Cook Islands Organizations Face Financial Crime Scrutiny as Government Ensures Compliance with International Standards

Enhancing Transparency and Combating Financial Crimes

The Cook Islands government has taken a proactive approach to combating financial crimes by ensuring that the country’s financial services industry adheres to international standards and regulations. This commitment to transparency is evident in recent years, where the government has implemented laws and regulations to promote compliant business operations.

International Compliance: A Key Priority

To this end, the Cook Islands has:

• Incorporated FATCA and CRS: The country has incorporated the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) into its laws, facilitating the automatic sharing of financial information for tax purposes.
• Enhanced AML/CFT Framework: The Cook Islands’ Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) framework has been enhanced through the enactment of the Financial Transactions Reporting Act 2017 and related legislation.

Tax Transparency: A Cooperative Jurisdiction

The Cook Islands’ commitment to tax transparency is evident in its participation in the Organisation for Economic Co-operation and Development’s (OECD) Inclusive Framework on Base Erosion and Profit Shifting. The country has passed laws to remove tax regimes deemed preferential and harmful by the European Union, solidifying its position as a cooperative jurisdiction for tax purposes.

Preserving Confidentiality: A Balance Between Obligations and Rights

Despite the emphasis on transparency, the Cook Islands has maintained a balance between meeting international obligations and preserving individual confidentiality. While governments must access necessary financial information to combat crime, the country’s approach ensures that legitimate business operations are not compromised.

Investigative Powers: A Key Component

The Cook Islands does not maintain public registers for beneficial ownership of incorporated entities or trusts. However, investigative powers are in place within the Financial Supervisory Commission and Financial Intelligence Unit, where there is reason to believe financial misconduct has occurred. Information obtained will only be shared in accordance with the law, preventing unnecessary fishing expeditions.

Increased Credibility: A Result of Compliance

This approach offers reassurance to governments, institutions, businesses, and individuals globally when dealing with the Cook Islands and its financial services industry. The country’s commitment to compliance provides increased credibility, making it challenging for international trade partners and financial institutions to justify risks associated with money laundering or other financial crimes.

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