Turks and Caicos Islands

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Overall Phase 2 Rating is Largely Compliant

Table of Determinations and Ratings of the Combined Review

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place.   There is no requirement under the AML/CFT laws to verify the identity of a limited partner of a partnership that: (i) is not a regulated business; (ii) has not filed for a business licence; or (iii) has not engaged a licensed service provider. Therefore, the beneficial ownership information available may not necessarily identify all beneficial owners of a limited partnership in line with the standard.   The Turks and Caicos Islands should ensure that information on all beneficial owners of a partnership is available in line with the standard in all cases. 
Phase 2 Rating Factors Recommendations
Largely Compliant.  The Financial Services Commission has recently strengthened its supervision programme of CSPs, lawyers and accountants, which is still subject to improvements. The Financial Services Commission is yet to apply sanctions in case of breaches with AML obligations.  The Turks and Caicos Islands is recommended to monitor the application of its supervision programme of CSPs, lawyers and accountants, and should apply effective sanctions in cases of serious breaches with AML obligations. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  Although accounting requirements cover all relevant legal entities and arrangements in the Turks and Caicos Islands, including those entities that are subject to FSC licensing or regulation (such as registered agents, which are subject to a FSC-sponsored programme to raise awareness of compliance requirements), the existing system of monitoring to ensure the accuracy and availability of accounting records is not yet fully in place and, as such, does not currently cover all relevant legal entities and arrangements. In addition, this lack of oversight also applies to accounting records of companies that have ceased to exist.  The Turks and Caicos Islands is recommended to implement an effective system of oversight and enforcement to support the legal requirements which ensure the availability of accounting information for legal entities and arrangements in all cases. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  Although the Financial Services Commission has monitored its banks during the peer review period, it has only recently formalised a new risk-based supervision approach to banks. More time is required to confirm the effective application of this supervisory approach. In addition, in situations where deficiencies in complying with AML obligations are detected by the Financial Services Commission, there is no imposition of sanctions. Therefore, more time is needed to ensure that this system is effective in addressing deficiencies in complying with AML/CFT obligations.   The Turks and Caicos Islands is recommended to monitor the application of its risk-based supervision to banks, to ensure that they comply with their record-keeping requirements (including beneficial ownership on bank accounts) in all cases and should consider applying sanctions in case of unaddressed breaches with AML obligations. 
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Compliant.     

Earlier self-assessment based annual reports entitled Tax Co-operation 2010: Towards a Level Playing Field are also available.