Financial Crime World

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Cook Islands Maintains Strong Reputation for Financial Market Integrity

The Cook Islands, a small South Pacific nation, has long been synonymous with financial market integrity and transparency. Despite its remote location, it has established itself as a go-to international financial center (IFC) for high-net-worth individuals seeking privacy and protection.

Focus on Protecting and Preserving Wealth

Alan Taylor, CEO of Cook Islands Finance, attributes the jurisdiction’s success to its focus on protecting and preserving wealth. “The common factor uniting our products and services is the protection and preservation of wealth - an essential but often neglected element of wealth planning,” he said.

Comprehensive Asset Protection Provisions

The Cook Islands’ trust law is derived from English common law, with comprehensive asset protection provisions introduced in 1989. This innovative approach has since been copied by other jurisdictions. The jurisdiction has also introduced foundation and limited liability company legislation to protect assets.

Government Support

Taylor emphasized the importance of government support, citing the timely passing of progressive and innovative legislation as well as investment in the industry’s growth and development. “The Cook Islands’ international reputation has been enhanced through the enactment of robust laws to regulate and supervise financial institutions and combat financial crime,” he said.

Compliance with International Requirements

In recent years, the jurisdiction has focused on compliance with international requirements on money laundering and financial transparency to combat tax evasion and other financial crimes. It has incorporated FATCA and CRS into its laws for automatic sharing of financial information for tax purposes and implemented robust anti-money laundering regulations.

Innovative Products and Services

The Cook Islands has also introduced new innovative products to cater to changing market demands. For example, the International Relationship Property Trusts Act 2021 provides a statutory regime for couples to settle irrevocable trusts and protect their relationship property from foreign courts.

Response to Global Uncertainty

Despite global geopolitical and macro developments creating uncertainty, Taylor believes that the Cook Islands’ focus on security and stability has allowed it to remain vital and relevant. “Our clients need certainty and trust in our service providers to respond in a timely and professional manner,” he said. The jurisdiction’s digital platforms and virtual capacity have also enabled business continuity during the COVID-19 pandemic.

Conclusion

Overall, the Cook Islands continues to maintain its strong reputation for financial market integrity, making it an attractive destination for high-net-worth individuals seeking privacy, protection, and stability for their wealth.

Key Highlights

  • The Cook Islands’ trust law is derived from English common law
  • Comprehensive asset protection provisions were introduced in 1989
  • The jurisdiction has incorporated FATCA and CRS into its laws
  • Robust anti-money laundering regulations are in place
  • Innovative products such as the International Relationship Property Trusts Act 2021 have been introduced