Cook Islands leads the way

The country’s financial authority CEO explores an eventful evolution, from outcast to global leader in offshore investment

The Cook Islands is a sovereign nation comprising 15 islands spread over 2 million square kilometres of the South Pacific. Its resident population of approximately 12,000 marks it as one of the world’s smallest countries, but that has not prevented it from establishing itself in the international financial services industry through its innovative trust laws, and the use of those laws in modern day wealth management planning. More recently however, the Cook Islands has established itself as a world leader in the fight against money laundering and other financial crimes.

The journey begins

At the beginning of this millennium the Cook Islands was named by the Financial Action Task Force (FATF) as a “non-co-operative country or territory”, a jurisdiction that it deemed had insufficient systems, processes and controls in place to combat money laundering and other financial crimes.

The Cook Islands was “blacklisted”. Eighteen years on, and the FATF has confirmed that the Cook Islands has one of the best anti-money laundering/countering the financing of terrorism (AML/CFT) regimes in the world.

The Cook Islands’ journey from AML outcast to global leader has taken time due to both the time it takes the Asia Pacific Group on Money Laundering (APGML) – an FATF-style regional body – to assess and report on the AML regimes of countries within its region (41 countries with an average of five reports being published annually), but also due to the demands that achieving FATF standards places on a small jurisdiction and its limited resources.