5.1 moving towards excellence (cook islands)

transcript

Moving Towards EXCELLENCE with FATF’s 40+9…

THE COOK ISLANDS STORY

Financial Supervisory CommissionCook Islands

The Story Teller:

Louise WittwerManager - Offshore ServicesFinancial Supervisory CommissionRarotongaCook Islands

Setting the Scene:“Cook Islands have emerged as a leader in the fight against money

laundering and terrorism financing within the region.”

Dr Gordon HookExecutive Secretary

Asia/Pacific Group on Money LaunderingJuly 2009

Setting the scene a little better … Lou’s back yard

Where are the Cook Islands?

• At the centre of the Polynesian Triangle• Western neighbours – Tokelau, Western + American Samoa, Niue• Eastern neighbour – Tahiti• Lies in the Tropic of Capricorn

RAROTONGA

• Vibrant capital of the Cook Islands• 1 of 15 islands scattered over 2 million square kilometres• Home to 12,000 people• Circular island, 32k in circumference• Mountain peaks backdrop to palm fringed shores of turquoise lagoon

Quiz Time:

1. What is the most popular mode of transport in the Cooks?

A. TrainB. HelicopterC. Scooter

Quiz Time:

2. What do Cook Islanders eat with?

A. A knife and forkB. ChopsticksC. Their hands

Quiz Time:

3. The majority of animals in Rarotonga are:

A. MonkeysB. PigsC. Cats

Quiz Time:

4. The Cook Islands $2 coin is this shape:

A. SquareB. TriangleC. Circle

Quiz Time:

5. The Cook Islands are in the same time zone as:

A. HawaiiB. AntarcticaC. New Zealand

Quiz Answers:

1. C - Scooter2. C - Hands3. B - Pigs4. B - Triangle5. A - Hawaii

Setting the Scene:“Cook Islands have emerged as a leader in the fight against money

laundering and terrorism financing within the region.”

Dr Gordon HookExecutive Secretary

Asia/Pacific Group on Money LaunderingJuly 2009

Asia/Pacific Group on Money Laundering (APG) – 5 key roles:

1. Robust Mutual Evaluation Programme2. Technical Assistance + Training3. International AML Network4. Research + Analysis5. Active Associate Member of FATF

APG:• Largest ‘FATF Style’ Regional Body• 40 Active Member Countries• 9 Members who are FATF members:

1. Australia 6. Korea2. Canada 7. New Zealand3. China 8. Singapore4. Hong Kong 9. United States5. Japan

The Cook Islands …

• Member of APG since 2001• AML Mutual Evaluation in Feb 2009• MER released in July 2009

Very pleasing results …

Key Result:

Cook Islands is the only jurisdiction (in APG) that has NO NON COMPLIANT ratings

against FATF’s40 AML Recommendations

and9 Special Recommendations

(Against Terrorism Financing)

Overall Result:

Rating Number Percent

Compliant 4 8%

Largely Compliant 25 51%

Partially Compliant 19 39%

Non Compliant 0 0%

Not Applicable 1 2%

TOTAL 49 100%

In summary, 60% C or LC and 40% PC.

Detailed Results:

RatingLegal

SystemsPreventive Measures

Institutional + Other

Measures

International Co-operation

9 Special Recomm. TOTAL

C 3 1 4

LC 2 9 4 6 4 25

PC 1 9 5 4 19

NA 1 1

TOTAL 3 22 9 6 9 49

Comparative Results:

Rating COOKISLANDS

Canada Hong Kong

New Zealand

Samoa UnitedStates

Vanuatu

C 4 7 10 8 1 15 3

LC 25 23 20 17 4 28 8

PC 19 8 15 6 30 2 26

NC 11 4 18 14 4 12

N/A 1 0 0 0 0 0 0

TOTAL 49 49 49 49 49 49 49

So, how did we get there?

Essentially with,‘Political + Jurisdictional WILL’

to be removed from FATF’s BLACKLIST

(June 2000 to February 2005)

National effort forimmense changeincluding …

• Legislative Change• Active involvement of Govt and Crown Agencies• Supervisory and Regulatory Change• Other Fundamental Changes

Legislative ChangeSuite of AML legislation …

1. Money Laundering Prevention Act 20002. Banking Act 20033. Crimes Amendment Act 20034. Extradition Act 20035. Financial Supervisory Commission Act 20036. Mutual Assistance in Criminal Matters Act 20037. Proceeds of Crimes Act 20038. Financial Transactions Reporting Act 20049. Narcotics and Misuse of Drugs Act 200410. Terrorism Suppression Act 2004

Active involvement ofGovernment and Agencies …

1. Financial Intelligence Unit (Intel & Compliance)2. Financial Supervisory Commission (Regulation &

Compliance)3. Cook Islands Police (Investigation & Prosecution)4. Customs (Movement of People & Goods)5. Crown Law (Prosecution)

Along with Audit, Immigration, Justice, Foreign Affairs.

Supervisory & Regulatory ChangeA few examples …

1. Relicensing of all banks (domestic & international) by FSC

2. Annual on-site examinations of all financial institutions (including trustee companies)

3. Introduction of FIU’s reporting regime (STR, CTR, EFTR)

4. Review of DNFBP’s (lawyers, accts, pearl dealers, mv dealers, real estate agents)

Other Fundamental ChangesA few more examples …

1. Establishment of the Co-ordinating Committee against Money Laundering & Terrorist Financing (CCAM)

2. Getting the Offshore Industry ‘on board’ with the Regulators

3. Active participation in AML forums (APG, Egmont)4. Sector Capacity Development (T & TA)5. Awareness Programmes for DNFBP’s

By February 2004 the 2nd Cook Islands Evaluation Team observed:

“Overall, the current AMLlegal, institutional, and supervisory

framework provides a sound basis for the prevention, detection, and prosecution of ML offences, but implementation remains

weak and FT is not addressed.”

3rd time round – Preparing for CI 2009 Mutual Evaluation

1. Started planning early, after APG 2007 Plenary2. Outsourced preparation of ‘National Risk

Assessment’ 3. Heads of all key agencies – FIU, FSC, CLO and

Police attended APG training workshop4. FIU dedicated resources to the ME5. Comprehensive completion of ME questionnaire

3rd MER Positive BUT…

Still contained 112 !!! recommendations

POCA, FTRA, Offshore, Insurance& DNFBP sectors…

So, where are we going?

Addressing 112 recommendations with consensus that we must …

• Complete National Implementation Plan (Risk-based-approach to implementation and allocating scarce resources).

• Maintain co-operation between parties

• Aim for nil PC, and a significant move from LC to C, for our 4th ME.

AND we’ve already started…

1. Revocation of two Offshore Bank Licences.2. Implementation of the Insurance Act 2008.3. Money Changers and Remitters Act passed

in 2009.4. Steps underway to abolish the Offshore

Banking Sector.5. Strategic Implementation Plan workshop

held late March.

Meitaki Maata

Lou’s front yard …

5.1 moving towards excellence (cook islands)

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