Cook Islands’ Financial Sector Adheres to International Standards Amid Rising Risks of Financial Crime
The global financial landscape is constantly evolving, and the Cook Islands has reaffirmed its commitment to upholding international standards and regulations to prevent money laundering, tax evasion, and other forms of financial crime.
Strengthening Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Requirements
In recent years, the island nation’s government has taken significant steps to ensure compliance with AML/CFT requirements. The Cook Islands has incorporated the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) into its laws, mandating the automatic exchange of financial information for tax purposes.
Enacting Strengthened AML/CFT Framework
The country has also enacted the Financial Transactions Reporting Act 2017 and related legislation to meet the recommendations of the Financial Action Task Force (FATF). This strengthened framework aims to prevent financial crimes and ensure transparency in financial transactions.
Balancing Transparency with Confidentiality
Despite the growing need for transparency in financial matters, the Cook Islands has struck a balance between meeting international obligations and protecting individual confidentiality. The country does not maintain public registers of beneficial ownership for incorporated entities or trusts, instead relying on investigative powers held by the Commissioner of the Financial Supervisory Commission and the Financial Intelligence Unit.
Confidentiality Protections
These agencies have the authority to obtain information where there is reason to believe financial misconduct has occurred, but their findings will only be shared in accordance with legal provisions. The Cook Islands has explicitly rejected “fishing expeditions,” ensuring that personal financial data remains confidential unless there is a legitimate need for it.
Increased Credibility and Trust
The country’s approach to meeting international standards while preserving confidentiality has earned the trust of governments, institutions, and businesses worldwide. This increased credibility allows the Cook Islands to maintain its reputation as a progressive, stable, and safe jurisdiction for financial transactions.
Promoting Transparency and Cooperation
To promote transparency and cooperation in the fight against financial crime, the Cook Islands has joined the OECD’s Inclusive Framework on Base Erosion and Profit Shifting (BEPS) and passed laws to eliminate tax regimes deemed harmful by the European Union. By doing so, the country has demonstrated its commitment to combating tax evasion and other forms of financial misconduct.
Conclusion
For those considering conducting business with or in the Cook Islands, this commitment to compliance and confidentiality provides reassurance that their interests will be protected while also contributing to a safer and more transparent global financial landscape. For more information on the Cook Islands’ financial services industry and its approach to combating financial crime, contact Cook Islands Finance today.