Niue Appeals To George W Bush Over Banking Embargo

Mary Swire, Tax-news.com, Hong Kong

07 February 2001

Tax-news.com has been following events in Niue, the tiny Pacific offshore centre which last week was hit by US sanctions on banking with the island and is generally suffering a crisis of confidence following months of hard campaigning by the OECD and Financial Action Task Force.

Yet Niue is showing great spirit in its fight-back and is appealing directly to President George W Bush in an attempt to end the block on transactions. The government is reported to have written to the US President after Chase Manhattan and the Bank of New York banned all transactions with Niue.

Mr Young Vivian, Niue's deputy premier, says the embargo has serious ramifications for Niue and means that the island cannot pay some of its bills, several of which have to paid in US dollars. Mr Vivian was quoted as saying: 'The petrol boat is here now, the fuel boat is here now, and they require us to pay their bills immediately when we receive the statement. So once the boat has gone back, then they will send us the bill and we'll have to pay it in American dollars.'

Niue is disputing the FATF's recent conclusion that the island, along with a number of other tax havens, has not enacted and implemented all the necessary reforms in order to be removed from its now-infamous blacklist. The tax haven has the support of the Cook Islands and New Zealand, too, has said it is ready to provide assistance to help Niue tighten its anti-money laundering controls.

New Zealand Foreign Minister, Phil Goff, commented on the US sanctions on Niue: 'Now clearly, this hasn't gone far enough. As far as the two banks are concerned, my guess is that Niue would want to get further information from those banks, specifying where the problem lies and what action is necessary to correct it. And New Zealand would obviously cooperate with Niue to help it meet those particular standards once the problem is properly identified.'

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