US post for investment body chief

Steve Dawe says he will be assessing countries' legal and regulatory frameworks. Picture / Mark Mitchell

The Overseas Investment Commission's head is taking up a new position with the International Monetary Fund in the United States to fight international money laundering and the financing of terrorism.

On the eve of the commission's overhaul, its chief executive, Steve Dawe, of Wellington, has declined to move with other staff to Land Information NZ.

Instead, he will join the fund in Washington DC in September, aiming to stop criminals moving money through the world's financial system.

Last month, Parliament passed the Overseas Investment Act under which the commission will move out of the Reserve Bank to Land Information NZ.

The act comes into effect around September 1. The commission will be renamed the Overseas Investment Office and required to increase its monitoring of consents for approvals of foreign investments.

But Dawe will not head the new structure.

"I will begin working for the fund on anti-money laundering and countering the financing of terrorism," Dawe said of his new American position.

"My prime focus will be the Asia-Pacific region.

"The work involves assessing countries' legal and regulatory frameworks to see whether they meet international standards, providing and delivering technical assistance to those countries to help them improve their frameworks and contributing to policy reviews of the international frameworks."

Dawe joined the Reserve Bank in 1985 and the commission in December 1994. He was involved in writing the Reserve Bank Act and until June 2003 had a dual role as head of the commission and the Reserve Bank's legal services manager.

He represented this country at international meetings on monetary control issues and administered the financial aspects of New Zealand's United Nations sanctions against terrorist organisations.

"These things became an ever-growing zone post 9/11," he said.

He also chaired an international committee for the Financial Action Task Force reviewing international rules on anti-money laundering and countering the financing of terrorism. "So now I am moving back to a patch that I have done a lot of international work on."

The commission has come in for criticism over its approval of foreign investment. One of its most outspoken opponents is the Campaign Against Foreign Ownership of Aotearoa in Christchurch.

The organisation believes the independence of most countries is being eroded because "most of the world's economy is now owned and controlled by a relatively small number of huge transnational corporations".

It claims foreign direct investment via ownership of companies increased from $9.7 billion in 1989 to $67 billion by last September, a 600 per cent increase.

The organisation claims the commission has been the Government's rubber-stamp to allow more foreign ownership.

What the new Overseas Investment Act will do after September 1:

* Aim to strike a balance between protecting land assets while allowing for beneficial overseas investment.

* Land Information NZ will take over the role and responsibilities of the Overseas Investment Commission, which will be renamed.

* Overseas buyers will have to surrender marginal strips on sensitive land adjacent to, or including, rivers, lakes and the foreshore without compensation.

* Make it harder for overseas buyers to get land of "special heritage or environmental value".

* Make it easier for them to buy non-land assets such as company shares and buildings.

* Raise the threshold for screening non-land transactions from $50 million to $100 million.

* All purchases of foreshore and seabed land will be screened, regardless of the size of the land parcel.

 

www.oic.govt.nz

www.fatf-gafi.org

www.cafca.org.nz