KEY POINTS:
A memo calling New Zealand "a target for terrorist and corporate criminal activity" because of lax Companies Office checks has been sent to the leaders of a global network of 36,000 company administrators.
It has upset the Government, which last night called the Chartered Secretaries New Zealand (CSNZ) memo "extremely alarmist and utterly irresponsible".
CSNZ sent the memo following a Herald story about how Iraqi immigration fraudster Salam Mansoor Abdelabbas Al-Bawi set up a company under a dual identity.
Al-Bawi registered the company that owns his North Shore Fishmonger fish-and-chip shop under the name John Joseph just a fortnight after he was sentenced for immigration fraud committed under the Joseph alias.
CSNZ chief executive Grant Diggle wrote to his international counterparts with concerns over the Companies Office response that it took all registrations at "face value" and was not required to check with other government agencies, confirm an applicant's identity or investigate criminal histories.
"If this is the case, then New Zealand is a haven for terrorists looking to finance their activities and also criminals looking to launder money and commit corporate identity crimes," wrote Mr Diggle.
He said the New Zealand Government was in breach of its international security responsibilities.
Mr Diggle sent the memo to the seven international offices of the Institute of Chartered Secretaries and Administrators - which has 36,000 members in 70 countries - asking them to tell their governments and news media of the breaches.
He also sent the memo to the Financial Action Task Force - an inter-governmental body fighting money laundering and terrorist financing of which New Zealand is a member - and to Australia's Minister for Corporate Law, Nick Sherry.
Mr Diggle told the Herald he sent the memo because New Zealand needed to "protect ourselves from risk". Precautions were required to prevent "any old crook" registering a company.
"Whilst we are small, we have exposed ourselves as a chink in the armour. We don't want to become the Nigeria of the South Pacific - a scammer's paradise."
Commerce Minister Lianne Dalziel said the memo was "extremely alarmist and utterly irresponsible".
She said identity fraud was "always a risk" as the Companies Office registered an average of 35 new companies every hour, had 434,000 companies on the register, and changes to its records happened every 30 seconds.
"Are the Chartered Secretaries actually suggesting that the registrar of companies should trawl through court records to see whether someone who might register a company within a certain period of time has been convicted? It's just a nonsense."
Ms Dalziel said the Companies Office relied on people being honest.
"If people are being dishonest, and it is brought to our attention, we take action". She was awaiting the results of the investigation into Al-Bawi's firm.
PROVOCATIVE
What the memo said:
"New Zealand is a haven for terrorists looking to finance their activities and also criminals looking to launder money and commit corporate identity crimes."
Sender:
Chartered Secretaries New Zealand (CSNZ)
Recipients:
* Institute of Chartered Secretaries and Administrators.
* Financial Action Task Force.
* Minister of Commerce.
* Opposition Commerce spokesman.
* Australia's Minister for Corporate Law.
* News media.
