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Overseas Investment Bill (Consistent) (Sections 5, 14, 19(1), 25(c)) [2004] NZBORARp 35 (1 November 2004)
Last Updated: 21 March 2021
OVERSEAS INVESTMENT BILL
1 November 2004
Attorney-General
LEGAL ADVICE
CONSISTENCY WITH THE NEW ZEALAND BILL OF RIGHTS ACT 1990:
OVERSEAS INVESTMENT BILL
- We
have considered whether the Overseas Investment Bill (the "Bill") (PCO 6016/11)
is consistent with the New Zealand Bill of Rights
Act 1990 (the "Bill of Rights
Act"). We understand that this Bill is to be considered by the Cabinet
Legislation Committee at its
meeting on 4 November 2004. We have been asked to
consider this Bill under some urgency.
- We
have not yet received the version of the Bill that will be considered by the
Cabinet Legislation Committee. However, we understand
from Treasury officials
that any changes to the Bill are likely to be minor and are unlikely to give
rise to Bill of Rights Act issues.
If any subsequent amendments do give rise to
a Bill of Rights Act issue we will advise you
immediately.[1]
- The
Bill sets out a regime for overseas investments in sensitive New Zealand assets,
which replaces and modifies aspects of the existing
regime for overseas
investment in New Zealand. The Bill:
- defines
"sensitive New Zealand assets";
- sets out a
regime under which overseas persons wishing to invest in sensitive New Zealand
assets can seek consent from the Ministers
of Finance, Land Information, or
Fisheries, depending on the nature of the asset in question. The consent regime
includes criteria
for consent, the procedure for obtaining consent, imposing and
modifying conditions on consent, and revoking consent;
- sets out the
regulator’s monitoring role and powers, including the power to require
provision of information and statutory declarations
as to compliance;
- sets out an
enforcement regime, including powers of entry, search and seizure;
- sets out five
offences, which include maximum penalties of $100,000, or $300,000, or $300,000
or 12 months imprisonment;
- gives the High
Court the power to order the disposal of property and payment of civil penalties
in certain circumstances;
- provides
administrative provisions for implementing the Act, including regulation-making
powers and transitional provisions.
- We
have concluded that the Bill appears to be consistent with the Bill of Rights
Act. In reaching this conclusion, we have considered
the following
issues:
Right to be free from discrimination on the basis of
national origin
- Section
19(1) of the Bill of Rights Act provides that everyone has the right to freedom
from discrimination on the grounds of discrimination
in the Human Rights Act
1993. The prohibited grounds of discrimination include ethnic or national
origin, which includes nationality
or citizenship. Therefore, it is necessary to
consider whether the Bill discriminates on the basis of national origin.
- The
Bill appears to raise an issue under section 19(1) by establishing a regime for
approving investment by overseas persons in sensitive
New Zealand assets. The
Bill treats foreign-owned or controlled corporations differently from locally
owned corporations, and treats
non-citizens who are not ordinarily resident in
New Zealand differently from citizens and residents of New Zealand.
- The
Bill’s policy objective is to control ownership of sensitive New Zealand
assets by persons who are based offshore and whose
connection with New Zealand
is tenuous. The Bill seeks to achieve this objective by imposing a consent
regime under which the impact
of proposed investments can be given proper
consideration, which seems to bear a rational and proportionate connection to
the policy
objective. It does not draw distinctions between New Zealand citizens
and foreign nationals who are residents of New Zealand. For
these reasons, to
the extent an issue is raised under section 19(1), we have concluded that the
Bill appears to be justifiable in
terms of section 5 of the Bill of Rights
Act.
Compelled expression
- The
Bill contains a number of provisions which require people, particularly
applicants or consent-holders, to provide information
to the regulator. For
instance:
- clause 24(3)
permits the regulator to require additional information from applicants for the
purposes of processing consent applications;
- clause 39
permits the regulator to require consent holders to provide information for
monitoring their compliance with consent conditions;
- clause 40
permits the regulator to require information for statistical or monitoring
purposes from any person with information relevant
to overseas investments in
sensitive New Zealand assets;
- clause 41
permits the regulator to require consent holders to provide a statutory
declaration relating to their compliance with any
conditions imposed on the
consent. Clause 41(3) provides that such a declaration is not admissible in
evidence in any proceeding
under the Bill except for proceedings under clause 46
(offence of making false or misleading statements).
