COOK ISLANDS: Banking Compliance Regulations Tighten Up

Strengthening Financial Integrity

The Cook Islands has recently enacted a series of legislation aimed at combating financial misconduct and money laundering. The Financial Intelligence Unit Act 2015 was passed by Parliament in June last year, granting the unit enhanced powers to enforce laws related to financial transactions.

Key Legislation Enforced by CIFIU

• Financial Transactions Reporting Act 2017 (FTRA): Requires reporting institutions to implement robust systems and procedures to prevent and detect money laundering.
  • These institutions include:
    • Banks
    • Lawyers
    • Real estate agents
    • Accountants
    • High-value item retailers

CIFIU Guidance and Resources

• Guidance on various matters, including:
  • Risk assessments
  • Customer due diligence
  • Record keeping
  • Cash and electronic funds transactions over NZ$10,000
  • Suspicious activity reporting
• Practice guidelines for specific industries, such as:
  • Accountants
  • Lawyers
  • Real estate agents
  • Trustee companies
  • High-value item retailers

Other Key Acts Enforced by CIFIU

• Proceeds of Crime Act 2003
• Countering Terrorism and the Proliferation of Weapons of Mass Destruction Act 2004
• Currency Declaration Act 2015-16

Maritime Financial Transactions

The CIFIU also enforces regulations related to maritime financial transactions.

Compliance Requirements

Institutions required to comply with these regulations must have in place:

• Effective systems, policies, and procedures to prevent and detect the laundering of illicit funds.
• Failure to comply may result in severe penalties, including fines and imprisonment.

CIFIU’s Goals

The CIFIU’s efforts aim to ensure that the Cook Islands’ financial system is:

• Transparent
• Stable
• Free from criminal activity.

The unit works closely with reporting institutions, regulatory bodies, and law enforcement agencies to achieve this goal.