Chapter 5
Design of civil pecuniary penalties – guiding principles

Effective enforcement of regulatory regimes

5.34The need for fairness in civil pecuniary penalty regimes needs to be balanced against their purpose. Each Act, and associated civil pecuniary penalty regime, has been designed with the effectiveness of the respective regulatory scheme in mind. For example, the objective of securities law is “to facilitate capital market activity, in order to help businesses grow and to provide individuals with opportunities to develop their personal wealth.”235  Key to these outcomes is the need for investors to have confidence that obligations on advisers and issuers will be enforced. The Unsolicited Electronic Messages Act 2007 was introduced to combat unsolicited commercial email, or spam. Spam was considered to be becoming a significant social and economic issue which was a “drain on … business and personal productivity” and which “[impeded] the effective use of email and other communication technologies for personal and business communications” so threatening growth and acceptance of legitimate e-commerce.236  The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 targets the method by which criminals disguise the illegal origins of their wealth and protect and enjoy their assets. Its objectives include to detect and deter money laundering and the financing of terrorism, contribute to public confidence in the financial system, and maintain and enhance New Zealand’s international reputation.237

5.35Procedural restrictions which favour individual rights may have a commensurate limiting impact on enforcement bodies’ ability to effectively enforce the Act and meet these public interest objectives. It may follow that the interest in fairness should bow to some extent to regulatory imperatives in the design of civil pecuniary penalties. However, fairness must be compromised no more than necessary to achieve those aims. One question to be considered in this chapter is whether, at present, we have got the balance between regulatory expediency and fairness right.

235Cabinet Paper “Securities Law Reform” (February 2011) at [19], [20] <>
236Hon David Cunliffe MP “Unsolicited Electronic Messages Bill–First Reading” (13 December 2005) 628 NZPD 1043.
237The Act was introduced to increase New Zealand’s compliance with the international standards set out in the Financial Action Task Force (FATF) Recommendations: see Financial Markets Authority, Reserve Bank and Department of Internal Affairs Anti-Money Laundering and Countering Financing of Terrorism: Supervisory Framework <>