In a large bowl mix the butter and 1 cup of powdered sugar.
Add the flour, corn starch and vanilla extract then mix with your hands into well combined.
Knead together to form a soft dough. Cover with plastic wrap and let stand for 10 to 15 minutes.
Turn the dough out onto a floured counter and knead for about 2 minutes. Roll out to about ¼ inch-thick and cut out the cookies with a round cookie cutter.
Place them on a floured cookie sheet and bake for about 10 – 12 minutes. Remove from the oven and let cool on a rack for 10 minutes. In a small plate, place the flaked coconut and set aside.
Spread arequipe or dulce de leche on each cookie then put together two cookies, making a sandwich with the arequipe in the middle of the two cookies. When you put the cookies together you’ll want some arequipe to come out of the sides. Take the plate with coconut and cover the edges of each alfajor cookie with it, rolling the cookie edge in the flaked coconut if using.