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Light-fingered regulation

Written By: - Date published: 3:23 pm, July 10th, 2012 - 16 comments
Categories: crime, scoundrels - Tags: , ,

New Zealand-registered shell companies are being used for money laundering, according to Mike Field’s story in today’s DomPost. Here’s a summary:

in the last two years Fairfax Media has exposed hundreds of companies on the Companies Registry used to launder money.

Last week New Zealand shell companies, using an Albany, Auckland, address were key players in a missing US$1.2 billion (NZ$1.5 billion) from the Kyrgyzstan’s largest bank, AsiaUniversalBank, which, like Anglo Irish, had to be nationalised.

New Zealand has been struck off a prestigious European Union banking “white list” because of the ease with which shell companies can be used to launder drug and terrorist money. This came after revelations a Queen Street shell company washed US$680 million of what may have been Russian Mafia money through a Latvia bank.

Earlier this year Fairfax Media revealed another Queen Street company was implicated in a Ukrainian oil rig scandal involving a missing US$150 million. A London based non-profit NGO, Global Witness, last week said New Zealand had become part of the “off-shore” problem and was “a critical link in the ‘supply chain’ for corruption”.

Field goes on to say:

The government has repeatedly said it will tighten company registration to prevent money laundering, but the bill languishes well down on the order list.

The Companies and Limited Partnerships Amendment Bill was introduced to Parliament on 13 October 2011. It is obviously not a priority. The Anti-Money Laundering and Countering Financing of Terrorism Act was passed in 2009. Regulations requiring compliance do not come into force until June 30 2013. No hurry then.

Perhaps that’s why Key’s plan for New Zealand to become an international finance centre has been ditched – another casualty on the road to the brighter future.

Key’s government is big on regulating the behaviour of beneficiaries, but slack when it comes to money-launderers. So much for their beloved light-handed regulation.

16 comments on “Light-fingered regulation ”

  1. Is “light fingered regulation” where the middle finger extended vertically, the other fingers clutched in a ball and the back of the hand presented to the country?

  2. mike e 2

    Neo conmanKey all washed up in money laundering.Would you trust an investment banker.
    More scandal in UK Tory party as Osborne Caught himself lying.

  3. Draco T Bastard 3

    Key’s government is big on regulating the behaviour of beneficiaries, but slack when it comes to money-launderers.

    The key differences between the two groups:
    1.) Beneficiaries are poor and the NACTs don’t know them or want to know them
    2.) The money-launderers are rich and the NACTs know them or want to know them and want to be just like them (there’s the true politics of envy).

  4. jbc 4

    NZ has been the easiest place to start a business for the past decade or more, and nothing has really changed in that respect across the last change of government.


    Having started a business in NZ and other highly ranked countries I can see why. NZ is super-lax on proof of identity, proof of beneficial ownership, etc. It is also pretty lax on enforcement and penalties.

    NZ has no national identification scheme and these have been roundly rejected. You don’t need a passport or drivers license to start a business. If you can’t enforce identity proof for locals then it is wide open for everyone else.

    The last government used to crow about this ranking whenever they received criticism about being anti-business.

    Now it is a bad thing, apparently. Contrast with:

    Setting up business: we’re prize winners

    New Zealand, a great place to do business


    • Colonial Viper 4.1

      Its a fundamental misunderstanding of what it takes to drive a powerful economy. Availability of capital, expertise and access to networks of influence and SME peers are key.

      Being able to register a legal company in 5 minutes is unimportant in comparison.

      • aerobubble 4.1.1

        Indeed. Its actually an additional tax to set up business relationships when you have to check who you are working says they are. Light regulation is as much a deterrent to business as too much.
        Too little quality and lots of quantity is a tax on your complaints department. Only an accountant PM, who free loads off confidence provided due to double entry accountancy, could insist he has the rest of the economy running well. He’s going to get us back to balance!!! Anyone who calls themselves a capitalist, or a business person, isn’t at all interested about getting back to balance, they’re interest in substantive matters like the cost of doing business being prohibitively high in NZ.
        The risk premium. The lax standards of government. Rubber stamping, looking active, shifting assets ownership around, all just lazy wasters on the tax payer dollar. The biggest bludgers are the National party cabinent.

