The Overseas Investment Office (OIO) has released a report from an independent reviewer who has examined the OIO's procedures for assessing the "good character" requirement under the Overseas Investment Act (the
One of the criteria that must be satisfied before consent can be given to an application for overseas investment in New Zealand is that the relevant overseas person is, or (if that person is not an individual) all the individuals with control of the relevant overseas person are, of "good character" as required under section 16(1)(c) of the Act.
After it was revealed that the Argentinian owners who obtained consent under the Act to acquire a large farm in Taranaki had previously been found guilty of releasing toxic pollution into a river in Buenos Aires, the OIO engaged P.D. McKenzie CNZM QC to independently review the way the OIO assessed the "good character" requirement.
The report released by the OIO on 24 June 2016 confirms that the standard practice of the OIO is to conduct internet searches on the individuals who are considered to have control of the relevant overseas person acquiring the investment as well as obtaining a statutory declaration as to "good character". If these searches reveal any relevant factors then further inquiries are made.
The report does not identify any major flaws in the way the OIO is currently undertaking its assessment of "good character", and makes some minor recommendations, including a recommendation to ensure any relevant information found during internet searches on good character are advised to the Ministers. The recommendations are being implemented immediately.
Bell Gully's view
While the report is unlikely to significantly affect the way the OIO is currently assessing "good character", in our view, the assessment of "good character" as part of the application assessment process has already become, and will continue to be, subject to greater scrutiny.
The report suggests, but does not go as far as recommending, that the OIO should consider requiring police checks, although it acknowledges that this requirement is not without difficulties.
It is important that all matters potentially relevant to "good character" are disclosed to the OIO as part of the application assessment process. Failing to disclose any adverse information risks the application being delayed while the matter is investigated. There could be more serious implications if the matter is disclosed after consent is granted, particularly if the OIO determines that a person has made a false statement in a statutory declaration (imprisonment for a term not exceeding three years).
A copy of the report released by the OIO can be viewed
here with appendices
This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.