New Zealand Alleged to be Prime Place for Rich to Hide Money

New Zealand is at the centre of a web of secretive, tax-free shelf companies and trusts which are being used by wealthy Latin Americans to channel funds around the world, according to a report released today based on leaks of the 'Panama Papers'.

New Zealand in the Spotlight

Finance Magnates recently reported that 20 banks had been given a week to conduct investigations into ties with Panama-based law firm, Mossack Fonseca. Now, New Zealand has found itself in the spotlight with over 61,000 documents which form part of the massive leak of offshore data from Mossack Fonseca being analysed, showing how the world's rich take advantage of offshore tax regimes. Mossack Fonseca is alleged to have promoted New Zealand as an ideal place to do business due to its tax-free status, high levels of confidentiality and legal security.

The new world of online trading, fintech and marketing - register now for the Finance Magnates Tel Aviv Conference, June 29th 2016.

Prime Minister John Key, who is now facing pressure to take action on rules already under consideration to tighten anti-Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term requirements, said it was "utterly incorrect that New Zealand was a tax haven", adding he was" open to changing rules around foreign trusts if advised by a review or the OECD."

Opposition Labour Party Leader Andrew Little said the government must act to "preserve New Zealand’s reputation by shutting down the system that sees our country implicated in a massive global network of tax avoidance."

According to the report, Mossack Fonseca's main contact in New Zealand was allegedly Roger Thompson, co-founder and director of accountant firm Bentleys, the registered office of Mossack Fonseca, New Zealand. Thompson was listed in more than 4,500 Panama paper documents, according to the report. Thompson said that in his experience, the use of trusts for tax evasion was not common and his firm did not assist people to illegally hide assets.

The New Zealand government said last month it would begin a review of its foreign trust laws after the Panama Papers highlighted vulnerabilities in its legal framework that made it a possible link in international tax avoidance structures because its foreign trusts are not subject to tax.

Worldwide Investigations

Governments across the world have already started investigations into possible financial wrongdoings by the rich and powerful after the leak of more than 11.5 million documents from Mossack Fonseca.

The papers have revealed financial arrangements of prominent figures, including friends of Russian President Vladimir Putin, relatives of the prime ministers of Britain and Pakistan and of China's President Xi Jinping, and the President of Ukraine.