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Australian police return to Vanuatu
Australian federal police officers are back in Vanuatu helping the local force, after the program was scrapped over a diplomatic stoush.

Australian police were originally stationed in Vanuatu to pursue people believed to be funneling money through the country to avoid tax, but the returning officers are no longer chasing tax fraud.

Pacific correspondent Sean Dorney reports from Vanuatu.
JIM MIDDLETON, PRESENTER: Australia has long provided aid to Vanuatu by sending police officers to help the locals.

But that arrangement has been problematic, with Australian officers expelled last year in a diplomatic stoush.

The row erupted after the arrest in Sydney of the then Vanuatu prime minister's private secretary for tax fraud.

Australia's tax office had also been using police officers stationed in Vanuatu to pursue people it believed were funnelling money through the country to avoid tax.

The police program has just resumed, but the officers are no longer chasing tax fraud.

Pacific correspondent Sean Dorney reports from Vanuatu.

SEAN DORNEY, REPORTER: The capital of Vanuatu, Port Vila, is one of the most picturesque cities in the Pacific. It has also promoted itself since independence, 33 years ago, as an offshore finance centre where there is no income tax.

(Footage of Port Vila is shown)

Back in 2008, the Australian Federal Police won a court order authorising them to conduct a series of raids on accounting firms in Port Vila in pursuit of an alleged $100 million in evaded tax.

DEREK BRIAN, PACIFIC INSTITUTE FOR PUBLIC POLICY (September 2008): In the immediate aftermath of those raids there was considerable backlash against both Australia and the government here for allowing the AFP to come in and conduct those raids.

SEAN DORNEY: The presence of the Australian Federal Police has long been controversial. In 2004, some Australian Federal Police were pulled out of Vanuatu after being threatened with expulsion.

Last year, an Australian funded aid project of assistance to the Vanuatu police had to shut down when the police officers conducting it were thrown out of Vanuatu.

That was in retaliation for the embarrassment to the then Vanuatu prime minister, Sato Kilman, when one of his party, on transit through Sydney, was arrested by the AFP for alleged fraud.

(Footage of Bob Car and Mr Kilman in Vanuatu, February 2013 is shown)

However, the Australian Foreign Minister, Senator Bob Carr, on a visit to Vanuatu three months ago, said he and Mr Kilman had sorted the matter out and the aid program would resume.

SENATOR BOB CARR, AUSTRALIAN FOREIGN MINISTER (February 2013): The issue is behind us. I think it is good for the Australian Federal Police to gain experience here. And I think it is good for Vanuatu to have the benefit of their training and advice.

ARTHUR COULTON, VANUATU POLICE COMMISIONER: (inaudible) has lot of funding and there was a problem with police officers going out to the rural areas. During that space of absence, we did face a lot of problems. But we're very happy that the project is back here.

SEAN DORNEY: The aid project has nothing to do with tax. There were other Australian Federal Police based in the Australian High Commission who also had to leave.

But the AFP in Canberra has decided against replacing them.

ROBERT BOHN, CHAIRMAN, VANUATU FINANCE CENTRE ASSOCIATION: Specifically where they ran into trouble was when they were acting on behalf of the Australian Tax Office, the ATO, and operating for them rather than in their own capacity just as general AFP here in Vanuatu.

(Footage of Robert Agius on his way to court in 2012 plays)

SEAN DORNEY: A former chairman of the Vanuatu Finance Centre Association, Robert Agius, was convicted in Australia last year of defrauding the Commonwealth and sentenced to nine years in prison.

However, the current chairman says the police aid project is welcomed back.

ROBERT BOHN: We're happy that the governments of Vanuatu and Australia have been able to work through the issues surrounding the departure of the AFP from Vanuatu. And we are happy that they're back again and that that specific project has restarted.

SEAN DORNEY: But Mr Bohn says the other Federal Police who used to be at the High Commission are not wanted.

Peter Kuhnke is the Australian Federal Policeman in charge of the project. He was amongst those who had to pack up and leave last year.

PETER KUNKE, ADVISER TO THE VANUATU POLICE COMMISSIONER: It's really good to be back. It’s good to be able to finish some of the projects that we weren't able to finish last year. And really work together with the Vanuatu police force to take ownership and sustainability within a lot of the activities that we're trying to help them achieve.

SEAN DORNEY: Vanuatu's police commissioner says the aid project has an emphasis on improving discipline.

ARTHUR COULTON: Yes, certainly. We have had a lot of problems with use of firearms within the force. We saw that in a lot of our (inaudible) in the police force. We intend to beef up the police patrols in town and ensure that there's discipline within the force.

PETER KUNKE: The current project, which started in 2011, has four main objectives. That includes the recruitment, training and professionalism of the VPF; improvements to the police infrastructure; a workforce renewal program and also improvements into the internal governance of the Vanuatu police force.

SEAN DORNEY: The project has already refurbished the police college and older police are being replaced with new recruits.

On the other vexed issue, taxation, Mr Bohn says the Finance Centre Association would like the Australian Taxation Office to send somebody to Port Vila to sit down and discuss their concerns.
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