The island, which is halfway between New Zealand and Hawaii, was named in the Panama Papers tax scandal in April when more than 11 million documents were leaked from Panamanian law firm Mossack Fonseca.
The documents exposed how politicians, sports stars and financial institutions from around the world use offshore shell companies to avoid paying tax.
After being reviewed by the International Consortium of Investigative Journalists (ICIJ), the leak revealed that the law firm had created more than 5,000 companies in Samoa on behalf of its clients.
Royalties needed
According to The Guardian, during a state visit in Brussels, Malielegaoi suggested that royalty payments from trustee companies likes Mossack Fonseca fund social programmes for young people vulnerable to drug abuse.
“The Samoa International Finance Authority [Sifa] – which registers companies that do not actually come to Samoa – is very important for financing our youth at sport.
“On top of the increase in the force and frequency of storms, we have a new problem of drugs coming in on boats through our customs,” said the 72-year-old Malielegaoi, who has been in power since 1998.
He denied any wrongdoing by Sifa, arguing that the department’s operations are legal and regulated while Samoa has signed up to three out of the four anti-money laundering standards.
Malielegaoi was meeting with officials in the EU to secure a €20.2m ($22.4m, £16.7m) subsidy for the island’s 200,000 people who mainly survive on fishing and remittance payments from the 300,000-strong diaspora living in New Zealand, Australia and the US.
