Cutting the red tape

Regulatory changes.

The government is in the process of reforming and relaxing the AML rules (Anti-Money Laundering).

The aim is to cut the red tape to streamline the process of applying the AML for simple transactions.

The reforms will be implemented in three steps.

• The first is the introduction of two bills to parliament.
• Secondly the focus will be on structural measures to create a more effective and efficient system.
• Lastly, the changes will reflect international standards and use a risk based system.

These measures should reduce wasted time form filling for the sake of being busy when there is little to no risk associated with a transaction.

The changes are intended to be user friendly for small businesses who do not have back-room compliance staff. These changes will still see businesses needing to comply with transactions where there is an AML risk. Large companies have been fined recently due to AML compliance issues so that is unlikely to go away.

Overseas Investments

The government is also reforming the overseas investment laws. NZ’s overseas investment policies are one of the worst in the 38 countries we compare ourselves to. This is due to being the most restrictive country to invest in so companies avoid investment into NZ. The easier it is to invest in a country the easier it is to build capital assets to increase production. If capital is invested into NZ there should also be an increase in wages as more is being produced.

The amendments to the overseas investment rules will see the following principles being applied:

• Retaining the scope of what we currently screen
• Fast-tracking the assessment process with the starting assumption that investment can proceed unless there are risk factors identified
• Flexibility for the government to call-in these investments for detailed scrutiny on a case-by-case basis

We can see the government is trying to make it easier for corporations to come and invest in NZ. By reducing paperwork and uncertainty for companies, they will be more open to investing here

The government hope to see benefits of increased investment and less time filling in paperwork increasing productivity.

Links for more information:

https://www.beehive.govt.nz/release/government-provide-significant-regulatory-relief-business

https://www.beehive.govt.nz/release/overseas-investment-changes-get-new-zealand-bench