Foreign Affairs (Consular Loans) Amendment Bill

Foreign Affairs (Consular Loans) Amendment Bill

Government Bill

135—1

Explanatory note

General policy statement

The Bill provides express statutory authority for the Minister of Foreign Affairs to continue the practice of issuing consular loans, consistent with New Zealand’s consular functions, to New Zealand citizens and permanent residents where exceptional circumstances exist.

The Ministry of Foreign Affairs and Trade’s long-standing practice of issuing consular loans did not require express authority under the Public Finance Act 1989 until that Act was amended in 2013.

For over 25 years, the Ministry has assisted New Zealanders in distress overseas by providing them with temporary financial assistance by way of a consular loan when they have no other means of financial assistance and their immediate health and safety is at risk. The Bill is necessary in continuing this long-standing practice, as well as validating the consular loans granted by the Ministry, in good faith, after the Public Finance Act 1989 was amended in 2013 and before the Ministry received delegated authority in 2020 to lend money under the Public Finance Act 1989.

Departmental disclosure statement

The Ministry of Foreign Affairs and Trade is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.

Regulatory impact statement

A regulatory impact statement is not required for this Bill.

Clause by clause analysis

Clause 1 is the Title clause.

Clause 2 is the commencement clause. The Bill comes into force on the day after the date on which it receives the Royal assent.

Clause 3 states that the Bill amends the Foreign Affairs Act 1988.

Clause 4 inserts new section 2AA, which gives effect to transitional, savings, and related provisions set out in new Schedule 1.

Clause 5 inserts new section 12A, which expressly authorises the Minister of Foreign Affairs to lend money to, or for, New Zealand citizens and permanent residents who are outside New Zealand. Before lending the money, the Minister must be satisfied that—

  • the person is in distress; and

  • exceptional circumstances exist; and

  • lending money would provide short-term assistance consistent with New Zealand’s consular functions.

If a loan is not repaid in full, the unpaid amount is a debt to the Crown and court proceedings may be taken to recover the debt.

Clause 6 inserts new Schedule 1 to provide for the retrospective validation of consular loans made in the period that started on 18 July 2013 and ended on 15 June 2020. During that period, the Ministry of Foreign Affairs and Trade did not have delegated authority to lend money under the Public Finance Act 1989 or any other statutory authority to lend money.

Clauses 7 and 8 make minor consequential amendments to section 14 and the existing Schedule.