Financial Crime World

Cook Islands’ Financial Regulator Faces Challenges in Establishing Supervisory Arrangements

Wellington, New Zealand

The Financial Services Commission (FSC) in the Cook Islands is facing a daunting task in establishing its regulatory and supervisory arrangements, according to a recent report. Despite being established earlier this year, the FSC has yet to begin its program of supervision over licensed financial institutions.

Challenges Ahead

  • The commission needs to develop a basic supervisory infrastructure and train its staff.
  • Only one member of the supervisory staff has previous regulatory experience.
  • Regulations and guidance notes need to be developed as well as on- and off-site surveillance tools.

Anti-Money Laundering and Combating Terrorism Financing Concerns

  • The Cook Islands has recently developed a comprehensive anti-money laundering (AML) suite of legislation, but has yet to adopt combating the financing of terrorism (CFT) laws.
  • The FSC and Financial Intelligence Unit (FIU) need to review their current resource levels against compliance responsibilities under the Financial Transactions Reporting Act.
  • The country has not ratified several international conventions aimed at combating terrorism financing, including the Convention for the Suppression of the Financing of Terrorism.

Supervision Over Trustee Companies and International Companies

  • There is a lack of adequate supervision over trustee companies and international companies (ICs) registered in the Cook Islands.
  • The FSC does not currently have the capacity to undertake due diligence checks on these entities, despite having legal authority to do so.

Conclusion

While the Cook Islands is making progress towards establishing a well-registered offshore financial center, it still faces significant challenges in developing its regulatory and supervisory arrangements.

Key Quotes

  • “The FSC needs to develop a clear philosophy on the type of institution it wishes to license,” said [Name], Commissioner of the Financial Services Commission.
  • “We are working to develop the capacity to undertake both on- and off-site supervision of financial institutions, but we still face significant challenges in developing our regulatory infrastructure,” said [Name].
  • Cook Islands to Establish New Financial Regulator
  • Cook Islands Faces Challenges in Combating Money Laundering and Terrorism Financing

Contact Us

For more information or to schedule an interview with a representative of the Financial Services Commission, please contact [Name] at [Email] or [Phone].