Now Radio NZ International is reporting that the Cook Islands fears it might be next to suffer an embargo of the kind seen in Niue, in spite of Dr Maoate's insistence that the Cook Islands is not a tax haven. Rather, he says, US citizens use its offshore regime for so-called "asset protection". Dr Maoate says small nations are easy prey, but that the US and OECD are taking no action against larger tax havens, including Switzerland and Hong Kong.

Dr Maoate is reported to have said that he "would not be surprised" to find the Cook Islands next on the list after Niue.

President of the Cook Islands Trustees Association, Reuben Tyler, has also been vigorously defending the Pacific nation's offshore sector. He said it has been 'self regulating for the past 20 years of operations and there have been no allegations that we have been used for money laundering.' He didn't comment on the fact that British detectives have been in the Cook Islands probing money laundering charges.

He continued: 'Most of the work in the Cooks relates to asset protection and that s a different type of work to the work that other places are doing.' Mr Tyler added that entities established in the Cook Islands are "tax transparent and are reported to the US tax department". He stated: 'That’s not the type of entity that s going to be used for money laundering, and I don’ t think we attract that type of work. The type of work we do isn’t particularly attractive to people who want to get involved in money laundering.'

Mr Tyler is apparently not as concerned as the Prime Minister when it comes to the threat of sanctions. He said it would be bad publicity, but otherwise sanctions would have no real impact in the Cook Islands. Of the OECD, he said the Paris-based organisation is 'quite clearly trying to create a situation where everyone has the same tax laws, something that their own members don't have.'