    • Requiring a driver’s licence or passport to register a business would not slow the process down in most legitimate cases but it would make it much more secure. I don’t see why we can’t have a little of both.

      • jbc 4.2.1

        Requiring at least one director and the company secretary to be NZ residents would be a start. That, together with a little more regulation and a lot tougher criminal penalties for breaking the rules would also help.

        • Draco T Bastard

          Requiring at least one director and the company secretary to be NZ residents would be a start.

          Ah, but that would be against the free-market principals of allowing foreign ownership.

          • jbc

            Not at all. Director does not mean shareholder, just someone who is legally accountable and with fiduciary responsibility to the company. Someone to put before a court.

            It’s not a tall order at all – if you really do want to have a company in NZ.

  5. jbc 5

    Being able to register a legal company in 5 minutes is unimportant in comparison.

    I totally agree with that, and that’s what I always thought when “easiest place to start a business” was trotted out over the past decade or so.

    My points were (implicitly):
    1. The likely connection between “ease of starting a business” and NZ shell companies being used for shady dealing.
    2. That “ease of starting a business” was never (to my recollection) a bad thing during the past government tenure.

    Yes, the whole “ease of starting a business” thing is mostly meaningless – unless you are at the bottom of the ranking. It is what happens after that that is important.

    Add some tough identity checks and accounting regulations. No argument there.

  6. muzza 6

    The City of London being the home to the financial industry almost completely deregulated, is simply extended to the little outpost of NZ.

    Why would it be any surprise!

  7. You guys really, really don’t get it do you?

    John Key has done exactly what he set out to do. He allowed this country to become a financial centre of massive proportions. Just not the centre you would want but one which the Banksters desperately needed.

    The bankers are the biggest drug dealers of them all and were getting caught left right and centre and were having to pay huge fines. They needed a place to launder their money and were the muppets were stupid and naive enough to think the slow attempt at regulation was just a bit of a lapse from their otherwise honest government.

    In fact it has just come out two days ago that Bank of America in which John Key has most of his paper wealth in shares was laundering big money for the same Mexican drug lords as Wells Fargo in the previous link.

    John Key is a criminal banker connected to the most criminal banks and does their bidding every which way they tell him too. Even Roubini is calling for the banksters to be strung up in the street, and he is as mainstream as they come.

    Only one country in the world still looks at the banking world as a righteous industry and that is New Zealand. The rest of the world is getting ready to throw them of a cliff see here, here, here, here and here.

    The last link, about a Dutch pension fund to sue Goldman Sachs about LIBOR should worry you greatly because the Cullen Fund had a Merrill Lynch “wealth” manager/investment banker (i.e. Derivatives peddler) on its initial board of Guardians. Talk about having the fox in the hen house!

    • muzza 8.1

      Ev, most people don’t want to “get it”, it would shatter their illusions about all which they believe to be how the world “functions”

      Sadly the “not getting it” is allowing the rot to continue, and it will get worse, should people not man up, and take back what they have, and are losing each day.

      The banking fraud is the one of the largest conspiracies of all time (certainly the worst financial conspiracy ever known), and its been so very easy to see coming, understand what is happening, and thus smelling John key, the minute he turned up in NZ politics.

      People will get what they allow to happen to them, the sad part is that those who know, and try to spread info, in the desire to get more people “up to speed”, so that hopefully critical numbers can be reached, get to go largely the same route, as those who want to use silly name calling, and ignore whats goin on.

      Maybe we get our country back, maybe we dont…

      Those who refuse to get their head out the sand, are part of the problem, they could well be part of the solution, if only they pulled it out!

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