Enhanced Monitoring Report on the Implementation of the Standard on Transparency and Exchange of Information on Request 2025

Turks and Caicos Islands

The Turks and Caicos Islands joined the Global Forum in 2009. The Turks and Caicos Islands underwent its Second Round of EOIR Peer Review in 2019 (Turks and Caicos Islands’ 2019 Report),1 which assessed its legal and regulatory framework in force as at 19 December 2018 and its practical implementation, including in respect of EOI requests received and sent during the review period from 1 January 2015 to 31 December 2017. The Turks and Caicos Islands received an overall rating of Largely Compliant and the individual Elements were rated as follows:

 

	A.1	A.2	A.3	B.1	B.2	C.1	C.2	C.3	C.4	C.5	Overall
Determinations	i.p.	i.p.	i.p.	i.p.	i.p.	i.p.	i.p.	i.p.	i.p.	n.a.	LC
Ratings	LC	LC	LC	C	C	C	C	C	C	C

Status of implementation of recommendations issued in the peer review report

The Turks and Caicos Islands received four in-box recommendations in relation to Elements A.1, A.2 and A.3 in the 2019 Report.

This monitoring report assesses the actions taken by the Turks and Caicos Islands to address the recommendations issued in its EOIR Peer Review Report and the peer input received for the monitoring period 2023-2024.

The report concludes that all the four recommendations are “in the process of being addressed”, and it advises on actions required.

Element A.1: Availability of ownership information

1. Availability of beneficial ownership information on partnerships

 

Recommendation (A.1, framework)	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.
Underlying factor	There is no requirement under the AML/CFT [Anti-Money Laundering / Countering the Financing of Terrorism] 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. (see paragraphs 159-166 of the Turks and Caicos Islands’ 2019 Report for more information)
Summary of actions reported	The Turks and Caicos Islands has reiterated that beneficial ownership information on limited partnerships has been available to varying degrees with different authorities as indicated in the 2019 Report. In addition, the Limited Partnerships (Amendment) Ordinance 2024 came into operation on 1 December 2024. All limited partnerships are now required to maintain beneficial ownership registers and also file this information with the Financial Services Commission (the Commission), which will maintain a register of beneficial owners of limited partnerships. The amendments provide for a definition of beneficial ownership as it applies to limited partnerships and the obligations for maintaining and retaining such information. Further Regulations to support the process are being finalised. The Turks and Caicos Islands has submitted the relevant amending Ordinance.
Conclusion	The Turks and Caicos Islands has made progress to address the recommendation. It should report further progress in the next self-assessment. The Limited Partnerships (Amendment) Ordinance 2024 defines beneficial ownership in the context of limited partnerships and requires maintenance of this information by the limited partnership. The definition is generally in line with the standard but the guidance to clarify the aspect of “significant influence or control”, as anticipated under the Ordinance, is yet to be issued. The amendments also contain provisions for obtaining, maintaining and retaining beneficial ownership information and sanctions for non-compliance. Some aspects of the law pose concerns about the accuracy of beneficial ownership information and ensuring that the information is up to date. Limited partnerships are not expected to carry out verifications of beneficial ownership information and can rely on self-declarations made by persons registerable as beneficial owners. The legal framework does not indicate the documentation requirements for identifying and verifying beneficial owners. Limited partnerships have the possibility to declare that no beneficial owner exists. It is not clear who will be identified in the beneficial ownership register maintained by the Commission in such cases. It is unclear if the requirements cover existing limited partnerships as they appear to apply to new registrations only. While limited partnerships face sanctions for not updating beneficial ownership information or not reporting changes to it, there are no sanctions applicable on beneficial owners for not informing the limited partnerships of such changes. Unless the limited partnerships are required to periodically check for changes, there could be situations where they are not aware of changes to their beneficial ownership information. Finally, under the new provisions of the amended Ordinance there are concerns around the availability of beneficial ownership information for limited partnerships whose registrations are cancelled and they are subsequently registered again, especially for the intervening period between cancellation and re-registration.
Status determined	In the process of being addressed
Actions required	In its next self-assessment, the Turks and Caicos Islands should – Submit the relevant guidance to clarify the concept of “significant influence or control”, if issued. Report on further steps taken to ensure the accuracy and adequacy of the particulars submitted by persons registerable as beneficial owners to the limited partnerships under the legal framework if limited partnerships can rely, without further enquiry, on such submissions and no specific documentation requirements exist for identifying and verifying beneficial owners. Report on steps taken to ensure up-to-date beneficial ownership information is available as all sanctions are imposable on the limited partnerships for not reporting changes, even though they themselves might not be fully aware of such changes as they are not required to periodically check for changes. Report on steps taken to ensure that existing limited partnerships submit their beneficial ownership information to the Commission’s register of beneficial ownership for limited partnerships. Clarify what information would be available under the legal framework where a limited partnership submits a notice to the Commission that no person is registrable as a beneficial owner of the limited partnership. Report on steps taken to ensure that the legal framework will address situations where a limited partnership’s registration has been cancelled but is subsequently re-registered, considering that such subsequent registration is treated as a fresh registration and there are no obligations to correct any past deficiencies, including on maintaining beneficial ownership information.

