27 September, 2018

New Zealand needs to increase its efforts to fight foreign bribery

Just released report shows that New Zealand has made little progress since its 2015 ranking of "limited enforcement."

Transparency International's (TI) just released "Exporting Corruption - Progress report 2018" offers an independent assessment of states' efforts in fighting offshore bribery through their laws and enforcement systems under the Organisation for Economic Co-operation and Development (OECD) anti-bribery convention. The latest report rates New Zealand as a state with limited enforcement of overseas corruption, and shows little improvement since the previous progress report published in 2015.

"Although domestic corruption in New Zealand appears low, we really need to lift our game in the way we respond to the threat of international corruption," notes Professor John Hopkins, lead New Zealand author, commenting on behalf of Transparency International New Zealand (TINZ).

New Zealand has made progress with increased compliance and disclosure around trust ownership and has strengthened the regime for corporate liability for foreign bribery. However, Professor Hopkins notes, "We are still one of the countries that turn a blind eye to bribery where the person or organisation giving or receiving a bribe is not a New Zealander or a New Zealand owned business. In addition, New Zealand law continues to permit 'facilitation payments', a practice which undermines international good practice and our good name."

The latest report makes seven recommendations for New Zealand's improvement. These are:
1. Remove the facilitation payment exception for the bribery of foreign public officials
2. Improve whistleblower protection
3. Introduce requirements for auditors to disclose suspicions of foreign bribery
4. Establish comprehensive mechanisms to ensure transparency of New Zealand trusts and companies, such as public registers that include information on beneficial ownership
5. Fund and develop active investigation mechanisms
6. Remove the requirement that the Attorney General consent to foreign bribery prosecutions
7. Introduce a positive requirement for commercial organisations to prevent foreign bribery
"New Zealand needs to make sure our international approach lines up with our reputation as of the world's least corrupt countries. The combination of an excellent reputation coupled with lax enforcement of foreign bribery is an extremely dangerous one. Organised crime and corrupt entities may see New Zealand a soft target for legitimising their activities," concludes Professor Hopkins.

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