Cook Islands ML/TF/FOP Risk

National Risk Assessment (NRA) for Money Laundering, Terrorist Financing, and Proliferation Financing (ML/TF/FOP) in the Cook Islands

Overview

The National Risk Assessment (NRA) for money laundering, terrorist financing, and proliferation financing (ML/TF/FOP) in the Cook Islands provides an overview of the risks and vulnerabilities associated with these threats in the country.

Key Findings

Risk to Financial System: The Cook Islands’ financial system is at risk of being exploited by ML/TF/FOP due to its small size and lack of resources.
TCSP Vulnerabilities: TCSPs (Trust and Company Service Providers) are at high risk of being associated with ML/TF/FOP activities, particularly when they do not have control over the assets or business activities of entities owned by a trust.
Information Sharing: The relationship between government agencies is good, but there may be a lack of consistent sharing of information with FIU (Financial Intelligence Unit).
Undeclared Cash Detection: The number of instances of undeclared cash being discovered at the border appears low, which may be due to a lack of effective detection methods.
Suspicious Transaction Reporting: The suspicious transaction reporting requirement under FTRA 2017 (the Financial Transactions Reporting Act 2017) is expected to generate increased filing, which will provide valuable information for detecting ML/TF/FOP methods and activity.

Recommendations

The Cook Islands must understand where it is most at risk from ML/TF/FOP threats, identify vulnerabilities, and take concerted action to combat these risks through a national effort to detect, disrupt, deter, and mitigate ML/TF/FOP risks.

Methodology

This report follows a common methodology for undertaking a national risk assessment, which involves collecting and analyzing relevant information from government agencies and the private sector to obtain a clear understanding of all the ML/TF/FOP risks that a country may be exposed to and where it may be vulnerable to those risks. The report draws on previous Cook Islands NRAs, as well as knowledge and experience from within the FSC (Financial Supervisory Commission) and FIU, senior management in the banking and TCSP industries, and other members of the community with deep knowledge and experience of the Cook Islands.

Considerations

The approach taken by other countries in producing NRAs, as well as NRA models developed by the World Bank and International Monetary Fund, have been considered in the preparation of this report.