Sep 20 2011

Is New Zealand cracking down on dirty company business?

Posted by: Nick Shaxson in: Thoughts

Update: US is moving on this too. See below.

Not so long ago I tweeted John Key, the Prime Minister of New Zealand, as follows:

nickshaxson: @nakedcapitalism + me: what the hell is going on in New Zealand? http://t.co/AXFfUPm @johnkeypm this isn’t a frivolous tweet – pls answer

This followed research primarily by Naked Capitalism (here and here), with some follow-up from me, about some extremely dirty corporate business being run out of some addresses in Auckland, New Zealand.

There is now a story in the NZ Herald about this, which starts:

“Commerce Minister Simon Power wants the taxman to help crack down on NZ registered companies implicated overseas in smuggling, money laundering and tax fraud.”

Good. The story adds:

“Norman was alerted to the company by a Naked Capitalism blog.”

Well, whatever happens here, it’s heartening to see that exposure sometimes helps focus minds. Reuters seems to have achieved a similar trick recently with Wyoming and Delaware. Long may this kind of exposure continue. News fresh out today too: the U.S. now seems to be moving on this, at a Federal Level too. As part of Obama’s new Open Government Partnership, I am delighted to see this:

8. Increase Transparency of Legal Entities Formed in the U.S.
Legal entities can provide access to the international financial system for illicit actors and may frustrate financial investigations. To increase transparency over the next year, we will:

• Advocate for Legislation Requiring Meaningful Disclosure. As a critical element of a broader strategy to safeguard the international financial system from such abuse of legal entities, the Administration will advocate for legislation that will require the disclosure of meaningful beneficial ownership information for corporations at the time of company formation.

That is important stuff.

Back to New Zealand. I note, however, as I research this, that I’m a bit late with this story. Naked Capitalism became aware of a crackdown just days after its previous blogs. What interests me about that Naked Capitalism story is at the top:

Six months or so ago John Key, New Zealand’s no-nonsense Prime Minister, wanted quick action to promote New Zealand’s development into a “Financial Hub“:

“Prime Minister John Key has slammed bureaucratic pin-pricking over the proposed New Zealand financial services hub as “absolute rubbish” and stepped in to put the project on the fast-track.”

One day Mr Key may  have cause to regret getting what he slammed for.

Indeed. Financial liberalisation, eh? Don’t you just love it?

P.S. @johnkeypm never answered me. Ho hum.

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