Mossack Fonseca's man in New Zealand denies any wrongdoing

Roger Thompson (Bentleys)

Former revenue minister Peter Dunne questions if he was properly briefed by IRD on foreign trusts.

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Should people on the Panama Papers database be named?

No, it's stolen information
42%
Only those proved to have broken the law
34%
Yes, everyone – they've got nothing to fear if they've got nothing to hide
24%
Total votes: 411

The man behind Mossack Fonseca's registered New Zealand office – Bentleys Chartered Accountants – says New Zealand's role in the Panama Papers has been "grossly exaggerated."

Bentleys director Roger Thompson also says, "Looking at the data, it seems that a relatively small number of trusts or companies have been established in New Zealand that are related to Mossack Fonseca. In fact, New Zealand does not feature in the 10 top jurisdictions. See the chart labelled "The 10 most popular tax havens in the Panama Papers."

He also says, "We comply with all New Zealand laws including anti-money laundering laws." His company vets clients and has co-operated with a "small number" of requests from Inland Revenue. 

"I don't see New Zealand as a tax haven. I would describe it as a high-quality jurisdiction for trusts with a benign tax system in certain circumstances," he says

"I think the assumption that all New Zealand foreign trusts are being used for illegitimate purposes is unfounded and based largely on ignorance. Due to the information-gathering powers of the IRD, I would expect that those looking to use trusts for tax evasion or other illegitimate purposes would choose alternative jurisdictions with secrecy laws."

The Bentleys director says although described in articles today as a former IRD official, "I worked for Inland Revenue for a relatively short period after graduating from university over 30 years ago."

Mr Thompson's comments came in written responses to questions from RNZ as part of a combined investigation by RNZ and TVNZ reporters, plus Nicky Hager.

Stories on TVNZ and RNZ do not allege any laws were broken by Bentleys. They land no hard punches but do say Mossack Fonseca actively promoted New Zealand as a tax haven and that New Zealand was at the heart of a "Panama money-go-round."

Former Revenue Minister Peter Dunne says the latest Panama Papers information raises potentially serious concerns and, once analysed in more depth, could mean the scope of John Shewan's independent inquiry needs to be widened. (Read more of Mr Dunne's comments in Blind eye or eye off the ball? Dunne says IRD never briefed him on foreign trust 'explosion' while he was Revenue Minister).

IRD team on standby, PM says
On Saturday, after it was revealed a controversial Mexican construction tycoon apparently has $US100 million in three New Zealand-based trusts, plus allegations by the Panama Papers source that Prime Minister John Key has been "silent" about tax avoidance activity involving the Cook Islands, Mr Key again denied New Zealand was a tax haven.

On Sunday, however, he did add that Inland Revenue would chase down any leads in the leaked Panama Papers data after it's made publicly searchable on Tuesday.

"If there's a New Zealand individual who is identified that's come out of the Panama Papers release who hasn't paid their fair share of tax, they should expect a knock on the door," Mr Key said.


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49 Comments & Questions

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Why is the NBR purely regurgitating news about this saga and not doing any investigative work themselves

Or don't NBR have any investigative journo's left - what about Chalkie?
Coverage to date is very lame considering

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Chuckle - why an earth do you think the NBR would want to turn over any stones in this sordid saga?

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Hi guys, NBR has run coverage sharply critical of John Key on the foreign trust issue, criticism of the government's current policy and, yes, some from Rob Hosking with his opinion that some allegations have been over-egged. Currently, the ICIJ is only making the Panama Papers available to selected news organisations. NBR is not one of the favoured few. Nevertheless, we've had several in-depth articles, including:

http://www.nbr.co.nz/article/hunter’s-corner-new-zealand-global-parade...

http://www.nbr.co.nz/article/panama-director-linked-brazil-scandal-pops-...

http://www.nbr.co.nz/article/some-expert-advice-shewan-review-th-p-187436

CK

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Thanks Chris

Whilst you are single handedly trying your best to keep this live - you are the NBR Technology Editor.
Maybe some of your other lazy colleagues could man up and do some work?

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The articles linked to above are by a variety of NBR reporters.

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Very easy to be critical sitting behind a fake name.. Why wont the people on the left troll using their actual names? Rather than being these key board warriors?

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"I think the assumption that all New Zealand foreign trusts are being used for illegitimate purposes is unfounded and based largely on ignorance."

I think the assumption that all New Zealand foreign trusts are legitimate is also ignorant. There is a middle ground somewhere - the issue is whether the risk to NZ reputation is worth $24m of fees.

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Key failed to show this morning on RNZ. It's clearly getting too hot for him!
Mossack Fonseca are only one of hundreds if not thousands of firms that offer services to the super-rich to hide their wealth and avoid their obligations. Tip of an iceberg and its about to melt.

