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Panama papers – Shewan inquiry – our rules are inadequate

Written By: - Date published: 4:25 pm, June 27th, 2016 - 26 comments
Categories: accountability, business, International, tax - Tags: , ,

There were many who were concerned that John Shewan was not a good choice for an inquiry into NZ’s tax haven system. Seems we owe Shewan an apology, as initial reaction suggests that he has done a good job:

NZ foreign trust rules inadequate

The inquiry into New Zealand’s foreign trusts regime has found the current rules are inadequate, and are not robust enough to protect this country’s international reputation.

The review by John Shewan was ordered in response to questions raised about New Zealand’s role in helping wealthy foreigners hide their money offshore, after the release of the leaked Panama Papers.

Mr Shewan has recommended a significant increase in information to be disclosed when a foreign trust is set up, annual reporting and increased enforcement.

He described the current disclosure requirements as “light-handed” and said tougher disclosure rules would act as a deterrent for anyone looking to use New Zealand trusts for illicit purposes. …

Page on the report is here. The Executive Summary is here. Vernon Small’s summary here. Initial response:

The Government has confirmed a shake-up of foreign trusts following a review sparked by the Panama Papers.

And some other reaction…

26 comments on “Panama papers – Shewan inquiry – our rules are inadequate”

  1. NZJester 1

    Is John Key actually going to look like he is doing something before the next election to try and bring in the middle ground voters?
    I guess all the polls must have been telling him that it was not a good look.

    • leftie 1.1

      It’s business as usual I’m afraid. It’s been 8 years of the key National government pretending to look like they are doing something, when they are not… and that won’t change.

      • NZJester 1.1.1

        Well, I did say “going to look like he is doing something” and not “going to do something”!
        Business as usual, like figuring out the very minimum they can do to make it look like they are doing something, but to an extent, it is so watered down as to be near useless you mean?

        More National Party hearty strong soup: 0.001% artificial stock mix and 99.999% water to feed to hungry voters.

  2. Sirenia 2

    John Shewan describes why NZ is a tax haven but says NZ is not actually a tax haven. But his remedy proves we are, and therefore need to have disclosure rules.

    • leftie 2.1

      Yes, exactly right Sirenia, but John key will be pleased his mate is backing him up by declaring NZ as not being a tax haven, when clearly it is. That was always going to be the rhetoric. Actions speak louder than words, don’t they?

      • Greg 2.1.1

        Are you surprised, the Treasury reported to Key that the changes he wanted to implement in 2010 would make NZ a tax haven, and have negligible effect for NZ tax base, when Key kept quoting the treasury report, their tax haven threat had been removed in the history,
        Yet Keys dream of NZ being a pacific financial hub was suppose to make huge amounts for the IRD.

        • leftie 2.1.1.1

          No I am not surprised in the least. And no, imo it wasn’t. John Key’s dream was to create huge wealth for himself and his mates. Key always intended to make NZ a tax haven. John key is a derivatives trader, tax havens have always been a factor, and being a lying dishonest PM with no accountability whatsoever, has made the job so much easier, don’t you think? Is it sheer coincidence that the NZ dollar is one of ten most traded currencies in the world?

          • Greg 2.1.1.1.1

            Treasury debt is down to 112 Billion, so they must have made a killing the pound dropping.

            • leftie 2.1.1.1.1.1

              NZ’s govt debt is always going up, never down under John key’s 8 years of misgovernance, and it’s during Key’s tenure as PM that NZ’s dollar has become one of ten most traded currencies in the world. Hence my question, is it just a sheer coincidence then, when NZ has a derivatives trader as PM? What has the pound dropping got to do with it? Brexit is the cause for that.

  3. Bearded Git 3

    Reporting of annual accounts, searchability and details of who benefits financially are exactly what Labour and the Greens said was wrong with the system.

    Key denied there was anything wrong at all. Liar.

    And why is Key saying “the government is likely to implement most of the recommendations”. He should be saying “the government will implement all of the recommendations”.

    • whispering kate 3.1

      Yes BG that was my first thought, when he said “the government is likely to implement most of the recommendations” – although I thought he said “the majority of the recommendations” – I think the PM is a tosser and a liar and will weasel out of this inquiry every way which way he can.

  4. North 4

    Key said we had “full disclosure” therefore no problem. Shewan says Key’s “full disclosure” is inadequate. The suggested changes are quite substantial. Key always knew his “full disclosure” was a distracting and diverting soundbite. Whom was Key looking after, whom was he featherbedding when he embraced ‘no problem’ ?

