WELLINGTON (Center for Public Integrity / Pacific Media Watch): The story of Portcullis TrustNet and its birthplace — the Cook Islands — is in many ways the story of the offshore banking system itself.
It is a largely invisible world, a curious blend of the parochial and the global that’s made up of the minor personalities and politics inside each offshore jurisdiction — many with populations no larger than a small town.
But by establishing special zones, these tiny provinces have changed the face of international finance and business and impacted law enforcement, tax policies and political and economic transparency across the planet.
The Tax Justice Network, an international advocacy group opposed to tax havens, estimates that about one third of all world wealth is held offshore, and about half of all world trade flows through there.
TrustNet, now headquartered in Singapore and with branch offices in 16 other locations, describes itself as a “one-stop shop,” employing lawyers and accountants who help “high net worth” clients manage their money and business activities.
In this they are not alone: there are dozens of other so-called offshore service providers.
Cooks defends trust regulations
Radio New Zealand International reported this week that authorities in the Cook Islands said the country’s regulatory framework for offshore trusts was better than in most places in the world.
Investigative journalist Nicky Hager is calling on the New Zealand government to stop accepting the use of the Cook Islands as a tax haven, following an investigation involving millions of financial documents.
RNZI's Megan Whelan reports:
The Cook Islands was last involved in a tax scandal during the 1990s, when it was at the centre of the so-called wine box affair.
Nicky Hager is part of an international team investigating millions of leaked records of corporate dealings in international tax havens - both legal and illegal.
He says he was investigating a company started in the Cook Islands on what he calls the wild west Winebox days.
I think that New Zealand should make a high priority of closing down the Cook Islands tax haven. I think that the world would be a better place without tax havens and New Zealand has set up the Cook Islands tax haven. Our government, in effect tolerates it and allows it to keep going. And the sooner that one is closed down, the sooner we set a good example to the rest of the world.
Nicky Hager says tax havens are more about secrecy, and points to companies avoiding millions of dollars of tax. .
But the head of the Cook Islands Financial Development Authority, Jenner Davis, says in 2003, the Cook Islands passed a host of legislation regulating the offshore finance sector.
Transactions today aren’t really about secrecy. It’s about privacy, often, because the extremely wealthy in the world, that’s often what they are seeking with their wealth management structures, so they’re not hounded by every financial advisor and accountant. There’s nothing secret from the authorities here in the Cook Islands. They can go in and evaluate the files, and evaluate the processes by which the trust companies are monitoring their obligations.
New Zealand’s Inland Revenue will investigate links in off-shore tax havens.
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