The Organised Crime and Anti-corruption Legislation Bill will bring New Zealand into line with international conventions and responds to recommendations from the OECD and the US around tightening our defences against organised crime.
The Bill seeks to improve New Zealand’s ability to collaborate with international law enforcement agencies to disrupt organised crime and to respond quickly and effectively to new criminal activities as they emerge.
It will bring New Zealand into line with the UN Convention against Corruption and the OECD Convention on Combating the Bribery of Foreign Public Officials in International Business Transactions. It will also allow implementation of the agreement with the US on Enhancing Cooperation in Preventing and Combating Crime.
It is an omnibus bill that amends a number of different Acts and will eventually be divided into 12 bills.
The Bill will:
- amend the Anti-Money Laundering and Countering Financing of Terrorism Act to require banks to report all international wire transfers over $1000 and all physical cash transfers over $10,000 to the Financial Intelligence Unit of the New Zealand Police (currently they are required to collect identity information on these transactions but can make their own assessment on whether the activity is suspicious and should be reported)
- clarify that intent to conceal is not necessary to prove a money laundering offence and remove the requirement that the property laundered must be the proceeds of a crime punishable by at least five years in prison
- crack down on identity theft by, among other things, making the sale, transfer or distribution of unlawfully obtained identity information a criminal offence
- expressly empower the Police to share personal information with their international counterparts
- make it a criminal offence for a foreign public official to accept a bribe and forany person to accept a bribe for an official
- remove the dual criminality requirement in the Crimes Act 1961 so that New Zealand can prosecute bribery of a foreign public official even where it is not an offence in the official's country
- raise the maximum prison sentence for bribery and corruption in the private sector from two years in prison to seven years to align it with the public sector (this will allow New Zealand to ratify the UN Convention against Corruption, 11 years after signing it)
- update the definition of ‘crime involving dishonesty’ to include bribery and corruption offences
- amend the Companies Act to ensure that companies record in a consistent manner small facilitation payments made to speed up processes to which the payer is already entitled
- amend the Income Tax Act 2007 to ensure that bribes are not tax-deductible, and
- make people-trafficking an offence within New Zealand rather than just across borders.
Chapman Tripp comment
New Zealand is perceived in international surveys as relatively corruption-free. There is no evidence that our enforcement authorities have been hindered by our current anti-corruption framework, which treats the bribery of public officials as the serious criminal matter it is. So the Bill should be seen as an incremental update to bring our laws into line with international best practice.
Nonetheless, the signalling effect of the Bill is important to affirm New Zealand’s commitment to international best practice. An example is the proposed clarification in the Crimes Act that body corporates can be held liable for the foreign public official bribery offence. Until now this has arguably been a grey area, as was highlighted by the OECD Working Group on Bribery in October 2013.
Changes to the anti-money laundering rules have been well signalled and will give Police more direct oversight of potentially suspicious transactions. Financial institutions have already been preparing for these changes.
With the exception of the proposed requirement for companies to record facilitation payments in their accounts, the Bill shouldn’t materially affect the substance of compliance programmes already in place. But it should act as a prompt for businesses to ensure that their compliance frameworks reflect best practice, and to remind staff of applicable anti-bribery and corruption policies.