Banks tighten screw on domestic funds transfer due to suspected money laundering activities
COMMERCIAL banks have begun clamping down on suspected money laundering activities in the domestic market by introducing new measures to curb the growing practice.
These measures include but not limited to disclosing the reason(s) for transfers of funds as well as the source(s) of funding. The new restriction applies to amount of SBD500 or more.
The new restriction applies immediately.
Depositors would be asked to disclose the purpose of the payment as well as the source of funding. It is unclear what action would be taken in the case of depositors refusing to comply.
Two of the four commercial banks – the ANZ and BSP – have begun applying the restrictions.
Reports of the actions by the commercial banks follow unconfirmed reports that foreigners smuggled an estimated USD2.5 million [about SBD20 million] in cash into the country just a week or so before the joint elections on 17 April this year.
How such a large amount of money, particularly in cash, could come into the country undetected is a point of contention. Some say the only way such a large amount of foreign cash could be smuggled into the country undetected would be via diplomatic pouch.
Sources told Solomon Star that while USD500,000 [about SBD4 million] of the funds were spent, the people who smuggled the cash struggled to find ways of disposing of such a huge amount of foreign cash without being exposed.
Under the law, travelers are required to declare SBD50,000.00 in cash to authorities.
The foreigners who brought in the money allegedly found an Asian businessman based in Honiara who was willing to buy off the foreign cash for an estimated SBD16 million in cash. According to one report, the businessman allegedly flew to Port Moresby, Papua New Guinea where Customs uncovered suitcases or boxes full of the USD2 million.
The Honiara businessman was allegedly told by PNG Customs to keep quiet or he would be exposed. How Customs officers in Honiara failed to intercept the consignment remains a mystery.
There are suggestions the USD2.5 million in cash was brought in to pay the costs associated with the campaign to remove the Sogavare-led Democratic Coalition Government for Advancement from office.
Now Minister of Finance and Treasury, Sogavare won his East Choiseul seat for the seventh time with the barest of margin. Some attributed his low voter support to the success of the campaign funded largely by foreign governments.
By Alfred Sasako
