It was an interesting final parliamentary sitting of the year. The new government put through its first bill to change a law, one that will enable Samoa’s name to be omitted from the European Union blacklist.

It is a very good move on the part of the government to push for the Removal of Tax Exemption for International Companies Amendment Bill. It passed its second reading and has been referred to the Revenue Committee for further review before proceeding to its third reading. Indeed, these reforms are necessary to restore Samoa’s international reputation and repair strained relationships with global financial partners.

It was in 2017 when the EU placed Samoa and other countries with weak or no anti-money laundering laws on its list. This simply means that for Samoa to get off the list, laws have to be strengthened so international companies are unable to launder money. The current laws are weak in preventing that from happening.

The work to strengthen the laws has taken time. We hope that it is extensive and satisfies the requirements that the EU has placed.

What has been the impact of the blacklist? The EU's blacklisting of Samoa complicates international business dealings and access to development funding. Samoan entities face higher costs and greater difficulty when conducting financial transactions with overseas institutions. Banks perform more checks on transactions flagged as high-risk, making international business more expensive.

The listing creates a major reputational risk, which can have a damaging impact on the economy, affecting crucial sectors like remittances and tourism. Reputational damage can also strain relationships with key multilateral partners such as the International Monetary Fund (IMF), World Bank, and Asian Development Bank.

The blacklisting also complicates Samoa's ability to attract foreign investment. Samoa may not be eligible for certain types of financial help and direct budget support from the EU, although some assistance has continued despite the listing. The listing can affect the ability to access and mobilise development finance.

EU member countries may apply sanctions, such as higher withholding taxes on payments received in blacklisted jurisdictions, which disincentivise EU companies from investing in Samoa.

The amendment bill is nine years of work of constantly trying to keep up with the high standards set by the EU, and we may be just one more step away from removing ourselves from that list. In 2017, when the EU put Samoa on the list, the action was deemed unfair, and despite the many protests from the previous governments, the name stayed on the blacklist.

The blacklist only made Samoa’s access to international financial markets tough for businesses and banks, without actually impacting the amount of crime passing through the country. Unfair as it may have been, we are still on the blacklist. The government aims to be removed from the EU blacklist by October 2026, with a transition period allowing full implementation of the new tax rules by 2028.