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The smooth transfer of power from former New Zealand Prime Minister John Key to former Finance Minister Bill English was a strong contrast to the experience of my just concluded travel around the world in 18 days visiting Phoenix, Panama and Paris. It is important to acknowledge that New Zealand’s processes of passing on political power stand out for their calm and general sensibility. This is what we expect. Yet it is atypical of much of the world.
Book-ended by Thanksgiving pumpkin pie and on return, transitional political power, my trip showed more than ever that new Prime Minister Bill English can’t afford to be complacent if he wishes to retain this state of play.
My trip to Phoenix/ LA to further TINZ formative consultation for our Financial Integrity System Assessment (FISA), to Panama for Transparency International’s Annual Members’ Meeting and the International Anti-Corruption Conference (IACC), and to Paris for the Open Government Partnership (OGP) Summit, was filled with graphic and evidence-based case studies from other parts of the world detailing corruption, impunity and the exploitation of citizens.
Donald Trump’s election was a surprise, even to Arizonians who voted for him. His blatant refusal to publish his tax return and interests register shows breath-taking arrogance verging on impunity.
Panama’s bid to have the location of this year’s IACC there was aimed to balance its image as a magnet for shady deals. This bid, which requires at least a US$2 million government payment, was won in August 2015 before the publication of the Mossack Fonseca Panama Papers 8 months later.
By the time the IACC conference started on 1 December 2016, the signage for Mossack Fonseca’s Panama Office had been removed, though the security guards at the gate give things away.
The shocking thing is that there are many other shady organisations, springing from the lack of transparency of Panama’s financial sector.
Reform efforts since the publication of the Panama Papers appear to be cosmetic. A seven-member commission appointed to make its financial system more transparent, in short order saw the resignation of key members, including Nobel Prize winner Joseph E Stiglitz.
According to the 5 December Intrnational Edition of the New York Times, Stiglitz said: “They’re making a valiant effort to sound tough…But the key weaknesses in the transparency framework have not been addressed”. The Times noted that Stiglitz emphasised the importance making the names of beneficial owners public.We are very big on the notion of a searchable registry and they are very opposed to that,” he said.
At the Paris Summit the consensus of the 3000 or so attendees from 85 country members of Open Government Partnership is for a fully public register. It is clear from evidence collected by international law makers that behind the veil of secrecy, there are at least two crimes being committed in the forms of financial crime and/or organised crime. Lack of transparency also enables tax abuse.
New Zealand has a major opportunity to take the lead on preventing financial crime. With the legislation for AML Phase 2 before Parliament, it’s important that our new Prime Minister pushes hard to progress the new legislation to ensure supervision of lawyers, accountants and real estate agents a soon as possible. And it’s timely for our new Deputy PM to put on her hat as State Sector Minister and does her homework on the many lessons learned from New Zealand’s now deeper commitment to Open Government Partnership.
A essential lesson learned from my travels is the importance of transparency in financial markets. It is clear that TINZ is leading with its approach to demonstrate the strength and weaknesses of the New Zealand system through FISA. There are strong indicators already that the assessment will demonstrate that New Zealand’s financial system is more focused on the importance of integrity than elsewhere. Do take a moment over January to participate in the formative consultation process for FISA.
Thank-you for your support of TINZ over 2016 and all the best for 2017
Suzanne Snively, Chair
Transparency International New Zealand Inc.