2. Monitoring the application of supervisory programme in respect of AML-obliged service providers

 

Recommendation (A.1, practice)	The Turks and Caicos Islands is recommended to monitor the application of its supervision programme of Company Service Providers (CSPs), lawyers and accountants and should apply sanctions in cases of serious breaches with AML obligations.
Underlying factor	The Financial Services Commission has recently strengthened its supervision programme of CSPs [Company Service Providers], 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. (see paragraphs 131 et seq. of Turks and Caicos Islands’ 2019 Report for more information)
Summary of actions reported	The Commission monitors entities required to comply with AML obligations. In the Turks and Caicos Islands, Company Service Providers are licensed and are subject to AML requirements. Lawyers and accountants are considered to be designated non-financial businesses and professions and are also subject to the AML requirements. The Commission, in conducting on-site examination of several licensees issues reports on identified deficiencies and concerns. The reports include instructions and recommendations with specific timelines for remediation. The Commission continues to monitor the various licensees’ remediation efforts. In the event that licensees do not comply, the Commission takes enforcement action. The Commission continues to monitor its supervisory programmes and since 2020, the Commission has taken steps towards disciplinary action and disciplinary/enforcement action against several Company Service Providers: 1 Notice of Intention to take Disciplinary Action, 1 Revocation of Licence, 1 Public Statement, 2 Penalty Notices, 1 Directive, 1 Instruction to remove Shareholder. Sanctions for AML contraventions can range in severity, and penalties can be up to USD 50 000. In 2022, there were 11 instances of directives to comply and notices for revocation of licences that were issued to different non-financial business and professions, of which at least two were law firms and two were accountancy firms. In 2023, two such notices were issued. In 2024, one law firm’s licence was revoked.
Conclusion	The Turks and Caicos Islands has made progress to address the recommendation. It should report further progress in the next self-assessment. While the submission suggests some enforcement and oversight efforts by the Commission, clearer details are unavailable. Clear statistics on oversight activities on company service providers, lawyers and accountants, compliance noted in respect of maintaining beneficial ownership information on their clients, types of AML-related deficiencies identified and follow-up actions undertaken are not provided. Supervisory efforts to ensure the adequacy, accuracy and up-to-date nature of beneficial ownership information have not been indicated..
Status determined	In the process of being addressed
Actions required	In its next self-assessment, the Turks and Caicos Islands should: Submit year-wise statistics on the supervisory activities carried out by the Financial Services Commission over Company Service Providers with some indication of extent of compliance noted in client files (e.g. of international/exempt companies, limited partnerships, trusts) Indicate clearly the types of violations of AML requirements observed by the supervisory authorities and the remedial actions imposed or follow-up undertaken Clarify whether financial sanctions have been imposed on any supervised persons in respect of AML violations after issuance of penalty notices and collected, and whether this led to subsequent compliance. Continue to report supervisory activities in respect of lawyers and accountants (besides Company Service Providers).

