers from high-risk jurisdictions.

Complex, unusually large transactions, or unusual patterns of transactions.

Business relationships and transactions with no apparent economic or lawful purpose.

Simplified Due Diligence (SDD): Permitted in specified low-risk situations, as defined by regulations or FIU guidance, where adequate measures exist to mitigate the risk.

Reporting Obligation: If a VASP knows, suspects, or has reasonable grounds to suspect that funds or transactions (regardless of amount) are linked to money laundering, terrorism financing, or other criminal activity, it must report these suspicions to the FIU without delay.

No Tipping-Off: VASPs and their employees are prohibited from disclosing to the customer or any third party that a STR has been or will be made, or that an investigation is being conducted.

CDD Records: All records obtained through CDD procedures (e.g., identification documents, verification data).

Issuing Public Warnings and Advisories: Highlighting the risks associated with cryptocurrencies, stating they are not legal tender, and advising against their use for domestic transactions or investment.

Clarifying Regulatory Status: Emphasizing that no local entities are licensed or authorized to deal in cryptocurrencies within Samoa's jurisdiction.

Maintaining an AML/CFT Framework: While virtual assets are generally outside the regulated financial system, any illicit financial activity using them would fall under general anti-money laundering and counter-financing of terrorism (AML/CFT) laws, but there haven't been public reports of specific crypto-related AML/CFT prosecutions in the last three years.

Proactive Warnings: The regulators' strong warnings may have deterred widespread local adoption or the establishment of crypto businesses without proper authorization.

Lack of Domestic Licensing: Since no entities are licensed, there are fewer specific regulatory conditions to violate, leading to fewer enforcement actions typically seen in regulated markets.

Focus on Consumer Protection: The primary goal seems to be protecting Samoan consumers and maintaining financial stability by discouraging involvement with unregulated crypto activities.

Central Bank of Samoa (CBS) - Public Notice on Virtual Currencies (2018, reaffirmed consistently):

Entity Targeted: General Public / Unregulated Crypto Businesses. Violation Type: N/A (Advisory, not an enforcement action against a specific entity). Penalty Amount: N/A.

Outcome: Advised the public that virtual currencies are not legal tender in Samoa, warned of high risks (volatility, scams, money laundering), and stated that no companies are licensed by the CBS to deal in cryptocurrencies in Samoa. This sets the foundational regulatory stance.