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Cook Islands Financial Intelligence Unit Launches Enhanced Supervisory Inspections

The Cook Islands Financial Intelligence Unit (FIU) has announced a new approach to supervising reporting institutions (RI) in the country, aimed at ensuring compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) regulations.

Risk-Based Approach

Under the enhanced supervisory inspections, the FIU will use a risk-based approach to monitor RI’s compliance with AML/CFT requirements. The inspections will be informed by desk-based monitoring and review of material provided by the RI’s, including their risk assessments, internal compliance programs, and training records.

Inspections and Reviews

The FIU will conduct thematic reviews on specific areas of an RI’s compliance program at any time, as well as full-on site inspections involving:

  • Interviews with management, compliance, and front-line staff
  • Reviews of relevant documentation
  • Testing controls

Feedback and Response

The FIU will provide regular feedback on its monitoring activities, including a feedback report to each RI and sector-level feedback where applicable. In cases of non-compliance, the FIU may use a range of tools to deliver a timely, effective, and proportionate response, which could include:

  • Further inquiry
  • Notice
  • Warning
  • Enforceable undertakings

Cooperation with Other Agencies

The FIU has emphasized the importance of cooperation with other agencies, including the Financial Services Commission (FSC), Police, Customs, Tax, Crown Law, and Immigration. The agency will engage with these partners through the National Coordination Committee to share information and best practices in AML/CFT supervision.

Commitment to Compliance

The Cook Islands FIU is committed to ensuring that RI’s comply with AML/CFT requirements and is working to identify and address any non-compliance behavior early on. To achieve this, the agency will take into account all relevant information provided by international counterparts, including typology reports and statements from global AML/CFT bodies.

What You Need to Know

  • Reporting institutions must provide the Cook Islands FIU with certain materials, including:
    • Risk assessments
    • Internal compliance programs
    • Training records
    • Suspicious activity reports
  • The FIU will conduct desk-based monitoring and reviews of material provided by RI’s, as well as on-site inspections and thematic reviews.
  • RI’s are expected to test and assess their compliance programs regularly to ensure they comply with AML/CFT requirements.
  • Non-compliance may result in a range of responses from the FIU, including further inquiry, notice, warning, or enforceable undertakings.

Information Requested by Cook Islands FIU

The Cook Islands FIU has requested that RI’s provide certain information by [DD MM 2018], including:

  • General information, such as risk and compliance reports and organizational reporting structure
  • AML/CFT policies and procedures, including risk assessments and internal compliance programs
  • AML/CFT training records and evidence of staff attendance
  • Internal monitoring and documentation of identified unusual transactions
  • Suspicious activity register and reports made to the Financial Intelligence Unit
  • Audits performed on AML/CFT compliance programs and risk assessments

RI’s are encouraged to provide any additional information that may be relevant to their AML/CFT compliance.