The Cook Islands Financial Sector: A Model of Compliance and Confidentiality

A Progressive and Stable Jurisdiction for Business

In recent years, the Cook Islands government and financial services industry have been at the forefront of implementing international standards to combat money laundering, tax evasion, and other financial crimes. The small island nation has passed laws and regulations necessary to meet these standards, while maintaining its reputation as a progressive, stable, and safe jurisdiction for business.

One key development is the incorporation of FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard) into Cook Islands law. This enables the automatic sharing of financial information for tax purposes, ensuring transparency and cooperation with international partners.

Enhanced AML/CFT Laws and Framework

The country has also enhanced its anti-money laundering and combating the financing of terrorism (AML/CFT) laws and framework to meet recommendations from the Financial Action Task Force (FATF). This demonstrates a commitment to maintaining a robust regulatory environment that protects against financial crimes.

Tax Transparency and Compliance

The Cook Islands has demonstrated a commitment to tax transparency and compliance by joining the OECD’s Inclusive Framework on Base Erosion and Profit Shifting (BEPS) and removing harmful tax regimes deemed preferential by the European Union. This move has earned the country a reputation as a cooperative jurisdiction for tax purposes.

Confidentiality Retained

However, in an era of increased global transparency, it is reassuring to know that the Cook Islands has struck a balance between meeting its international obligations and retaining individual confidentiality. The country does not have public registers for beneficial ownership of incorporated entities or trusts, but investigative powers are available where there is reason to believe financial misconduct has taken place.

Access to Information for Investigations

The Commissioner of the Financial Supervisory Commission and the Financial Intelligence Unit can access information necessary for investigations, but only in accordance with the law. This approach gives international partners confidence when dealing with Cook Islands businesses and financial institutions.

Conclusion

For more information on compliance in the Cook Islands financial services industry, contact our team at Cook Islands Finance.