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Well, Guyon doesn't let him get away with non-answers, as most of the journalists do. The lack of softball questions on RNZ suggests it wouldn't be surprising to see Key steering clear of them.

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Glad you acknowledge it's their wealth. Which is a good starting point to keep in mind when various taxation jurisdictions start making claims on something which is created. Wealth, be it large or small, doesn't exist intrinsically

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You can kinda understand why Key is reluctant to take a strong moral stand on this. I mean, he's an ex-Wall Street banker, after all. These same banks who bundled up their sub-prime mortgages into CDOs, hocked these off to unwary investors, as gilt-edged investments, then promptly shorted them by creating further financial derivatives by way of synthetic varieties; knowing the values would collapse.
You would have to think that our prime minister has a high level of tolerance for financial chicanery.

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Yes I cant believe how this foreign trust problem is all john keys fault. previous governments could have looked into this but john key must have been lobbying from his position in a bank.. As everyone who works for a bank is corrupt.. Any one on the right is corrupt..

Lets keep targeting john key personally because it has helped the left in the polls considerably since he has come to power.

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You're right. it's all John Key's fault. It was even John Key's fault when Michael Cullen, the then Labour Party Minister of Finance, brought in the current regimen and gave a speech at some length about why these Foreign Trusts were a good idea in the first place. And it was also John Key's fault when the Lange Labour government first brought them in. It was also John Key's fault that Helen Clerk, when she was Prime Minister, did nothing about them as well.

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Indeed, and 7 or 8 years is far too little time to fix anything in New Zealand, that's why it's always best to blame Labour for everything!

...err...but elect National again, and this time they'll do something. Promise!

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While the foreign trust issue may be over-egged, there needs to be a very in-depth look and focussed discussion in NZ on our massive reliance on domestic trusts to minimise, avoid and dodge paying the fair amount on taxes. Why are we concentrating on the mouse that just now scurried out from under the oven when there has been a massive white elephant lumbering around in the room for some time now?

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Can you please be specific about which taxes are being "dodged" by the use of trusts and how exactly this is occurring?

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Not so much a white elephant as a fleck of dandruff on its back. Trusts are 'look through' for tax.

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Did you hear the shredders working overtime when you called Bentleys?
Nicky Hager and the NZ Police can advise on hard drive destruction

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When did Hager last have a smear test?

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Alan your blind faith in the Government regardless of any guilt is admirable but dumb
It all comes down to right and wrong

You and Lindsay Fergusson would support and defend the Prime minister if he was an axe murderer.
That sums up how blinkered you are

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You are absolutely right there Scribe. Mind you I am not sure 'blinkered' is right, more like blinded.....

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Your personal crusade against one man is admirable but dumb. I love how little old New Zealand has to include itself it worldly news when it may be negative to tarnish NZ's reputation, in itself tarnishing NZ's reputation.. Yet hundreds of other investigative journalists from around the world are yet to say anything about new zealand

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For some, the ends justify ANY means...

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Yep, that is Hager's by-line.

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Anyone for whom that's the main takeaway from a leak exposing nefarious practices of their preferred party should question their ethical stance.

If your preferred approach is to vilify whistleblowers or reporters rather than address wrongdoing of those exposed there's a job waiting for you in the USA.

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Another collection of (largely) inane comments attacking John Key with no facts or justification to support them. Sadly for you anti-Key bloggers and "commentators" there is nothing in the stolen or hacked "Panama Papers" worth getting excited about. Take a chill pill and lie down.

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Best you move your electronic piggy bank quickly mate and then grab a cheap flight and follow it!

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Right on the button!!!

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Chris Trotter on Radio Live this morning labelled this 'neh'. The papers released on NZ relate to 0.056% of the total 11 million papers. Those who say NZ reputation is hurt are deluded, 90% of the worlds population don't even know NZ exists let alone where we are on a global map. Of the 10% that do know of NZ many think its part of Australia, so they will in turn think Australia is bad, now that brings a smile to my face!
These papers only help Hager, Gower and those who feel its their time to be on stage. Gower is almost orgasmic with delight when he speaks about this. Hager would be too if it was possible for him to have human feelings.
Get over yourselves people surely the money and time being spent on this would be better spent on hip operations child poverty etc.

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This guy has done absolutely nothing wrong, and it's a measure of our low quality media that his name gets dragged through the mud with little understanding.

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When did Alan Wilkinson last have a check for ethics and an anti -smear test?
Nicky Hager is a cog not a driver. To imply NZ's corruption perception reputation internationally has not been tarnished is the height of naievete or propagandist speak. Trust me (sic) IT HAS!

