Cook Islands’ Financial Professionals Embrace International Standards and Client Confidentiality
The Cook Islands government has made significant strides in ensuring compliance with international requirements on money laundering and financial transparency to combat tax evasion and other financial crimes. The country’s financial services industry has been at the forefront of this initiative, incorporating laws and regulations necessary to meet international standards while maintaining its reputation as a progressive, stable, and safe jurisdiction for business.
Implementing International Standards
To achieve this goal, the Cook Islands has implemented various measures, including:
- Automatic sharing of financial information for tax purposes through FATCA and CRS
- Enhanced Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) laws and framework to meet the Financial Action Task Force’s recommendations
Tax Transparency and Compliance
The Cook Islands has also demonstrated a commitment to tax transparency and compliance by:
- Joining the OECD’s Inclusive Framework on Base Erosion and Profit Shifting (BEPS)
- Removing tax regimes deemed preferential and harmful by the European Union
- Earning a reputation as a cooperative jurisdiction for tax purposes
Balancing International Obligations with Client Confidentiality
Despite the global push for financial transparency, the Cook Islands has struck a balance between meeting its international obligations and maintaining individual confidentiality. The country:
- Does not have public registers for beneficial ownership of incorporated entities or trusts
- Has investigative powers in place to address financial misconduct
- The Financial Supervisory Commission and the Financial Intelligence Unit have the authority to obtain information where there is reason to believe financial wrongdoing has taken place
- Information will only be shared in accordance with the law, and fishing expeditions will not be tolerated
Enhanced Credibility for International Trade Partners
The Cook Islands’ approach should provide comfort for governments, institutions, businesses, and individuals worldwide when dealing with the jurisdiction’s financial services industry. This approach enhances the country’s credibility when transacting with international trade partners and financial institutions, making it less likely to encounter issues related to money laundering or other financial crimes.
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