Unregistered shell companies
have no place in New Zealand

The Panama Papers created a clarion call drawing attention to the specific actions New Zealand needs to take in order to prevent corruption in monetary transactions and asset exchanges.‎ The ease of setting up companies and trusts in New Zealand has earned us an international reputation as a safe haven for criminals and deposed governments to launder money and to store illegally acquired assets.

There is no way of finding out about shell companies or foreign owned trusts unless they earn an income that is taxable in New Zealand. Lawyers and accountants who establish these entities are not required to do due diligence to identify the beneficial owners.

Existing tax-information-exchange agreements with other countries follow an on-request model — if a tax authority elsewhere gets wind of a trust in New Zealand, then the courts might require information exchange.

The Government's initial response was to dismiss the 60,000 references in the Panama Papers as irrelevant, apparently in a misguided attempt to protect the ‎$26 million earned by local professional advisors involved in the foreign trust industry.

From this perspective, rather than impinging New Zealand's reputation, it appears that the Government saw the first wave of the Panama Papers as advertising for a potential burgeoning industry. Just think, there are estimated to be around 12,000 foreign trusts in New Zealand. Why not attract 100s of thousands of trusts as the Panama Papers fallout forces trusts to move from enhanced scrutiny in places like Panama and the British Virgin ‎Islands? Then, New Zealand professional advisors could bring in as much as half a billion a year!

So far New Zealand has only taken collateral damage from the Panama Papers. Mossack Fonseca document researchers have yet to uncover illegal activities in New Zealand or the involvement of high-profile New Zealand citizens or companies.

Just the same, according to the Panama Papers, New Zealand is included on a list of countries identified as a "Tax Haven". At best this is fair warning and calls into question our international citizenship and the laxity of our laws.

Just prior to being pushed from the media by the Panama Papers, a story was published about a Monaco company called Unaoil, run by the jet-setting Ahsani family. Fairfax Media revealed "that billions of dollars of government contracts were awarded as the direct result of bribes paid on behalf of firms including British icon Rolls-Royce, US giant Halliburton, Australia's Leighton Holdings and Korean heavyweights Samsung and Hyundai". Unaoil is owned by UNA Energy Group Holding of Singapore, and that in turn is owned by UnaEnergy Trustees based in Auckland which is owned in turn by Fleetwood Trustees, based in the tax haven of St Kitts and Nevis.

Three weeks later and it is China testing New Zealand's integrity. China is happy to consider important changes to dairy in our free- trade agreement as long as New Zealand agrees to an extradition treaty and that China has jurisdiction over contested islands in the China Sea.

The same week we were reminded again that New Zealand was knowingly using phony carbon tax credits from Russia and the Ukraine tarnishing its "New Zealand Pure" brand.

For years and in many forums, TINZ has been asking for a national conversation about New Zealand values. In the absence of this discussion, it is unsurprising that elected governments reliant on public polling, show little backbone in front of deep challenges to our country's integrity.

Perhaps corruption is already more embedded here than is perceived. Take the case of Donald Scott, who through his appointment to the Greyhound Racing Board, learned about a performance-enhancing drug that couldn't be discovered in pre-race testing. Through the honesty of his staff, Scott was found out, dropped from the Board and fined $10,000. Go figure. The integrity of a dying sport is impugned and that's the only penalty?

Throughout this very busy corruption-news month, the media has been tenacious. Despite lack resources and in the case of TV, limited prime- time showing of current affairs‎, the press has found ways to bring alive the long overdue debate of what values New Zealand stands for.

This debate is important because it is these values that bring legitimacy to government and returns to business.

China is an important economic partner. It is doubtful, however, that having discovered the attraction of our welcoming tourism and international education sectors, that Chinese immigrants and tourists are going to stop coming.

It's time to have the courage of our convictions and stick up for New Zealand's value of integrity. This will attract customers — both for trusted advisors and dairy. Such trade is worth far more to New Zealand's future than an increasingly competitive commodity trade with China or the ill-gotten gains from setting up secret trusts for money-launderers, corrupt government leaders and criminals.

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Recent Activity

Corruption Perceptions Index 2016 TINZ media release
Transparency International’s 2016 Corruption Perception Index (TI CPI) has found that the New Zealand and Denmark public sectors are the least corrupt in the world. 25 Jan, 2017

TINZ OGP Submission
Transparency International New Zealand (TINZ) submitted recommendations for New Zealand’s second Open Government Partnership (OGP) National Action Plan (NAP). Among the recommendations were a call for more ambition in creating NAPs and developing channels of communication for improving engagement with citizens. 19 Aug, 2016

Safeguarding the public interest in research
1 Aug, 2016

EU and New Zealand tax transparency
1 Aug, 2016

London Summit 2016 NZ Statement Commitments Progress
31 Jul, 2016

New Zealand Country Statement Anti Corruption Summit London 2016
29 May, 2016

Shewan Inquiry Submission Media Release
TINZ has provided its submission to the Shewan Inquiry calling on the government to widen the terms of reference to protect New Zealand's reputation and future proof our laws following the release of the "Panama papers". 21 May, 2016

CPI 2015 TINZ Media Release
Corruption Free? NZ drops again. New Zealand has fallen to fourth place in the Transparency International Corruption Perceptions Index (CPI). 26 Jan, 2016