Nexia BT used the services of the Panama firm Mossack Fonseca to set up New Zealand trusts for Konrad Mizzi and Keith Schembri. Photo: ShutterstockNexia BT used the services of the Panama firm Mossack Fonseca to set up New Zealand trusts for Konrad Mizzi and Keith Schembri. Photo: Shutterstock

The number of foreign trusts in New Zealand, like those set up by Konrad Mizzi and Keith Schembri, plummeted after the introduction of stricter disclosure rules.

The trust Dr Mizzi, the Tourism Minister, and Mr Schembri, the Prime Minister’s chief of staff, set up in New Zealand, were used to shelter their once-secret Panama companies.

Read: Panama firm pulls out of New Zealand after trust controversy

Radio NZ, which, like this paper, is an official partner of the International Consortium of Investigative Journalists (ICIJ), reported that, under the new trust regime, foreign trusts would have to file annual returns.

The information in such returns would include who owned the trusts, what assets were involved and who the beneficiaries were.

According to Radio NZ, New Zealand’s Inland Revenue Department last month received applications to register fewer than 3,000 trusts and another 3,000 said they did not want to be part of the new regime.

There were roughly 11,750 trusts at the end of last year, Radio NZ said.

Under the new regime, New Zealand’s Inland Revenue Department will pass on information about people holding foreign trusts to other countries without being asked.

Dr Mizzi and Mr Schembri broke tax laws by failing to register their trusts with the local tax department. They blamed this oversight on their financial advisers, Nexia BT.

Leaked documents in the Panama Papers show that both government officials opted not to have their trusts audited when they were set up. It was only after the news of their offshore set ups broke that the two men commissioned audits by the New Zealand firm Crowe Howarth.

Dr Mizzi and Mr Schembri say the audits, published some months after their completion, proved that no bank accounts were ever set up for their Panama companies.

Financial experts pointed out in relation to these audits that the secrecy behind Panama companies meant no audit trails were left.

The government’s anti-money laundering agency (FIAU) has questioned Dr Mizzi’s claims he did not sign any bank opening forms and that he did not give power of attorney to Nexia BT to open an account.

Leaked extracts from an FIAU report say Dr Mizzi signed a power of attorney on June 16, 2015, in which he granted absolute discretionary powers to Nexia BT’s Karl Cini and Brian Tonna to carry out any actions necessary with the set-up of the trust structure.

The FIAU said this included, inter alia, the Panamanian company and related bank account, including the authorisation to sign all necessary documentation.

Both Dr Mizzi and Mr Schembri have since closed their Panama companies.

No declarations about the status of their New Zealand trusts have been made.

Questions sent to them some months ago about the matter remain unanswered.

jacob.borg@timesofmalta.com

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