Cook Islands Progresses Towards Full Disclosure Next Year

by Mary Swire, Tax-News.com, Hong Kong

15 October 2003

The chairman of the Cook Islands Financial Supervisory Commission, Trevor Clarke revealed to AFP yesterday that the operators of offshore companies, banks, trust accounts and insurance firms will be required to make full disclosure after June 4 next year as a result of new legislation designed to secure the jurisdiction's removal from the FATF blacklist.

According to the FATF (Financial Action Task Force, an office of the OECD) the Cook Islands failed to record relevant information on some 1,200 international firms registered in the jurisdiction and also accused the banking sector of being inadequately supervised and not requiring firms to identify customers or maintain their records. Consequently, the jurisdiction was placed on the organisation's blacklist of uncooperative nations.

The FATF's brief to clean up the offshore world caused a glut of legislative action in the Cook Islands this year, and nine new bills were presented before the jurisdiction's parliament in June.

The bills, containing proposals put forward by the Anti-Money Laundering/Counter Financing Terrorism Committee, were compiled following a technical assistance visit from an International Monetary Fund (IMF) team earlier this year, and include a Financial Transactions Reporting Act, which requires the reporting of local and international money trasfers to a central intelligence unit.

Also, new rules will require disclosure of the capital adequacy of offshore firms and on-site inspections.

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