Element A.2: Availability of accounting information

3. Implementing effective oversight and enforcement to ensure availability and accuracy of accounting information

 

Recommendation (A.2, practice)	The Turks and Caicos Islands is recommended to implement an effective system of oversight and enforcement to support the legal requirements which ensure the accuracy and availability of accounting information for legal entities and arrangements in all cases.
Underlying factor	Although accounting requirements cover all relevant legal entities and arrangements in the Turks and Caicos Islands, including those entities that are subject to FSC [Financial Services Commission’s] 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. (see paragraphs 210 et seq. of Turks and Caicos Islands’ 2019 Report for more information)
Summary of actions reported	All regulated/supervised entities in the Turks and Caicos Islands are required to maintain adequate financial information to provide a clear indication of their business operations. The information is filed by the entity or its registered agent and maintained by the Commission. The entity is also required to maintain this information for a period of at least five years. The Commission, via its onsite and offsite examination regimes, monitors compliance with these financial information maintenance and reporting regimes, and in some cases publishes consolidated reports of financial information filed by regulated/supervised entities.
Conclusion	The Turks and Caicos Islands has made progress to address the recommendation. It should report further progress in the next self-assessment. The 2019 Report had noted the risk-based supervisory efforts of the Turks and Caicos Islands. It highlighted the need for enforcement and supervision for ensuring accuracy and adequacy of the accounting records maintained by the legal entities and arrangements. It also highlighted lack of supervision over availability of accounting information for entities that cease to exist. The Turks and Caicos Islands has not indicated the actions taken to address these aspects. In its self-assessment, while the Turks and Caicos Islands has reported that supervision is being undertaken by the Commission to monitor compliance with legal requirements to maintain accounting information by legal entities and arrangements, important details of implementation are unavailable. For instance, while it is indicated that entities are required to file financial information to the Commission, the scope of such filings and actual compliance rates are not indicated. Moreover, supervisory details are not available – year-wise statistical information on number of supervisory actions (onsite and offsite) undertaken on the licensed service providers, customer files inspected (i.e. files of the legal entities and arrangements serviced by the licensed service providers), supervisory checks specific to accounting records of legal entities and arrangements, deficiencies identified and actions taken. It is not known whether sanctions for non-compliance have been applied and where applied, successfully enforced.
Status determined	In the process of being addressed
Actions required	In its next self-assessment, the Turks and Caicos Islands should – Provide sufficient information on supervisory efforts made to ensure the accuracy and adequacy of accounting information i.e. supervisory activities undertaken to ensure that legal entities and arrangements are maintaining accounting information in line with the standard. Provide statistical information on filing of financial information by legal entities and arrangements with the Financial Services Commission. Provide relevant and available statistical information on its enforcement and supervisory efforts including effective application of sanctions, where appropriate. Reflect supervisory efforts in relation to all types of legal entities and arrangements as well as efforts to ensure that accounting information is available for a period of five years after an entity or arrangement ceases to exist.

Element A.3: Availability of banking information

4. Monitoring the application of the risk-based supervisory framework over banks to ensure availability of banking information

 

