Foreigners flout rules on investment says insider

Overseas investors are "turning a blind eye" to rules governing foreign investment, says a former Overseas Investment Commission contractor.

Mark Dunlop, who worked at the commission between January and August last year on compliance of overseas investors with investment rules, slammed the present regime in a submission to Parliament's finance and expenditure committee.

He said yesterday that he would not reveal any specific examples to the committee when he formally outlines his views tomorrow, and declined to comment further.

The submission, released by the committee with all other submissions on the Overseas Investment Bill, gives no examples of overseas investors breaching the rules.
But Mr Dunlop's criticism lends weight to concerns of groups such as the Green Party and Campaign Against Foreign Control of Aotearoa.

His submission said the bill's purpose was to acknowledge that it was a privilege for overseas people to own or control sensitive assets, but in "far too many cases" that was being abused by investors and their New Zealand agents and advisers.

"The fact is that there are clear indications of major compliance issues with our FDI [foreign direct investment] regime as a whole ... Investors and their advisers are turning a blind eye to the regulatory regime despite understanding the requirements."

Given the public interest at stake, he found both the evidence of significant non-compliance and the lack of information on the actual extent of non-compliance "very disturbing".

There were no instruments, either in place or proposed under the bill, to resolve the wider compliance issues and to capture the information needed to verify the extent of the problem.

Commission chief executive Stephen Dawe declined to comment saying it was inappropriate to talk about the content of a submission to a select committee.