Dear Editor, I read Tim Arnold’s comments in the paper on Wednesday with much interest and disbelief (Arnold denies Crown Law exclusion in drafting controversial crypto bill, Cook Islands News, April 17).

I appreciate Tim has an image and reputation to protect but to write about “due process” being the basis of his agreement to get involved in drafting the Crypto Bill is disingenuous.

I find it convenient that his yearning for “due process” did not extend to proper consultation before the Bill was tabled in Parliament. Regardless of who dictated the process Tim knew the lack of proper consultation wasn’t right and went along with it because it benefitted him and his client Drumcliffe. Tim said it himself that he has never experienced any process like this in his whole legal career.

His recommendation, if true, that the Bill must go immediately to Select Committee after it was introduced in Parliament, is even more disingenuous, particularly in the Cook Islands political context that he is well familiar with. Select Committee consultation becomes political and a numbers’ game. Genuine and proper consultation should have happened before Parliament with all relevant public and private sector stakeholders and I would be surprised if the Bill went this far given all the submissions that have transpired.

I met with Tim, Karen Harvey, Jim Little of Drumcliffe and a representative from another company about the Bill. I asked why the Bill wasn’t consulted widely before it was tabled in Parliament and Tim specifically replied he had direct instructions from the PM not to consult. I had asked a similar question with respect to Financial Supervisory Commission FSC (being one of only a very few who knew about the Bill) not consulting with the trust industry when they normally update us on new developments related to AML (Anti-Money Laundering) and financial services and crime. Karen replied it was because FSC was given a brief to keep the Bill quiet because we (?) wanted to be the first in the world to pass this type of legislation. I didn’t buy that (many people don’t) and I questioned who was advising the PM to keep the Bill quiet to which I received no answer.

There is a big difference between this Bill and recent legislation the trust industry initiated. Our legislation went through proper consultation with relevant stakeholders and was thoroughly vetted by Crown Law before it was introduced to Parliament. In fact, we went through many long delays as Crown Law insisted on taking their time to review and redraft our legislation.  

There are many issues with this Bill as pointed out in the various submissions. One of the issues I feel strongly about is the politicisation of the Cook Islands and the risk of it being mired in geopolitics. I pointed out language in the definition of proscribed conduct that speaks directly to Russia in relation to Ukraine, China in relation to Taiwan and North Korea in relation to South Korea. In fact, it was after Jim’s comments in our meeting about Russia, China and Turkey that I paid closer attention to the definitions in the Bill. I have my own personal views about those countries but the point made in submission is that we should not be politicised or used in this way by foreign interests. I’m sure Tim knows these are not uncommon tactics in foreign policy to get at your enemies – using the law to break the law and getting third parties to do your dirty work because you can’t legally do it yourself – and Tim seems to have no problem pushing Drumcliffe’s agenda to use the Cook Islands in this way.  

Drumcliffe is anticipated to be an Agent pursuant to the Bill. The Agent gets immediate payment from the proceeds of seized cryptos once a seizure is made and the balance, if any, becomes public money. What is not known is how much Drumcliffe will get and how much goes to government. This must absolutely be revealed publicly and cannot be part of some secret deal. It is my view that this Bill has nothing to do with crime and has everything to do with money and geopolitics.  

It is apparent Tim is trying to project himself as the person who tried to do the right thing and make sure due process was followed when in reality, I don’t think that’s true. Also, most if not all of what Tim is saying to justify the Bill have been debunked by the submissions that have been presented to date. Crown Law, FSC/FIU, FSDA and MFEM all submitted serious issues with the Bill.

The obvious and appropriate thing to do is to pause the passage of this Bill and send it to Crown Law for thorough vetting. If Tim is genuine about due process then I would like to see him publicly come out and support the pausing of proceeding and referral of the Bill to Crown Law.  

There are some good people on the Select Committee so I would be happy to be proven wrong that this particular Select Committee process is indeed due process and not become a political numbers’ game.

Tine Ponia