BY NED GAGAHE
During the hearing on the Special Economic Zone (SEZ) Bill 2024, Governor of the Central Bank of Solomon Islands (CBSI), presented his concerns to the Bills and Legislation Committee last week, specifically addressing issues related to transparency and anti-money laundering protocols in the SEZ framework.
Dr Luke Forau highlighted the importance of including not only the directors but also the beneficial owners, officers, and shareholders in the application for a development zone licence.
Governor Forau said this aims to ensure greater clarity regarding the true ownership of businesses seeking to operate within the Special Economic Zones, a concern he pointed out as crucial in preventing illicit activities such as money laundering.
“Often, businesses are registered with only the directors visible on the public registry, while the actual owners—the beneficial owners—remain obscured.
“This lack of transparency could indicate potential involvement in illicit activities,” said Forau.
“To combat this, we suggest that the Bill include not only the directors’ names, nationalities, and addresses but also the full details of the beneficial owners, officers, and shareholders.”
Forau further stressed the need for due diligence to be carried out on these individuals to prevent the misuse of Special Economic Zones for illegal purposes.
“It is vital that we enforce a rigorous vetting process for anyone applying for or showing interest in operating within these zones.
“This will help safeguard the integrity of our financial system and ensure that these zones are not exploited for illicit financial flows.”
His statement echoed the concerns of anti-money laundering experts who have long warned that opaque ownership structures can facilitate illegal financial activities.
By introducing such provisions into the SEZ Bill, Forau believes the Solomon Islands can strengthen its efforts to prevent financial crimes and ensure that the benefits of Special Economic Zones are not undermined by criminal enterprises.
The Solomon Islands government views the development of SEZs and Economic Growth Centers as key to expanding economic activity throughout the country, aiming to increase industrialization, exports, and employment opportunities.
With the SEZ Bill currently under parliamentary review, the ongoing inquiry into the Bill by the Bills and Legislation Committee is expected to ensure that the legislation aligns with the national interest.
The SEZ Bill, which has been in the making for over a decade, is poised to be a cornerstone of economic growth in the Solomon Islands.
The inquiry process, which began on March 7, 2025, will continue to examine the Bill’s provisions, with a focus on ensuring that the framework supports both economic development and financial integrity.
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