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I don't trust you or Hager who has laboured for a year to find a proxy to land a hit on Key with and has come up only with this damp squid which his select tamed and primed media buddies were handed and have failed to ignite. Hyperventilating screeches from the Lefties amuse no one but themselves. The revelation that a NZ tax professional is creating and administering trusts for foreign clients is neither news nor an issue so long as it is legal and ethical. I see no evidence to the contrary. Releasing correspondence and details of 200,000 private individuals would appear to be deeply unethical but obviously of no concern to the loony Left.

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Yes, offshore trusts can be used by nasty people to launder their ill-gotten gains, but also by ordinary people trying to protect their assets from confiscation by corrupt and brutal governments. Think the Swiss banks in 1930s Europe - a haven for the money of both the persecutors and their victims. To ban them is like banning motor cars because they are used by bank robbers.

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Great comment. So true, and Labour yet again have absolutely no idea. They see a car driving past and they feel compelled to bark at it.

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Thank you Richard Doehring. Amongst the panic and persuasion yours is a voice of wisdom and reason. The problem is that the rot has proliferated and now threatens the core of the apple.

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Very good Richard 10/10. Unforunately you are dealing here with people who flatly refuse to allow the truth to get in the way of a good story.
20 years ago I despised Trusts and my fav. view on them was, "never trust a trust". Since then and thanks in part to this saga, I now see that there is legitimate use for them.
Your last sentence, "To ban them is like banning motor cars because they are used by bank robbers." That says it all really. Thank You.

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The issue with foreign residents with NZ trusts is only of relevance in respect to NZs reputation.
Of more relevance is the predominance of trusts of NZ residents. In most cases they will be to hide assets from the taxman, creditors, divorcing spouse or Social Welfare (where benefits are means tested). Interesting to ask the large number of MPs with Trusts why they set them up.

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Trusts have been around since the common law existed, serving legitimate purposes (asset protection, minor protection, etc). They do not hide assets from the taxman, as the trust tax rate is 33%, higher than personal rates.

The only problem with trusts is perception - stupid people think they are bad for reasons known only to other stupid people. Unfortunately NZ has a very large number of the aforesaid, as this comments thread illustrates.

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Including asking former Labour ministers in Clark's govt - wouldn't hurt to find out at the same time how many Labour and even old Alliance MP's have/ had their kids at private schools - off-topic I know - but all a little bit interesting don't you think

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Jax no other country gives a fig about NZ which is a safe haven but not a tax haven

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New Zealand is the envy of many countries and in this respect we do our best to contain endemic corruption. When it comes to imported corruption - even the smell of it - we as a nation rely heavily on the protective mettle of our democratically elected leader.

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Just as well then Graham. I am not anti trusts in the least.
I am very much for deserved placed on International Perception Indexes though.
Especially when those who provide the index and Transparency International with the 'perceptions' have such integrity.
Kerplop.
Oops!
Was that the sound of N.Z. dropping to 6th 7th 8th 9th 10th?
Or further?
Perception is everything. Domestically Internationally. I know, am in and out of the perception creation game myself

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Quite so Benviv and we are so fortunate to have the present set of leaders

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Some comments spoke of trusts at 33% etc. Those are domestic trusts. Fully covered by NZ tax law. So, NZ is no tax haven for kiwis. But for foreigners it is possible to set up an offshore trust, which NZ doesn't tax, and not to disclose their details to our authorities. If some of them are doing so to evade taxes in their own countries, IRD won't know.

Nor can we share information with other tax authorities (except Australia, as for some reason they weren't keen for us to harbour their tax dodgers) because we can't pass on information we don't hold.

Others spoke of NZ as a secrecy haven. That's the key issues for other criminals, for whom the kiwi offshore trust is an almost perfect getaway vehicle. Others said NBR hasn't covered it, but it has done so, well, alongside several others, and there are feature articles with full explanations on Interest.co.nz and in the latest Listener. (Disclosure: two of which I authored)

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When you think about trusts and the ethics of them, you just have to think, "What is my wife going to say if I get pinged under the Health and Safety Act?"
Then life gets pretty complicated.

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"Nor can we share information with other tax authorities"

What are these TIEA's ( Tax information exchange agreements) listed on the NZ IRD website ?
http://taxpolicy.ird.govt.nz/tax-treaties

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Taxing on global income is an important part of tax governance. No jurisdiction can impose its will on another without force so its more efficient and peaceful to reach an agreement with other jurisdictions on what information will be shared and with what degree of efficiency to allow the respective jurisdictions to go about their business.

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Totally agree anonymous. I was responding to Ron Pol who was suggesting that there can be no information sharing ( except for Australia) but these agreements, show that to be false.

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... we have a double-taxation agreement with at least one South American country, Chile ... http://www.scoop.co.nz/stories/PA1605/S00145/panama-papers-revelations-r... ... Press Release: United Future NZ Party: ... “Our network of Double Tax Agreements and Tax Information Exchange Agreements ... does not include any agreements with South American states ...

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