Key wrong to claim “full disclosure” of NZ foreign trusts

John Key’s claim that the full details of foreign trusts can be revealed is contradicted by his own Minister of Revenue who, in 2012, said IRD could only investigate dodgy trusts if it had the name of the trust it was investigating, the Green Party says.

In 2012, the Green Party asked then Minister of Revenue, Peter Dunne, what specific information overseas tax officials needed to know about New Zealand foreign trusts before they could receive further information on them from IRD. Dunne said, “…At a minimum, some sort of identifying information such as the name of the trust, and the reason for the query would be required.”

“The Prime Minister’s ongoing defence of New Zealand’s foreign trust regime is becoming an international embarrassment,” said Green Party Co-Leader James Shaw.

“Yesterday, Key continued to defend New Zealand’s secretive foreign trust industry by claiming that the full details of the trusts can be revealed, if necessary.

“What the Prime Minister didn’t say was that the IRD has to first know the name of any trust a possible tax criminal might be using before they can act. It’s unlikely IRD or any overseas tax officials will have this information except in exceptional circumstances, like the recent leak from Mossack Fonseca.

“The fact is, if a Russian oligarch wanted to hide his assets in a New Zealand foreign trust, Russian tax authorities would have no way of being able to ask the IRD to investigate unless they somehow knew the name of his trust.

“New Zealand’s foreign trusts are so attractive because of their almost unbreakable secrecy.”

The Government yesterday refused to allow the Green Party to introduce a Bill that would require foreign trusts in New Zealand to register and disclose more complete information on the identity of the settlors, their country of residence, beneficiaries, and require annual financial reporting. This would enable real-time information sharing with those 40 countries New Zealand currently has double tax agreements with.

“Our current foreign trust laws are unsustainable. IRD has suspected this for years, and now needs the Government to empowered it with simple, new transparency and record-keeping rules to keep the foreign trust industry honest,” said Mr Shaw.

“Why is Key opposed to greater transparency for New Zealand foreign trusts, when greater transparency will only hurt people using foreign trusts for illegitimate purposes?”

Link to Parliamentary Question:

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