In 1989, the Cook Islands enacted the International Trusts Amendment Act (“ITAA”), which amended the basic bare bones International Trusts Act (“ITA”), enacted in 1982 when, as a result of a private initiative endorsed by the government, the Cook Islands parliament passed several companion acts establishing the offshore finance center. “Bare bones” does not, by the way, mean “bare trust”; the rule in Saunders v. Vautier, whereby beneficiaries are absolutely entitled to call for distribution of assets, which was repealed in the ITA.
The Cook Islands has a unicameral parliamentary model inherited from the United Kingdom via New Zealand, which governed the Cook Islands until 1965 when the Cook Islands became self-governing and two countries entered into an arrangement of “free association.” While the Cook Islands has full and independent law-making capacity, the country is somewhat less than fully independent of New Zealand. Cook Islands law is an amalgam of adopted New Zealand statute law, New Zealand and English common law, Cook Islands statutes and a small body of Cook Islands common law. The ITA as amended is thus a statutory overlay to an existing body of English and New Zealand statute and common law including Cook Islands precedent as it relates to trusts.