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CBS Governor Fights Back

Written by Pio Sioa
Friday, 04 July 2008
FIGHTING GOVERNOR: Papali’i Tommy Scanlan, Central Bank of Samoa Governor. The Central Bank Governor, Papali’i Tommy Scanlan, has taken a fighting stance against ‘unfair’ reports alleging money laundering in Samoa, among other small island economies. “This is an unfair generalization,” Papali’i told Newsline yesterday “I feel that we are unfairly treated by the allegations after everything that we have done so far to safe guard against the illegal practice.” The Governor’s ire is based on a classic ‘big boys’ bullying ‘small boys’ scenario, of heavyweight economic powers throwing their weight on the ‘fly weights’. Press releases published in local newspapers by the Central Bank boss, sets out a comprehensive account of Samoa’s protective measures already in place against money laundering. Among them are new legislations and the establishment of various monitoring bodies as watchdogs. All are in keeping with required international procedures. “We have our own internal procedures where our commercial banks for example are required to report to the Central Bank any transactions involving large amounts over SAT$30,000,” Papali’i explained. “We’ve also set up an inter-government task force that I Chair, to extend our vigilance to areas like large shipment of imported goods that may set off alarm bells. “In such instances the Head of Customs will inform me and I will then request the Attorney General to run a check and take appropriate actions if necessary.” Governor Papali’i stressed the need to make the international community fully aware of the efforts. The concern is that the support of Samoa’s important financial partners like the World Bank, Asian Development Bank, Europeans Union and others would not be so forthcoming because of the allegations. Governor Papali’i will not admit to a deliberate smear campaign by bigger countries, among them are some of our close neighbours, against smaller island countries. But the accusing fingers may be related to a bigger issue that seems to centre on small countries like Samoa having financial offshore centres. According to Papali’i the ‘big boys’ are putting pressure on small financial offshore centres, like the Samoa International Finance Authority, SIFA, to reveal the identities of companies registered with them. “But we cannot do that because companies who do that are assured confidentiality and once that is taken out, no one will want to use our services anymore.” Financial offshore centres offer tax incentives for overseas companies who may want to undertake contracts outside their own country of operation, to improve on their profit margins. This is normal practice in bigger centres in Asia and Europe that are not even batting an eyelid at the kind of threatening pressure faced by the smaller countries. The bigger countries are claiming that their tax earnings are being affected by companies registering with small finance off shore centres like SIFA. “Our response is that whatever profit the companies registered in our finance offshore centres make, will eventually end up in the country they are based in. “Still they are not prepared to accept that.” The disagreement is being played inside the Organisation for Economic Co-operation and Development, OECD, where small countries are fighting against the dominating influence of the bigger economic powers. Papali’i currently chairs the grouping of small island member countries in the OECD that make up the 90 countries of the world in the organization. The group of bigger and stronger economic powers in the organization is chaired by Japan. Papali’i and his ‘small boys’, including island states in the Caribbean, have been pushing hard for a reciprocal agreement with their bigger counterparts. “We are working on a ‘Process Forward’ agreement where we can all benefit both ways, like in a double tax system where small countries can be compensated in return for giving away information about their clients.” The process however may still have a fair way to go towards reaching an agreement, with meetings lined up to try and iron out differences between OECD. Finance offshore centres are still fairly new in island countries like Samoa, but they are proving to be major contributors to national revenue earnings. “Revenues from our offshore centre, SIFA, currently accounts for 10% of our Gross Domestic Product. Since 1988 , SIFA, has contributed a total of SAT$100 million to the budget.” Papali’i however added that this does not include the benefits of creating business for professional groups like accountant and lawyers. SIFA has also opened up added employment by hiring local staff. Financial support for struggling sports bodies like the rugby union and league, netball, weightlifting and others, are also possible. Comments (0) Subscribe to this comment's feed Write comment Name Email Title Comment
Last Updated ( Friday, 04 July 2008 )

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