Tamatoa Jonassen is the new face at the helm of the Cook Islands Financial Services Development Authority (FSDA). Global Island News interviewed the FSDA CEO to discuss the jurisdiction’s force for good credentials, future trajectory and portfolio of financial products.
The Cook Islands FSDA was established to encourage, promote, and develop the Cook Islands financial services industry to achieve sustained growth in an economically beneficial, socially responsible, and reputable manner. As new CEO, Tamatoa Jonassen explains, “the confidentiality and protection afforded under Cook Islands legislation has given those with affluence the confidence to place their trust in the Cook Islands.”
Jonassen is keen to point out that the wealth of experience with international trusts, for which the jurisdiction is arguably most famous, extends to the whole portfolio of financial products available, including: foundations, captive insurance, international companies, limited liability companies, and international partnerships. Moreover, with its experience and strategic location, the Cook Islands is perfectly and uniquely positioned to tailor its services to both common law and civil jurisdictions, with the American and Asian markets continuing to constitute key targets. As Jonassen succinctly puts it, the Cook Islands “acts as a Pacific bridge of financial security”, which facilitates global trade.
Its premium location, two hours behind Pacific Time, five hours behind Eastern Standard Time, and six hours ahead of Singapore and Hong Kong, affords the Cook Islands a key advantage in respect of commencing transactions and making wire transfers in a timely fashion between two continents, and the World’s two largest economies. As such, the Cook Islands helps to support and facilitate global trade, economic growth and onshore jobs, and more specifically provides the ideal jurisdiction for holding companies for those whose businesses operate from both the United States and Asia.
The Cook Islands acts as a Pacific bridge of financial security.
For many, the Cook Islands is known as a world-leading luxury destination for tourism, yet by way of driving diversification in its economy, the Cook Islands government is committed to growing its international financial services sector. This provides for many professional high-paid employment opportunities, as well as helping to retain qualified Cook Islanders, and providing important revenues for the Cook Islands economy, which are re-invested to support national development priorities.
As the FSDA CEO indicates, “several government agencies, tasked with promoting, regulating, and supporting the industry, along with licensed banking institutions and trust companies, provide jobs for many qualified Cook Islanders, and these jobs are well remunerated.”
He goes on to explain that as a service-based industry, transactions are conducted digitally, and are reliant on intelligent, educated and qualified professionals with legal, accounting, financial, and technical experience. He adds that, unlike other sectors, the Cook Islands international financial services industry does not “deplete natural resources or leave environmental footprints, but serves to attract and retain valuable human capital essential for national development priorities, and allows for new financial institutions to extend their reach and their business into this leading jurisdiction.”
The financial services industry today is very different from what it was 20 years ago.
It is clear that in his new position at the helm of the FSDA, Jonassen is keen to impress upon the World at large how this Cook Islands industry, of which he is the public face, not only benefits those that recognise the merits of the international financial services made available by this still largely undiscovered Pacific gem, but also positively impacts Cook Islanders’ lives on the ground.
When asked about the extent to which consultation with international regulatory bodies and the private sector informs legislative developments, Tamatoa Jonassen is firm in his assertion that the Cook Islands will do what is required to ensure it is compliant, without compromising the integrity of its products and services, so ensuring it continues to serve tangible requirements in the marketplace.
He readily admits that “the financial services industry today is very different from what it was 20 years ago.”
Jonassen places this into context by explaining that the Cook Islands international financial industry was subject to minimal regulation at its inception, but that this state of affairs changed significantly at the beginning of this millennium. At that juncture, he explains, the Financial Action Task Force, through its Asia Pacific Group, sought from nations a greater awareness of the significance of money transfers and use of entities by those involved in terrorism and crime. As a result, the Cook Islands passed a suite of legislation in 2003 and 2004, including the: Financial Supervisory Act; Financial Transactions Reporting Act; Proceeds of Crime Act; and the Mutual Assistance in Criminal Matters Act. As part of this process, local financial institutions were consulted, and as the FSDA boss points out, “While there was some initial opposition to what some saw as a breach of undertakings of confidentiality, it is now universally accepted that international cooperation is a hallmark in combating crime, particularly transnational crime.”
In this decade, the focus has shifted to cooperation in the sharing of information to tax authorities, and while initially the OECD pressed for consistency between nations in their tax regimes, this, Jonassen tells us, did not find favour. Consequently, this has been substituted for the exchange of information, initially with Tax Information Exchange Agreements, but more recently with automatic exchange of information – first initiated by the United States with its FATCA legislation.
It is now universally accepted that international cooperation is a hallmark in combating crime.
Tamatoa Jonassen explains that in the Cook Islands, developments have been informed by the striking of a balance, whereby throughout, the financial services industry has been consulted to ensure compliance on the one hand, and on the other, that the privacy of those who utilise the jurisdiction is not unnecessarily compromised.
So, what next for the Cook Islands? How can it win the battle for minds in respect of its international financial services provision, and convince powerful political and regulatory elites of its contribution to the global public good? Does the answer lie in joining forces with other jurisdictions to give weight and added credibility to its case, or could this risk diluting its competitive edge?
Jonassen points out that “such cooperation as exists tends to arise because of the presence of trustee companies in multiple jurisdictions, and while there has been some unity shown when financial services jurisdictions believe they are being unfairly singled out, this tends to be temporary, given the jurisdictions, while sometimes complimentary, generally compete with each other for business.”
He cites one example of collective protest being in response to the European Commission including the Cook Islands in a list of 30 jurisdictions, including Hong Kong, the British Virgin Islands and the Bahamas, which it regarded as non-cooperative in tax sharing matters. This, Jonassen reminds us, despite the Cook Islands having received a very positive result from its Phase Two Peer Review with the Global Forum. The conclusion to be drawn, he continues, is that “increasing familiarity and confidence in the minds of the powerful political and regulatory elites will be a task achievable only through mutual respect and understanding.”
As the Cook Islands this year celebrates its 50th anniversary of self-government, it’s a good time to reflect on (its international financial services sector’s) pedigree.
Tamatoa Jonassen makes it clear that the Cook Islands’ international financial services sector has a pivotal role to play in the country’s journey towards becoming fully diversified and fiscally independent. As the Cook Islands this year celebrates its 50th anniversary of self-government, it’s a good time to reflect on the industry’s pedigree, which has been supporting the Cook Islands economy now for over 30 years, to become an integral part of the country’s identity. The FSDA Head describes it as “an industry which not only diversifies the nation’s economy – which also produces revenue through tourism, marine resources, pearl farming, and agriculture – but which also allows access to premium banking services, multinational wealth and corporate services, and management and administrative services in an international best practices framework.”
Global Island News concludes the interview by asking Tamatoa Jonassen what he hopes to bring to bear at the FSDA in his new role as CEO. In his response he explains how he intends to draw on his experience of having lived not only in the Cook Islands, but also in the United States, New Zealand, and New Caledonia. This, he says, has given him “a great appreciation of different cultures, languages, and viewpoints.”
Moreover, with invaluable proficiency in Mandarin Chinese, learnt during two years of voluntary service in Taiwan, a BSc with a double major in Political Science and Information Systems, a Juris Doctor law degree from the University of Hawaii, a law certificate in Pacific and Asian Legal Studies, and a Graduate Certificate in Conflict Resolution from the Matsunaga Institute for Peace, Jonassen’s credentials are not in doubt. He ends by saying that because his family roots run deep in the Cook Islands, he has “a vested interest in its sustainable development and the building of a legacy for the future, through the growth of a reputable financial services sector.”
For more information, visit cookislandsfinance.com.