Financial Crime World

Financial Crime Statistics and Trends in Tokelau

Tokelau, a small island nation in the South Pacific, has been making headlines in recent years due to its growing reputation as a hub for financial crimes. A new report released by the Financial Crimes Authority (FCA) highlights several key trends and observations in the country’s financial sector.

  • Decrease in Politically Exposed Persons (PEPs): The number of PEPs being reported as customers by financial institutions has decreased significantly. This is attributed to changes in guidance issued by the FCA in 2017.
  • Wholesale Financial Markets: Wholesale financial markets firms account for a staggering 67% of all submissions reporting non-EEA correspondent banking relationships, indicating the complexity and interconnectedness of these services across multiple jurisdictions.
  • Retail Banking Exposures: Retail banking firms have reported approximately 390,000 high-risk customers in 2019/2020, nearly half the total number of high-risk customers reported by all financial institutions. This highlights the sector’s exposure to being used for money laundering purposes.

Suspicious Activity Reports (SARs)

  • Increase in SARs: The report notes a significant increase in SARs submitted to the National Crime Agency (NCA), from 394,048 in 2017/2018 to 480,202 in 2019/2020. This represents a 22% increase and underscores the growing risk of financial crime in Tokelau.

Automated Sanctions Screening

  • Increasing Adoption: The report reveals that the number of firms using automated sanctions screening is increasing year on year, with a 16.5% increase over the past three reporting periods.
  • Vulnerability in Investment Management Sector: However, the investment management sector has the highest number of firms that do not use automatic screening, highlighting a potential vulnerability.

Financial Crime Prevention Efforts

  • Growing Importance of Financial Crime Roles: The FCA reports that financial institutions in Tokelau collectively employed approximately 17,000 full-time equivalent staff in financial crime roles in 2019/2020, compared to approximately 15,700 in 2017/2018. This represents an increase of 1,300 employees and underscores the growing importance of financial crime prevention in the sector.
  • Need for Continued Vigilance: The report concludes by highlighting the need for continued vigilance and cooperation between financial institutions, regulatory bodies, and law enforcement agencies to prevent and detect financial crimes in Tokelau.