  5. Bill 5

    If Obama and others hadn’t indicated that they were going to do something about off-shore trusts, do you really think Shewan would have compiled a report like the one he has?

    I don’t think so.

    Shewan was a hopeful punt – a bit of insurance on the off-chance that international sentiment was such that New Zealand could get away with carrying on as before. Internationally, it hasn’t panned out the way that perhaps Key and others would have wished, so ‘their man’ returns a report that anyone else would have returned under any circumstances (ie – whichever way international sentiment was headed).

    • Bearded Git 5.1

      Key simply won’t implement the recommendations.

      • Draco T Bastard 5.1.1

        Well, he won’t implement the important ones or will implement them in such a way that there’s large loopholes that his buddies in the finance sector will easily get around and so NZ will remain a tax haven.

  6. reason 6

    Gosh, fancy Shewan doing a half decent job when he was under so much scrutiny we had a microscope up his ass………. and we all knew Key had set us up as a tax haven

    Personally I think Shewan owes us about $440 million which is the 20% the banks were let off ………………… I’ve never heard of a beneficiary getting 20% back when they commit fraud….. and they can go to jail for stealing 0.01% of what the aussie banks tried to drive off with …..in Shewans tax vehicle .

    The problem is that neither Shewan or any of the bank managers went to jail or lost their jobs …………..

    Because of this we can be damn sure they will be having another go …… if they are not doing it already.

    Its an environment of huge rewards if the fraud sticks ……………. and no punishment if it does not.

    And given that Key regards Shewans expert opinions as better than justice wild and the other high court judge who judged him …. both of whom thought he or his ‘tax vehicle’ were a con………….. when will key change the law to make shewan legally correct.

    Judith Collins probably has some tax loop holes, possibly involving kauri logs to contribute to nationals new but inevitably shit law.

    When is Key going to show his tax returns ?.

    • leftie 6.1

      +100 Reason. Not only Oravida swamp kauri, add Oravida milk, and Oravida waters, and no doubt other primary industries Judith “conflicts of interests” Colins/Oravida are heavily involved in.

      Saw a pic of Collins in an online news website, I thought she was looking very “Angela Merkel” these days.

  7. Greg 7

    Shewan has done a real team players job, reporting back using almost the exact words John Key has used to describe the zero rated tax company trust structures, (dont mention Tax Haven, dont mention Tax Haven, doh) with making them complaint with EU Tax avoidance and money laundering rules. Its a pity that he justified an extra payment to the IRD early this year of 205 Million dollars to get them complaint. Thats a really sound economic decision by the economic brilliance of our dear leader.

  8. Incognito 8

    Key said the recommendations were sensible and well-reasoned and there had been “no real push-back” by Cabinet.

    “Most” would be put in place, though anti-money laundering law changes would be covered by laws already in the pipeline.

    http://www.stuff.co.nz/business/81497014/shewan-report-recommends-greater-disclosure-annual-returns-by-foreign-trusts

    Strike me down with a feather; Key and the Nats accept this report just like that without any argy-bargy!?

    • Greg 8.1

      They dont know what the big players are going to do, so its a each way bet.
      Says a lot how they have not been open to investigation by regulated agencies.

      Just how many are actually legitimate.

  9. Keith 9

    We’re not a tax haven according to Mr Shewan, essentially in defiance of what is being advertised to overseas clients wishing to hide their money tax free. So in that respect the whitewash is complete, Key will claim a victory. What a surprise…not!

  10. One Anonymous Bloke 10

    I’m inclined to be cynical, and you can’t ignore what Deborah Russell and Julie-Ann Genter are saying. I fully expect they’ll be keeping a close eye on the lying Prime Minister to see how he corrupts the intent of the reforms.

  11. Smilin 11

    Its all very fine of the govt to institute one of their own to do the job that a Royal commision should have been doing with our elected representatives fully briefed on all the shit hiding behind this for the last god knows how long
    Also its not news Bernie Sanders has been at the US for 10 yrs plus over this crap and this govt and LABOUR HAVE BEEN SWINGIN THE LEAD ON IT
    Key and his not so funny money games is enough to give you the you know what

  12. So we had to pay this Shewan guy to tell us stuff that we already knew back in 2013?

    • ALZ 12.1

      The OECD has been working on and advising our government since 2012 at least.
      It was a stall for time and a false way of claiming that the work was done by Shewan at the instructions of national (to look like independent )

      Trying to claim glory for straightening out the “near criminal” system they participated in for years. And which has been on the cards anyway for years via
      the oecd. No one will be prosecuted for fraudulently filing tax papers, no money will be recovered from the billions misappropriated over years. It is another disgusting sham.

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