The Cook Islands is a sovereign nation comprising 15 islands unfold over 2 million square kilometers of the South Pacific. Its resident population of approximately 12,000 marks it as one of the international’s smallest countries, but that has no longer prevented it from organizing itself within the worldwide economic offerings enterprise through its innovative accept as true with laws, and using the one’s laws in present day wealth control making plans. More currently but, the Cook Islands has mounted itself as a world leader inside the fight towards money laundering and different monetary crimes.
The journey begins
At the beginning of this millennium, the Cook Islands was named by the Financial Action Task Force (FATF) as a “non-co-operative USA or territory”, a jurisdiction that it deemed had insufficient structures, tactics, and controls in the area to combat money laundering and other monetary crimes.
The Cook Islands was “blacklisted”. Eighteen years on, and the FATF has confirmed that the Cook Islands has one of the first-class anti-money laundering/countering the financing of terrorism (AML/CFT) regimes within the international.
The Cook Islands’ journey from AML outcast to international leader has taken time due to both the time it takes the Asia Pacific Group on Money Laundering (APGML) – an FATF-style local body – to evaluate and record at the AML regimes of countries within its place (41 nations with a median of five reviews being published annually), however additionally because of the demands that attaining FATF standards places on a small jurisdiction and its constrained assets.
The Cook Islands is one of the smallest jurisdictions inside the APGML (and most virtually inside the global) however is required to have the identical framework of AML/CFT structures, processes, and controls as each APGML member, including america, China, India, Singapore, Hong Kong, Australia, and New Zealand.
The Cook Islands understood the poor impact that being blacklisted with the aid of the FATF could have on its financial system and its ability to do enterprise internationally. Therefore, following its blacklisting in June 2000, it undertook an intensive assessment and analyses of the AML structures, controls and approaches in a location inside its monetary offerings enterprise to pick out what could be needed to meet worldwide standards. This evaluation and those analyses led to a collection of law being handed in 2003 and 2004.
The most incredible enactments were the Financial Supervisory Commission Act 2003 (FSCA 2003), which established the Financial Supervisory Commission (FSC), and the Financial Transactions Reporting Act 2004 (FTRA 2004). The FSC has become and stays responsible for the licensing and supervision of monetary institutions which includes banks, insurance corporations, trustee organizations, and cash transmitters, and the Cook Islands’ average compliance with global AML/CFT requirements.
The FTRA 2004 targeted the prevention, detection, investigation, and prosecution of serious offenses, along with cash laundering and terrorist financing, by using organizing a Financial Intelligence Unit (FIU) and implementing client due diligence necessities on reporting establishments.
In addition to the FSCA 2003 and FTRA 2004, other legal guidelines surpassed to broaden and enhance the Cook Islands’ AML framework blanketed legal guidelines to criminalize cash laundering; hint and capture the proceeds of crime; provide global assistance in crook matters; and cast off shell banks.
On the basis of the legal guidelines passed and systems, controls and strategies carried out, the FATF eliminated the Cook Islands from its blacklist in February 2005.
In 2009, an evaluation of the Cook Islands AML/CFT regime turned into undertaken with the aid of the APGML. The Cook Islands performed a very beneficial document which, even as indicating similarly enhancements have been nevertheless required, stated that the Cook Islands had: proven dedication to improving its AML/CFT structures; spoke back to the several hints, which include for legislative amendments, to improve its AML/CFT structures; and had considerably stronger the supervision of its onshore and offshore sectors.
In 2014, having revised its forty suggestions on technical compliance and adopted a brand new technique to envision the effectiveness of a jurisdiction’s AML/CFT regime, the FATF began a further spherical of mutual opinions primarily based on its new framework. Countries, together with the Cook Islands, had been required to re-study their AML/CFT regimes, enact new laws, introduce new structures and strategies, and allocate even further assets in an try to avoid the ignominy of being blacklisted or in any other case singled out as being a horrific worldwide citizen.
Mutual assessment technique
The Cook Islands mutual evaluation below the FATF’s new framework became slated for 2017, prompting a direct overview of its AML/CFT regime. That evaluation resulted, among other matters, within the Financial Transactions Reporting Act 2017 as well as amendments to legal guidelines at the proceeds of crime, suppression of terrorism and global mutual assistance in criminal topics, and the investigative powers given to the FIU.
The mutual evaluation manner commenced in early 2017 and lasted almost 18 months. It protected a -week on-website assessment in November 2017 of the Cook Islands’ AML/CFT regime, undertaken by representatives of the APGML and six unbiased assessors appointed through the APGML.
The Cook Islands’ mutual evaluation become undertaken pursuant to the FATF’s revised 2012 requirements and 2013 technique, which entails two additives: (1) technical compliance with the FATF’s forty hints, being an analysis of u . S .’s prison and institutional framework; and (2) an evaluation of the effectiveness of the country’s AML/CFT regime when measured towards the FATF’s predicted eleven immediate results.
This lengthy and exhausting process culminated inside the FATF publishing the Cook Islands’ Mutual Evaluation Report (MER) on 22 October 2018.
Mutual assessment record
The Cook Islands MER presents irrefutable evidence that the Cook Islands understands its global duties and is devoted to assemble them.
In regard to the forty tips, the Cook Islands received 38 ratings of “in large part compliant and above”, currently bettered via no other jurisdiction.
In terms of the implementation and effectiveness of its laws and structures when measured in opposition to the FATF’s eleven instant outcomes, the Cook Islands attained five significant rankings, 4 slight scores, and two low ratings. This resulted within the Cook Islands is one in every of handiest jurisdictions within the APGML membership to be located inside the “normal” follow-up manner. This is an unprecedented and notable achievement.
The FATF’s 11 immediately outcomes degree the effectiveness of a jurisdiction’s AML/CFT regime. A range of regions is assessed with of the fundamental necessities being that jurisdiction needs to pick out and recognize its ML/TF chance (on the spot final results 1) and properly alter and supervise its economic offerings enterprise (instantaneous outcome three) in accordance with the one’s risks.