- These
provisions raise issues under section 14 of the Bill of Rights Act. Section 14
protects freedom of expression, which includes
the right to say nothing. We have
considered whether these provisions can be justified in terms of section 5 of
the Bill of Rights
Act.
- The
objective of these provisions is to promote the effective operation of the Bill,
by ensuring the regulator can obtain sufficient
information to carry out its
statutory functions. The provisions also provide an incentive to comply with the
Bill by facilitating
effective monitoring of compliance with its requirements.
- We
consider that there is a rational and proportionate connection between the
provisions listed above and their objective. The extent
of the compelled
expression is limited to the purposes of the regime established by the Bill.
Clause 41(3) protects consent holders
from the possibility that their statutory
declarations might be used against them in civil or criminal proceedings under
the Bill,
except that they may be prosecuted for making a false statutory
declaration.
Enforcement powers – entry, search and
seizure
- Clauses
55-59 empower the regulator to apply for and exercise a search warrant. These
clauses set out the powers conferred by the
search warrant, requirements when
executing a search warrant, and disposal of things seized under the warrant.
- We
have concluded that these provisions are consistent with section 21, which
provides that everyone has the right to be secure against
unreasonable search or
seizure. Key factors in reaching this conclusion include the process of prior
authorisation for the search
warrant and limitations on the manner in which it
may be executed, such as the requirement of entry at reasonable
times.
Offences
- The
Bill contains five offences:
- an indictable
offence of giving effect to an overseas investment transaction without consent
(clause 42);
- an indictable
offence of defeating, evading or circumventing the operation of the Bill (clause
43);
- an indictable
offence of resisting, obstructing or deceiving a person exercising powers or
functions under the Bill (clause 44);
- a summary
offence of failing to comply with notice, requirement or condition without
lawful excuse (clause 45);
- a summary
offence of making a false or misleading statement (clause 46).
- We
have concluded that these offences do not raise any issues under the Bill of
Rights Act. Except for clause 45, all of the offences
include a mental element,
so they give effect to the presumption of innocence (section 25(c), Bill of
Rights Act). The maximum penalties
for the indictable offences are imprisonment
for 12 months (for individuals) or a $300,000 fine (for individuals and bodies
corporate).
The maximum penalty under clause 46 is a $300,000 fine.
- Clause
45 appears to be a reverse onus offence, as it provides that it is an offence to
fail to comply with a notice, requirement
or condition without lawful excuse.
Due to section 67(8) of the Summary Proceedings Act 1957, the onus is on the
defendant to demonstrate
that he or she had a lawful excuse.
- We
have concluded that this formulation seems reasonable and proportionate in the
circumstances. Clause 45 is effectively an offence
of failing to comply with the
requirements of a licensing regime, and we accept that the defendant is most
likely to possess the
information relevant to the reasons for non-compliance.
Furthermore, the level of the penalty (maximum fine of $100,000) is intended
to
reflect the nature of the investments covered by the Bill.
Conclusion
- For
the reasons given above, we have concluded that the Bill appears to be
consistent with the Bill of Rights Act.
- In
accordance with your instructions, we attach a copy of this opinion for referral
to the Minister of Justice. We also attach a copy
for referral to the Minister
of Finance, if you
approve.
Allison Bennett Principal Legal Adviser Office of Legal Counsel
|
Sarah Kerkin Senior Adviser Bill of Rights/Human Rights Team
|
Cc
|
Minister of Justice Minister of Finance
|
In addition to the general disclaimer for all documents on this website,
please note the following: This advice was prepared to assist
the
Attorney-General to determine whether a report should be made to Parliament
under s 7 of the New Zealand Bill of Rights Act 1990
in relation to the Overseas
Investment Bill. It should not be used or acted upon for any other purpose. The
advice does no more than
assess whether the Bill complies with the minimum
guarantees contained in the New Zealand Bill of Rights Act. The release of this
advice should not be taken to indicate that the Attorney-General agrees with all
aspects of it, nor does its release constitute a
general waiver of legal
professional privilege in respect of this or any other matter. Whilst care has
been taken to ensure that
this document is an accurate reproduction of the
advice provided to the Attorney-General, neither the Ministry of Justice nor the
Crown Law Office accepts any liability for any errors or omissions.
[1] The Bill as
introduced contained some minor changes from the version on which this advice
was based, and several of the clauses were
renumbered. One new clause required
the provision of information and documents to the regulator (clause 42 in the
Bill as introduced).
As this new provision, and other minor changes, appeared to
be consistent with the Bill of Rights Act, they did not necessitate any
additional advice to the Attorney-General.
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