Cheques and Balances
What The Panama Papers Exposed About NZ Trusts Ft. Matt Harris | Episode 498
16 Jun 2026
Transcript generated automatically by AI and may contain errors.
Chapter 1: How did the Panama Papers change New Zealand trust law?
We are back in your life and today, how the Panama Papers changed New Zealand trust forever in 2016. One of the biggest financial leaks in history occurred. We've got my best mate, Michael Vincent. We've got my casual acquaintance, Matthew Harris. Boys, what are we doing talking about 2016?
What were you doing in 2016, Matt? What were you up to?
I had left the Inlay Revenue and started this lovely establishment. Tax returns in the basement? Is that what you're doing? Yeah, pretty much. Property tax returns for everyone. How much were you charging? I think originally we were charging about $250 for an individual. So that'll tell you inflation, but also weren't charging enough. The first financial plans I did was $190.
But in 2016, I was a financial advisor at Westpac. driving around in my 1996 Honda Civic. Great car. From one branch to the next when everybody went to their branches. Yeah. And I was helping all the retirees out.
Nice, nice, nice. One of the other headlines of that year, guys, was actually, how did this leak? It was through, the Panama Papers leaked through like a wider area
That was actually via a law firm leak, but I think actually... Mossack Fonseca? Mossack Fonseca. But let's go back a little bit, right, because you've got to zoom out a little bit. So I've been in tax for a very long time, and this actually wasn't the first major leak. So the first major leak was the Lichtenstein papers, which is super interesting.
So long story short, there was a guy who worked in the Lichtenstein bank, and he... I can't remember exactly whether he was pissed off with his employer or had just sought opportunity, but he stole a whole lot of files. And he went and sold them to the German tax authorities. So this is the first thing you need to understand.
Tax authorities worldwide will buy information that they can use to find people who are dodging their taxes. Crazy. So he got paid a reasonable amount of money, I think, at that stage. So that was back in 2008. I think he got something like $5 million US. Woo! for that data. For being a snitch. How do you get privacy laws and that kind of thing if you're an employee? How does that work?
Well, I think you leave the country permanently and you never show your face again anywhere in Europe.
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Chapter 2: What were the main issues revealed by the Panama Papers?
Yeah. It's a lot. It is a lot. Yeah. Right about that time, I seem to remember there was newspaper and some of the watchers might remember this. There was newspaper articles where New Zealand Foreign Trust were caught running guns. Really? Yeah, yeah. There was like some plane that got caught at an airport and it was running unregistered arms and it got traced back to New Zealand Foreign Trust.
Yeah, I remember when I was in the UK, I think I've told it on the podcast before, but I'll say it again. I went to, I worked in financial crime, odd place for me to work. And I was at a live podcast and it was on Russian shell companies in the UK. And then at the end of it, they're like, what do you want the next podcast to be?
And it was like shell companies in the British Virgin Islands or New Zealand Trust. And I was like, wait, what? Like, why would we do this on New Zealand Trust? Apparently globally known as a really easy way to launder money.
yeah it is and they um before we get into the mechanics of that regime because i think it will be interesting for our listeners um when you have tax jurisdictions they're either white listed which means like a really great place so that'd be most of the the powers of the world and um oecd countries new zealand included then you have gray list countries so gray list countries are basically a bit gray yeah includes um
You know, places like the British Virgin Islands, Cayman Islands, places which are known as low tax jurisdictions. And then you have blacklist countries, which is like no-no's. There's only three interesting enough. So there's North Korea, no surprises there. Iran, no surprises. And this third one's a bit weird. So Myanmar. Oh, yeah. Burma, former Burma.
I have no idea why that's a blacklist country. I actually don't know much about that country at all other than its name was changed after World War II. But anyway, so New Zealand is a whitelist country and this is where the foreign trust and the use is actually really, really interesting. So, Michael, it's not just like your average Joe that's on this list that got caught up in this.
What kind of people got caught up? We got Donald Trump. We got David Cameron. We got Vladimir Putin, Emma Watson, Stanley Kubrick, Simon Cowell, and like the one that's personally let me down, Jackie Chan. Like very sad to see him involved in that sort of stuff.
Emma Watson, I thought she was a good one. Doesn't that show you that the structures are far more popular and wide-reaching than you think? So probably a good time to break down the kind of things that these are. So these are like Shell Corporations, which is effectively a company that is set up in somewhere like the British Virgin Islands or the Cayman Islands or even the Cook Islands coast.
Ireland? Do you get them in Ireland with no tax? So Ireland has a low tax jurisdiction, but there's not a tax haven. Yeah. But somewhere like Guernsey, I think, which is off the British coast. What's the difference between a low tax jurisdiction and a tax haven?
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Chapter 3: What is the significance of Mossack Fonseca in the Panama Papers scandal?
Yeah. So they can be legitimate. It's just that in this case, they definitely were not. Yeah. Kind of like Pitbull worldwide. Well, Mr. Worldwide, he probably had one too, to be honest. Yeah. So Matt, you talked a little bit about what's changed since 2016. So these trusts are still there.
Talk to us a little bit more about kind of the landscape now and kind of what people should be thinking about. Yeah, so I think it's important to also note that if we go back to 2016, when the Panama Papers came out, at that stage, New Zealand had no AML requirements. You did not need a new number to... do anything really. So if I went and bought a property, I didn't have to give an IOD number.
If I went and opened a bank account, I didn't have to give an IOD number. And basically a pretty low level of financial monitoring. So that's like the background of it. And to give you a really good example, James, forget foreign trust, James could be sitting anywhere in the world and go and set up a company in New Zealand in about 10 minutes and he'd be away.
And he could do whatever the hell he wanted with that company. Watch me. So that's the background of this. Obviously these scandals happened and New Zealand was not painted in a good light. I don't think any country likes to see that these structures were used to run guns and money launder.
So after the John Sherwin review, these disclosure requirements came in and the first step was there was a transitional period for all foreign trusts to register. And I think it was about two years, about two balanced states to do that and I imagine that during that period a hell of a lot of them disappeared to other jurisdictions.
But it's just because New Zealand's got disclosure requirements doesn't mean that other jurisdictions do so that all those grey list countries for example won't have. We're off to North Korea baby. Right boys. You won't come back and your money won't come back. Yeah.
But yeah, a lot of those trusts that were really not used very well would have disappeared into those grey list countries and then the rest of them got registered. Now what happens is that... and they're able to get the disclosures every year, they don't automatically do anything with them. So they don't grab them all, divide them up by settlers.
We've got British settlers, we've got American settlers, and then send it all to those tax jurisdictions. It doesn't work like that, but they have to have that information available so that they can meet their obligations if requested. What are the most common reasons you're seeing clients using trust today? Yeah, so the New Zealand trust regime is still a really good one.
So your foreign trust, which is a trust set up by a non-resident, we commonly see those just for overseas investors. So Australians are the most common investors we get in New Zealand. They're buying residential properties, they're buying commercial properties. Okay.
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