Beneficial ownership register a case of sledgehammer vs nut
A compulsory public register of company and limited partnership beneficial ownership should be firmly rejected, says Chapman Tripp partner Geof Shirtcliffe.
The firm has argued strongly against the proposal in its submission on the Ministry of Business, Innovation and Employment (MBIE) discussion document.
“The provisions of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act are recognised internationally as providing a strong bulwark against the use of corporate structures for criminal activities,” he said. “There is no persuasive case for going further.”
To also require that the beneficial owners in a company or partnership be publicly disclosed would:
* trespass across the right to use legitimate long-established arrangements to protect privacy and confidentiality
* undermine the deliberate confidential nature of the limited partnership for investors
* be inconsistent with the current approach to trusts, and
* create unnecessary compliance costs and bureaucracy.
“It is important that New Zealand registration procedures are not misused. But New Zealand law has already tightened up considerably on opportunities for abuse, via requirements for New Zealand-resident directors, new anti-money laundering rules, and an increased focus by the Companies Office on verifying director information.
“Even if these turn out to be inadequate, there are additional, far less intrusive, enhancements which should be considered.
“The Draconian imposition of compulsory beneficial ownership disclosure is simply not justified, and will do nothing to protect New Zealand’s World Bank ranking as first among 189 countries for ease of doing business and for starting a new business,” Shirtcliffe said.
“The only beneficiaries will be the lawyers instructed to create business structures which continue to preserve personal privacy and commercial sensitivity,” Shirtcliffe said.