rgb(145,47,70)
rgb(209,125,45)
rgb(26, 111, 136)
rgb(0,151,117)

Access to International Law Enforcement

New Zealand will also continue to implement bilateral arrangements that will ensure law enforcement in one partner country has full and effective access to the beneficial ownership information of companies incorporated in the other partner country.

Country: New Zealand

Status: underway

Themes: Beneficial ownership

Last updated: December 2020

Classification:

Concrete: Concrete | New: Not New | Ambitious: Not Ambitious

  • 6 Evidence:

    The Companies Act 1993 and Limited Partnerships Act 2008

    2017 Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill

    News and Information about New Zealand's Tax Policies

    New Zealand Police Financial Intelligence Unit- Egmont Group

    New Zealand Mutual Assistance

    Development of the AML/CFT Amendment Act 2017

  • 8 Notes:

    The areas of improvement on this commitment remain:

    - The Companies Registry should be accessed by everyone, including journalists and CSOs, not only NZ Police and the SFO. CSOs and Journalists can support in monitoring corruption.

    - TI NZ also sees an opportunity for greater efficiency of Beneficial Ownership registration. Under current legislation, information is dispersed among professional service providers, and not centralized. This would reduce the burden that now falls on small and medium enterprises.

    Updated: October 31, 2020

    Based on updates received from the New Zealand Government via the Ministry of Justice, main point of contact for TI NZ, more progress has been made since the communiqué on measures to obtain beneficial ownership (BO) information. Further legislation has been introduced and confirmed in the interim which puts the onus on professional service providers to undertake due diligence on counterparts and retain evidence of this. The range of professional sectors now covered has expanded positively. The legal framework that supports beneficial ownership transparency in NZ is made up of the The Companies Act 1993, Limited Partnerships Act 2008, which states for companies and limited partnerships to disclose beneficial ownership information, which are collected by the Companies Registry, an entity that is also allowed to share this information for "law enforcement reasons". In addition, the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009 requires that all businesses with obligations (reporting entities) conduct customer due diligence on any beneficial owner of a customer. The AML/CFT Amendment Act 2017 extended obligations to designated non-financial businesses and professions, such as lawyers, conveyances, and real estate agents. Finally, there is Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017, which followed the Government Inquiry into Foreign Trust Disclosure Rules, received Royal Assent on 21 February 2017. The Act has been implemented by the Inland Revenue Authority, including the registration requirements for foreign trusts.

    Areas of improvements according to TI NZ are:

    - The register should be accessed by everyone, including journalists and CSOs, not only NZ Police and the SFO. CSOs and Journalists can support in monitoring corruption.

    - TI NZ also sees an opportunity for greater efficiency of Beneficial Ownership registration. Under current legislation, information is dispersed among professional service providers, and not centralized. This would reduce the burden that now falls on small and medium enterprises.

    Updated: April 30, 2020

    The Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009 requires that all businesses with obligations (reporting entities) conduct customer due diligence on any beneficial owner of a customer. The AML/CFT Act requires reporting entities to conduct enhanced customer due diligence if the customer is a trust or a company with nominee shareholders. Enhanced customer due diligence requires the reporting entity to additionally obtain information about the name and date of birth of all beneficiaries of a trust or each class or type of beneficiary. The AML/CFT Amendment Act 2017 extended obligations to designated non-financial businesses and professions, such as lawyers, conveyancers, and real estate agents. These measures mitigate the risk of nominees being used to hide beneficial owners in relation to real estate transactions, as lawyers or conveyancers must be involved in the ultimate transfer of real estate. Lawyers and conveyancers are required to conduct customer due diligence (or enhanced customer due diligence) on their client, which includes the purchaser of the land, irrespective of the use of nominees in the formation of the agreement. Basic and beneficial ownership information held by reporting entities via the AML/CFT Act is available to statutory supervisors upon request, and the New Zealand Police can request the information if it is relevant for analysing information received under the Act. Furthermore, Principle 11E of the Privacy Act 1992 is routinely used to ensure the information can be made available. The Police and the NZ Bankers Association have further agreed a process for Police to request disclosures, which is also used for financial institutions that are non-banks.

    Following the Taxation Bill coming into force, Inland Revenue has reported a significant decrease in the number of foreign trusts operating in New Zealand

    .

    Peer reviewer: Response from the Government of New Zealand

    Updated: October 30, 2019

    Based on updates received from the New Zealand Government via the Ministry of Justice, main point of contact for Transparency International New Zealand (TI NZ), more progress has been made since the communiqué on measures to obtain beneficial ownership (BO) information. Further legislation has been introduced and confirmed in the interim which puts the onus on professional service providers to undertake due diligence on counterparties and retain evidence of this. The range of professional sectors now covered has expanded positively. TI NZ notes however that the information is not available to all those with legitimate needs, and that access to such information currently remains restricted to law enforcement agencies. Where the legislative changes fall short is for public transparency. The initial communique states that the register will be “available and fully accessible to those who have a legitimate need for it, including to help prevent abuse.” This would include journalists, and also NGOs such as TI NZ, to research any particular case. New Zealand cannot rely solely on NZ Police and SFO to be sufficiently resourced and focussed on identifying anomalies on the BO Register. Journalists, advocates, investigators, auditors and NGO’s are also very important in identifying corruption and fraud related issues. Broadening the access will improve New Zealand’s ability to combat money laundering and grand corruption TI NZ also sees an opportunity for greater efficiency of Beneficial Ownership registration. Under current legislation, information is dispersed among professional service providers, and not centralized. This increases administrative burden on the micro businesses and SME that make up over 80% of New Zealand businesses. The costs to businesses of managing the beneficial ownership register could be reduced in time and cost. In contrast, a public, central register, from a business point of view, would improve efficiency. New Zealand has a similar system in place for individual identification of users utilizing government databases. (RealMe).

    Peer reviewer: Response from Transparency International New Zealand

    Updated: October 30, 2019

    Limited progress has been made since the communiqué on measures to obtain beneficial ownership (BO) information. The company registry holds basic information but is not required to obtain BO information and this measure is not effective therefore. The measures for foreign trusts lack transparency and do not cover domestic trusts. Property can be purchased through nominees, in this way hiding beneficial owners, both overseas and local residents.

    Updated: May 30, 2019

    The Companies Act 1993 and Limited Partnerships Act 2008 contain requirements for companies and limited partnerships to provide an identifiable and accessible point of contact and disclose their ultimate holding company (if they have one) to identify relationships between companies. The Registrar of Companies may disclose information relating to ultimate ownership and control to a government agency for “law enforcement purposes.” This ensures that information can be shared with New Zealand Police and the Serious Fraud Office to detect, investigate and prosecute corrupt activity

    Updated: October 30, 2018

    The Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill, which followed the Government Inquiry into Foreign Trust Disclosure Rules, received Royal Assent on 21 February 2017. The Bill tightens New Zealand’s foreign trust disclosure rules, including for beneficiaries of fixed trusts. The amendments also allow Inland Revenue to share information about foreign trusts for law enforcement purposes with the Department of Internal Affairs and the Police. Inland Revenue has proceeded to implement the legislation, especially the registration requirement for foreign trusts. The requirement for annual returns will commence later this year. New Zealand law enforcement agencies can receive and provide information through various bilateral arrangements (such as tax treaties), multilateral arrangements (e.g. the Egmont Group), and through formal mutual legal assistance arrangements.

    Updated: June 30, 2018

New Zealand's Commitments
View Methodology Download Data