Recommendation (A.3, practice)	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 apply sanctions in case of unaddressed breach with AML/CFT [Anti-Money Laundering / Countering the Financing of Terrorism] obligations.
Underlying Factor	Although the FSC [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. (see paragraphs 232 et seq. of Turks and Caicos Islands’ 2019 Report for more information)
Summary of actions reported	The Commission continues an active and effective onsite and offsite monitoring programme for banks. For each of the six banks in the Turks and Caicos Islands, the Commission monitored submission of monthly and quarterly supervisory returns by all banks during 2023-2024. Each of the six banks has been inspected onsite on AML/CFT framework once since 2018. Two onsite inspections on two banks were undertaken in 2023, one follow-up onsite inspection was conducted in 2022 and one follow-up onsite took place in 2021. Prior to 2021, two inspections were undertaken in 2018. While the findings of these reviews have generally been satisfactory, there have been three cases where some non-compliance with relevant requirements was noted and the Commission directed the banks concerned to remedy the identified issues. The Commission monitored the remedial measures undertaken. The Commission continues to develop, implement and transition to its risk-based supervisory framework in accordance with its work plan.
Conclusion	The Turks and Caicos Islands has made progress to address the recommendation. It should report further progress in the next self-assessment. While there is indication of on-going supervisory programme over banks by the Commission and a work plan to implement and transition to the risk-based supervisory framework, details on the work plan and the framework are not available. It is unclear what measures are being undertaken under the risk-based supervisory approach and whether and to what extent AML risks are factored into the supervisory programme. Further, despite identification of breaches in compliance with AML obligations, as was the case at the time of the 2019 Report, sanctions have not been imposed. It is not clear what the severity of identified breaches was and whether they were rectified satisfactorily in a timely manner, such that imposition of sanctions was not necessary, or sanctions were not applied regardless of the breach and follow-up outcomes.
Status determined	In the process of being addressed
Actions required	In its next self-assessment, the Turks and Caicos Islands should: Clarify the work plan in relation to the implementation of the risk-based supervisory framework, how far it has been implemented and how the risk-based supervisory framework ensures the factoring of AML risks. Provide further details on aspects of AML compliance examined during supervisory checks, including updated statistical information on the supervisory efforts of the Financial Services Commission over banks. Clarify the outcomes of the supervisory actions and indicate application of any enforcement actions (including sanctions), as applicable.

EOIR experience

Over the monitoring period, the Turks and Caicos Islands received five requests from several partners and did not send any requests. The Turks and Caicos Islands reported providing full and final responses in 100% of the received requests.

One member that had sent requests to the Turks and Caicos Islands during the monitoring period provided peer input and expressed general satisfaction with its EOIR relationship with the Turks and Caicos Islands.

New developments having a bearing on the EOIR standard

No recent developments that could have a bearing on the EOIR standard (other than those reported to address recommendations) have been reported by the Turks and Caicos Islands or have otherwise come to light.

Next steps

The Turks and Caicos Islands should continue taking actions towards implementing the standard effectively.

The following next steps are expected from the Turks and Caicos Islands:

• Submit its next self-assessment in 2028 under the second round of enhanced monitoring.

Views/response of the monitored jurisdiction

The Turks and Caicos Islands remains fully committed to the international standard for transparency and exchange of tax information. In so doing, Turks and Caicos Islands along with stakeholder partners including the private sector are fully engaged in the work of the Global Forum on Tax Transparency and Cooperation.

In addressing the EOIR recommendations, Turks and Caicos Islands acknowledged the support received from the Turks and Caicos Islands Parliament in the passing of the required legislations governing the EOIR functions. Additionally, the work of the Ministry of Finance and the Financial Transactions Information Exchange unit for their timely execution and deployment of the EOIR standard.

The approval of the Turks and Caicos Islands Enhanced Monitoring Report is another significant milestone demonstrating the commitment to the standard on tax transparency and exchange of information.

Turks and Caicos Islands welcome the guidance and assistance of the Global Forum Secretariat. We must also thank our Global Partners and the Turks and Caicos Islands reporting community for their invaluable support, contributions and cooperation in the EOIR Enhanced Monitoring Review process.

Note

← 1.  OECD (2019), Global Forum on Transparency and Exchange of Information for Tax Purposes: Turks and Caicos Islands 2019 (Second Round): Peer Review Report on the Exchange of Information on Request, Global Forum on Transparency and Exchange of Information for Tax Purposes, OECD Publishing, Paris, https://doi.org/10.1787/5a837e0a-en.