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Transparency scorns trust laws review

NZ NewswireNZ Newswire 5/05/2016

The government's inquiry into foreign trusts doesn't go far enough and is a wasted opportunity, says Transparency International New Zealand.

The government has appointed tax expert John Shewan to review the laws covering foreign trusts in the wake of the Panama Papers scandal, which revealed details of thousands of foreign trusts around the world and where people could hide their wealth.

The terms of reference include reviewing foreign trusts disclosure rules, enforcement and the exchange of information with other tax jurisdictions. He has been asked to report back by June 30.

Opposition parties have already criticised the review and the man appointed to do it, and now Transparency International NZ says it is "extremely surprised and disappointed" at its limited scope.

"The terms of reference mean the inquiry will merely investigate foreign trusts rather than tackle the broader spectrum of financial crime risks associated with New Zealand companies and trusts," said chairwoman Suzanne Snively.

It ignored substantial government policy work already done and that the inquiry could build on, she said.

Transparency wants the Anti-Money Laundering and Countering Financing of Terrorism Act to cover all professions involved in setting up and managing New Zealand corporate vehicles.

A registry should also show who benefits from business structures so they can be audited and the registry body be properly funded. That should extend to trusts.

Efforts were being made to fight money laundering and ill-gotten asset transfers and other forms of international corruption.

"The transparency of all corporate vehicles, including foreign trusts, is essential to prevent and detect serious crime potentially involving billions of dollars," Ms Snively said.

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