Brokering (Weapons and Related Items) Controls Bill

I move, That the Brokering (Weapons and Related Items) Controls Bill be now read a second time.

Now, thanks go to the Foreign Affairs, Defence and Trade Committee for its careful consideration of the bill. The committee has recommended that the bill proceed with a number of amendments. The fact that it has come through the select committee probably is pure serendipity, despite the talent of the chairman.

Could I just say, the bill establishes a regime to regulate the brokering of arms and military equipment from one foreign country to another by New Zealanders and New Zealand - based entities. Brokering involves negotiating, arranging, or facilitating the international transfer of arms. Establishing appropriate oversight of brokering transactions will prevent New Zealanders and New Zealand entities from brokering arms and military equipment where there is a risk that these items will end up in the wrong hands or in undesirable locations, such as conflict zones or countries subject to United Nations arms embargoes.

This bill supports New Zealand’s commitments under the Arms Trade Treaty, which regulates the international trade in conventional arms. Under the treaty, New Zealand is required to regulate the brokering of conventional arms that takes place within our jurisdiction. The bill will also support implementation of New Zealand’s commitments under the four international export control regimes in which New Zealand participates, which recognise brokering controls as a valuable counter-proliferation tool.

New Zealand currently has a voluntary registration scheme for New Zealand - based brokers. This bill will put in place comprehensive legislative controls on brokering. The bill requires New Zealanders, New Zealand ordinary residents, and New Zealand - based entities wishing to broker international transfer of arms, military equipment, or civilian goods that may have a military end use to, first, register with the Secretary of Foreign Affairs and Trade, and, second, obtain a permit for each brokering activity. The secretary may grant permits if satisfied that the brokering activity is consistent with New Zealand’s international obligations and would not prejudice the security, defence, or international relations of New Zealand. The bill enables appropriate conditions to be placed on a broker’s registration or permit.

Given the cross-border nature of brokering, the regime will have extra territorial effect and apply to New Zealanders and New Zealand entities operating abroad. The bill creates offences for breaching the requirements under the bill, including carrying out brokering activity without being registered as a broker and having a permit, breaching the conditions of the registration or permit, failing to keep or produce records or answer questions, and providing false or misleading information in connection with their registration or permit.

Given the extra-territorial nature of the brokering regime, the Attorney-General’s consent is required for any prosecution under the bill. This requirement provides a safeguard to ensure that only appropriate cases proceed to prosecution. The bill also enables civil penalties such as formal warnings, enforceable undertakings, and injunctions to be imposed in appropriate cases by the Attorney-General.

Turning now to the committee’s work, the committee received nine submissions on the bill. Most submitters supported the bill but recommended that a number of amendments be made—in particular, to provide greater clarity on the jurisdictional scope of the bill and the operation of the offence provisions. The committee has recommended a number of changes to the bill which, we consider, appropriately respond to submitters’ concerns. The majority of amendments are intended to provide greater clarity on the operation of relevant provisions and are technical in nature. A few amendments enhance the enforcement measures in the bill.

Now to highlight the main amendments proposed: first, the committee has proposed a new clause to outline the jurisdictional scope of the regime in response to submitters’ concern that the bill does not expressly specify who is subject to the regime, given the cross-border nature of brokering and the extraterritorial application of the bill. A new clause would make it more clear that the regime applies to brokering activity that is carried out in New Zealand and also by New Zealand citizens, people ordinarily resident in New Zealand, and entities incorporated or registered under New Zealand law regardless of their location. Second, the committee has recommended that the Secretary of Foreign Affairs and Trade publish the Gazette notice specifying the parts of the New Zealand strategic goods list that are relevant to the brokering regime on to the Ministry of Foreign Affairs and Trade website.

Third, changes are recommended to further clarify that the offence for carrying out brokering activity without being registered or having a permit does not reverse the usual burden of proof to a defendant and does not require a defendant to disprove an element of the offence. The structural and drafting changes recommended by the committee help to make the elements of the offence more clear and the statutory exceptions more easily identifiable as exceptions to the general requirement to register and hold a permit for the brokering activity.

Fourth, changes are recommended to some of the exceptions to the requirement to register and hold a permit for the brokering activity. These include clarifying that before a person can rely on the exception for brokering dual-use goods that person must take reasonable steps to ensure that the end use of those goods is not for a prohibited use as defined in the bill. Prohibited use for dual-use goods is use towards a weapons of mass destruction programme or any other “military end-use”—narrowing the exception for employees who conduct brokering on behalf of their employer to situations where an employee has reasonable grounds to believe that their employer is already complying with the brokering legislation in New Zealand or an equivalent overseas regime. This change strikes the right balance between protecting an innocent employee where they are acting in good faith and providing for accountability in the appropriate circumstances.

Fifth, the committee recommends a new requirement for registered brokers to submit an annual report detailing brokerage-transacted activities to the Secretary of Foreign Affairs and Trade as a standard condition of their registration. This will enhance enforcement of the brokering regime while appropriately balancing the privacy and commercial interests of registered brokers.

Sixth, the period for which brokers are required to keep prescribed records of their brokering activities has been increased from five to seven years after the end of the calendar year to which the records relate. This will be consistent with requirements concerning tax records, and it will enhance the enforcement of the regime.

Last, the committee recommends removing the application of the bill “to a person who has been found in New Zealand and has not been extradited.” This bill does not require foreign nationals with no physical presence in or link to New Zealand to be registered under the New Zealand brokering regime. This amendment clarifies that such individuals who carry out brokering activity elsewhere and subsequently come to New Zealand would not be liable for conducting brokering activities without previously being registered with the New Zealand Government or having a New Zealand permit.

And last, but not least—

💬 Hon Scott Simpson: Hallelujah!

Hallelujah is right. I apologise to my colleagues for this rather boring delivery of a very important matter. It’s not really our want to have to read out a thing like this, but seeing as it is about a very serious issue in which fundamental human rights and legal rights are affected, it’s rather important that we get the record straight at least once.

In conclusion, this bill will put in place appropriate controls to prevent any New Zealanders and New Zealand - based entities from being involved in illicit arms brokering and will deter any illicit arms brokers from shifting their activities to New Zealand. We’ve seen the devastating and destabilising effect weapons and technology can have when they end up in the wrong hands. These impact individual security and freedom, inhibit development, and affect national, regional, and international security. New Zealand is a strong supporter of the Arms Trade Treaty and other disarmament, arms-control, and counter-proliferation efforts. This bill enables New Zealand to play its part in the international framework to address those concerns.

Could I just say again, thank you very much to the committee for their very responsible work and for fixing up some of the defects, which were pointed out by my colleague Ron Mark in the first reading.

The Brokering (Weapons and Related Items) Controls Bill is, thereby and therefore, commended to the House. Thank you very much.

Debate interrupted.