The amendments facilitate:
- The reform of the law relating to incorporated business groups to combat money laundering;
- Provision for better internal governance; and
- Online Filing, among other related purposes.
Minister Samb said this is the first time in almost fifty years since the passing of the Bill that amendments will be made to the Act.
He said, “The act has not undergone any review or amendment since its passage nearly fifty years ago. A lot has changed in the intervening years, especially the use of technology to support online electronic registry systems. This ministry through the Investment Promotion Authority (IPA) administers the Act through an electronic online registry system.”
The Minister in his speech, informed Parliament that the IPA will be implementing a major upgrade scheduled for this year, the success of which, will be greatly enhanced by the recent amendments as they provide the IPA with proper authority to manage Incorporated Business Groups within an electronic database.
Minister Samb in his speech clarified that none of the proposed amendments represent a shift in policy or a change in how incorporated business groups are formed or operated in Papua New Guinea.
“All these changes are similar to existing provisions in the Companies Act that relate to using and administering an online registry,” said Minister Samb.
The key changes that will be brought about by the amendments include:
- New definition added to the specifically recognized validity of electronic documents and filing
- The IPA will be given specific authority to rectify the online register in the event of data entry error and use email to deliver notices to people advising, of their upcoming filing requirements
- Requirements of incorporated business groups to notify the registrar whenever a change is made in the committee members. This will allow the registry to provide current and accurate information on the management of each business group. This precisely mirrors the requirements in the companies act. That all companies report changes in directors to the registry.
- Requirements of incorporated business groups to update their postal addresses for service whenever a change is made. And that changes must be reported to the registrar. This will assist the Interval Revenue Commission (IRC) in identifying and bringing in tax evaders to pay their dues and comply with our tax laws.
- Requirement of an incorporate business group to file a more general annual return with the registrar. The purpose of the annual return is to make sure that the information in the registry about the incorporated business group is accurate.
- Finally, during the wounding up of process, an incorporated business group will be required to file with the registrar any court orders that pertains to it ceasing its operation.
Offering arguments in support of the bill, Governor for Northern Province, Gary Juffa encouraged Minister Samb to work with the IPA to restructure the organization.
“This department needs to refocus its efforts so that it is not just an organization that is encouraging investment and then registering companies and then leaving them alone to do as they please in this country. What needs to happen is a restructure of that organization so that it must have an enforcement and a prosecution function as well,” the governor said.
Governor Juffa mentioned instances where foreign-owned companies register as Papua New Guinean companies and operate as that, attracting the benefits of operating as a Papua New Guinean Company.
“But they avoid certain taxes, they avoid certain liabilities, certain permits and licenses that are required of them as foreign owned companies and they operate at will and wind,” the governor added. “They register a company to operate as a particular business and then they go to another part of this country and they operate in a totally different business, and these type of activities have been happening for the last how many decades.”
He expressed frustration about IPA’s lack of screening mechanisms saying, “The IPA does absolutely nothing about this. Its screening mechanisms are also atrocious. Anybody from anywhere in this world, whether they are transnational criminals or scam artists or conman, they flock into Papua New Guinea and are able to register a company and operate anytime, anywhere, without scrutiny.”
Meantime, Minister Samb announced that he will be bringing to parliament, amendments to the IPA Act 1992, and the Association Incorporation Act. The Minister said the NEC recently approved the reserve list.