Government Takes Significant Step Towards Increased Transparency and Accountability

In a move aimed at boosting transparency and combating illegal activities, the New Zealand government has announced plans to introduce new measures requiring companies and limited partnerships to disclose their beneficial owners.

Proposals Aim to Strike Balance Between Public Interest, Law Enforcement Needs, and Privacy Concerns

According to officials, the proposed changes aim to strike a balance between public interest, law enforcement needs, and privacy concerns. Under the new regime, entities will be required to maintain records of their beneficial owners, while individuals will also have obligations to provide information about their ownership status.

Unique Identifiers for Directors and Beneficial Owners

One significant aspect of the proposal is the introduction of a unique “corporate role-holder identifier” (CRI) for directors, general partners, and beneficial owners. This identifier will enable authorities to track an individual’s involvement with multiple entities, making it easier for businesses, creditors, and consumers to verify information.

Public Disclosure of Beneficial Ownership

The government has also announced plans to make beneficial ownership information publicly available on the Companies Office register. This move is designed to enhance transparency and facilitate law enforcement efforts. However, concerns have been raised about the potential impact on privacy and the need for careful consideration in certain contexts, such as investment fund vehicles.

Legislative Path Forward

The proposed changes will be incorporated into a “Corporate Governance (Transparency and Integrity) Reform Bill” expected to be introduced to Parliament in 2022. The bill will undergo a Select Committee stage, allowing public submissions and scrutiny before progressing to the Second Reading stage.

Expert Analysis

Shaanil Senarath-Dassanayake, a solicitor in our Financial Services team, commented:

“While the proposed changes may initially present some challenges for businesses, we believe they are essential steps towards enhancing transparency and combating illegal activities. Our team is committed to helping clients navigate these developments and ensure compliance with the new requirements.”

What’s Next?

For those interested in following this development, we recommend keeping a close eye on the draft bill when it is published and submitting comments during the Select Committee stage. If you have any questions or concerns about how these proposals may affect your business, please do not hesitate to contact our experts.

About the Author

This article was co-authored by Shaanil Senarath-Dassanayake, a solicitor in our Financial Services team.