By Gareth Vaughan
Departing Serious Fraud Office (SFO) boss Adam Feeley, whose tenure has been dominated by prosecuting people involved with failed finance companies such as South Canterbury Finance, Bridgecorp and Capital + Merchant, says two key areas his successor ought to keep a close eye on are trans-national fraud and financial crime during the rebuild of earthquake hit Christchurch.
Speaking to interest.co.nz in a Double Shot interview Feeley also revealed the SFO is working with global anti-corruption organisation Transparency International on educating New Zealand companies operating overseas on the laws that apply to them.
Feeley said there were two potential areas of fraud his as yet un-named successor ought to be especially concerned about.
"The first is foreign corrupt practices, foreign corruption. Everyone else in the world in law enforcement that I talk to says it's a growing concern," Feeley said.
"Trans-national crime's a growing concern generally, but specifically in financial crime. New Zealand won't be immune to it. So I think that's something we really need to focus on."
The other area is Christchurch, where the Reserve Bank estimates total claims from the Christchurch earthquake will reach NZ$30 billion, leading Feeley to conclude it's a reasonable assumption there will be financial crime in Christchurch "because fraud looks for money and there's a lot of money in Christchurch."
Meanwhile, Feeley said the SFO was working with Transparency International developing an education programme for companies operating overseas advising them on what laws will apply to them. He said where United States or British law was relevant, companies don't have to be in those jurisdictions for it to apply to them.
The SFO was saying; "Here are some of the things you need to do in case one of your employees or one of your agents gets involved with a corrupt practice, because it could have a devastating effect on those companies."
Secondly, if the SFO hears about allegations of overseas bribery and/or corruption involving New Zealand companies it wants to be "far more active" in responding to them.
"The starting point is this. New Zealand like every other signatory to the UN Convention against Corruption has obligations to have laws dealing with foreign corrupt practices and have operational responses to it. To date New Zealand has never investigated, let alone prosecuted, any cases of foreign corruption, in other words companies operating within New Zealand or New Zealand companies operating overseas," Feeley said, adding there were two ways you could respond to that.
"One is to say 'we haven't looked hard enough.' The other is to say 'it's because there isn't any problem'," added Feeley.
"I don't believe New Zealand's unique. I think by and large New Zealand is a very honest country. But I think we have corrupt practices, albeit on probably a lesser scale to some other countries."
Therefore the SFO both wants to educate New Zealand companies about how to deal with the problem, and if it hears about anything then its want to actively respond.
"It's one thing to say there isn't a problem if you don't go looking for it. It's quite another to look for it, to look for it hard and then say 'you know what? We've looked and we still can't find it.' That's where we need to get to as opposed to simply denying there's a problem," said Feeley.
Interest.co.nz reported in May that although New Zealand signed the United Nations Convention Against Corruption in December 2003, our government is still yet to ratify it leaving New Zealand in the company of the likes of Myanmar, Syria, and Sudan.
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