The report referred to chief suspect of the September 11 terrorist attacks on the US, Osama bin Laden, and revealed that the New Zealand Reserve Bank had distributed instructions regarding the new UN sanctions to all banks throughout the country to refuse transactions linked to Afhganistan and bin Laden. The report then went on to say that special attention should be paid to the Cook Islands as the country was included on an OECD list of possible countries with weak anti-money laundering laws that attract terrorists.

Ms Uhrle told local online news service, CI News, that the report lacked professional integrity and ignored the recent progress the Cook Islands has made on enforcing its offshore banking regulations. Although the report mentioned Nauru, it did not mention Niue and the Marshall Islands which are the other Pacific countries on the OECD list.

She said: 'The Cook Islands swiftly responded by enacting the Money Laundering Prevention Act in August 18 last year. The purpose of the legislation is to construct barriers to the potential use of the Cook Islands as a method of introducing illicit funds to the financial system. Critics of our offshore regime should note that the confidentiality provisions of that regime are overridden with respect to money laundering. The obligations created by this Act apply equally to our domestic and offshore financial institutions.'

Ms Uhrle added that the Money Laundering Prevention Act criminalises money laundering and appoints a Money Laundering Authority, 'the Act places obligations on financial institutions to report business transactions which they suspect involve the proceeds of crime. There are also records retention requirements,' she said.