Search

[Media Release - FSDA] Cook Islands Financial Services Industry – Meeting International Standards



Negative comments on the Cook Islands as an international financial jurisdiction have been made in the media recently in relation to confidential information leaked from a number of financial service providers, including one in Rarotonga. That information is being called the “Pandora Papers”. What was not commented on in the media however is the ongoing effort and the commitment of the Cook Islands government towards fighting all financial crime including tax evasion, money laundering and the financing of terrorism.


In 2018 the Cook Islands received an outstanding report from the Asia Pacific Group on Money Laundering (a regional body of the Financial Action Task Force) rating the Cook Islands AML/CFT regime as one of the best in the world, superior to a number of the larger and more recognized international financial centres. The Financial Supervisory Commission and the Financial Intelligence Unit carry out regular audits of all licensed trustee companies for compliance with that regime.


The Cook Islands is on the European Union’s list of cooperative tax jurisdictions, having passed legislation to address the concerns raised by the EU regarding preferential and harmful tax regimes. The Cook Islands is also a member of Global Forum on Transparency and Exchange of Information for Tax Purposes and has entered into 21 Tax Information Exchange Agreements with other countries.

The Cook Islands is a member of the Base Erosion and Profit Shifting (BEPS) Inclusive Framework and has committed to working towards compliance with the 15 Action Points set out by the OECD. The Inclusive Framework on BEPS is designed to tackle tax avoidance, improve the coherence of international tax rules and ensure a more transparent global tax environment.

In accordance with its commitment to Automatic Exchange of Information under the OECD Common Reporting Standard (CRS), the Cook Islands has passed legislation to provide for the implementation of arrangements to exchange tax information; and passed regulations which include offences and impose a penalty regime in the event of a breach by any financial institution. The Cook Islands has also passed legislation to facilitate the disclosure of financial information by its financial institutions pursuant to the United States Foreign Account Tax Compliance Act.


The journalists that released the “Pandora Papers” are pursuing a narrative to discredit the offshore services industry. There are many legitimate reasons for individuals to incorporate international companies and to set up international trust structures and all Cook Islands licensed trustee companies are obligated to ensure international entities comply with domestic and international requirements. The Cook Islands has continually demonstrated its overriding commitment to meet all of its international obligations clearly proving itself to be compliant and responsible.

[END]