World Update – Panama Papers

When millions of documents were leaked from an offshore Panama firm in “The Panama Papers”, asset protection came under scrutiny by readers and officials worldwide. While there are some offshore firms that do not have adequate policies and procedures in place to ensure compliance with regulatory requirements – such as allowing precarious clients to set up asset protection vehicles or not requesting sufficient “Know-Your-Customer” documents – asset protection in and of itself is not illegal, nor is it intended to hide, launder, or misuse funds in any way.
The Cook Islands have taken major steps over the last few years to separate the jurisdiction from any branding of this kind. The jurisdiction has Tax Information Exchange Acts (“TIEA”s) in place with several countries to halt tax evasion, as well as the implementation of FATCA procedures to ensure compliance with the United States IRS. Additionally, our asset protection firms adhere to strict Know-Your-Customer requirements and rigorous laws against money laundering. Our regulator audits all Cook Island asset protection firms on a consistent basis to ensure these compliance obligations are met.
News of the Panama Papers certainly did not shed the best light on the industry – but it did make one thing critically clear: if you are looking to set up an asset protection vehicle, the jurisdiction you choose is of the utmost importance to the quality and integrity of your structure. The Cook Islands continues to win all-around in both of these respects.