Huo Raymond: Companies and Limited Partnerships Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Huo Raymond: Companies and Limited Partnerships Amendment Bill — First Reading 
[Sitting date: 24 July 2012. Volume:682;Page:3867. Text is incorporated into the Bound Volume.] 
RAYMOND HUO (Labour) 
: 
 Listening to the contributions from members from various political spectra I believe members will agree with me that in the context of this bill—namely the Companies and Limited Partnerships Amendment Bill—New Zealand has presented two conflicting images to the world. On one hand New Zealand has an international reputation as a trusted place to do business. Both the World Bank and the International Finance Corporation have ranked New Zealand the easiest of 183 countries in which to start a business. Transparency International ranks New Zealand the least corrupt country of the 183 surveyed. On the other hand New Zealand has been subject to domestic and international media attention on overseas interests exploiting New Zealand’s incorporation process by using New Zealand - registered shell companies to undertake illegal activities. 
It is saddening to read the Fairfax New Zealand news that New Zealand together with Russia has been struck off a prestigious European Union banking and corporate white list. Russia has been struck off the list because of the levels of corruption. Although no reason has formally been announced by the EU from the reports we understand New Zealand has been struck off over New Zealand’s weak money-laundering and terrorism finance controls. Being struck off the white list means that banks and institutions in the EU “will not be entitled any more to make simplified research for banks and institutions registered in New Zealand”. It also means European institutions can no longer accept and acknowledge customer identification and analysis performed in New Zealand. 
In the final days of the 49th Parliament the outgoing Minister of Commerce the Hon Simon Power introduced this bill. This is an omnibus bill that covers a number of proposed reforms seeking to tighten requirements around company registration and company directors to help protect New Zealand company registration processes against criminal activity from overseas jurisdictions and to apply similar measures for limited partnerships. Between then and about the time New Zealand was struck off the EU white list there was a 6-month or so gap so time was of the essence. 
The bill requires each company registered in New Zealand to have a resident agent if there is no director living in New Zealand or in an approved jurisdiction. Resident agents will be responsible for ensuring companies provide accurate information to the Registrar of Companies and will be liable if companies breach their record-keeping and filing requirements under the Companies Act. 
 The bill also gives powers to the Registrar of Companies to investigate and deal with non-compliance with the Companies Act. This includes the power to flag companies on the register that are under investigation. The bill makes similar changes to the Limited Partnerships Act so that those misusing New Zealand companies cannot avoid the new regime by registering limited partnerships instead. 
The bill aligns the Companies Act with the Takeovers Code to ensure shareholders understand the effect that changes in company control will have on the value of their shares. The bill enhances the registrar’s investigative and deregistration powers in relation to companies and limited partnerships. Also the bill introduces criminal offences for directors who commit a serious breach of their duties to act in good faith and in the best interests of the company. 
I look forward to the development of this bill and support those measures introduced in principle. It is shocking to note that one of the incidents at the centre of the domestic and international media attention involved a New Zealand - registered company with a vacant driveway in Auckland’s Albany as a registered address. It was that registered company that had been one of the key players in the US$1.2 billion money-laundering scandal in central Asia. 
New Zealand has an international reputation as a trusted place to do business. We must restore that confidence in the international business community. Thank you.