Police Express Concern Over Lack of Resources to Combat Money Laundering

The Cook Islands Police Service has raised concerns over the lack of resources available to investigate money laundering (ML) cases, warning that it poses a significant risk to the country’s financial system and reputation.

Investigating Money Laundering Cases

In an effort to combat ML, the Financial Intelligence Unit (FIU) has been tasked with devising a robust audit programme to test compliance with the Financial Transaction Reporting Act 2017 (FTRA 2017). The law aims to bring the country’s AML/CT regime in line with current FATF standards. However, the police have expressed concern over the lack of resources available to investigate ML cases, citing the need for additional funding and personnel to effectively combat the threat.

Risks Posed by Trust and Company Service Providers

The report highlights the risk posed by Trust and Company Service Providers (TCSPs) that do not have control over the assets, business or other activities of entities owned by a trust. This can increase their risk of being associated with ML/TF/FOP and other criminal activity.

The FIU has also expressed concern over the lack of sharing of information between government agencies, warning that it could hinder efforts to combat ML. “There appears to be good cooperation with foreign authorities requesting information, but there is a need for clearer roles and responsibilities in sharing information,” said an FIU spokesperson.

Detection Methods

The report notes that the number of instances of undeclared cash being discovered at the border appears low, citing the lack of real means of detecting cash other than third-party information. The suspicious transaction reporting requirement under FTRA 2017 is expected to generate increased filing, which will provide valuable information for detecting ML methods and activity.

Recommendations

To better combat ML/TF/FOP threats, the report makes several recommendations:

Additional Funding and Personnel: The need for additional funding and personnel to investigate ML cases
Robust Audit Programme: Development of a robust audit programme to test compliance with FTRA 2017
Improved Information Sharing: Improved sharing of information between government agencies
Increased Suspicious Transaction Reporting: Increased suspicious transaction reporting under FTRA 2017

Methodology

The report was compiled using a methodology that involved collating and analyzing relevant information from government agencies and private sector participants. This included reviewing previous National Risk Assessments, conducting interviews with key personnel, and analyzing data obtained by FIU from key government agencies and the private sector.

Primary ML/TF/FOP Threats to CI

The report identifies the primary ML/TF/FOP threats to CI as being associated with cash-based businesses, particularly in the retail and service sectors. It also highlights the risk posed by TCSPs that do not have control over the assets, business or other activities of entities owned by a trust.

By addressing these recommendations, the Cook Islands can better combat ML/TF/FOP threats and protect its financial system and reputation.