Hon Clayton Cosgrove
Associate Minister of Justice

20 October 2006 Media Statement

Regulations relaxed for secondhand dealers

Associate Justice Minister Clayton Cosgrove today announced fine-tuning of regulations under the Secondhand Dealers and Pawnbrokers Act 2004. The changes will have little or no effect on people who buy or sell secondhand goods from or to secondhand dealers.

The Secondhand Dealers and Pawnbrokers Act 2004 replaced the Secondhand Dealers Act 1963 and the Pawnbrokers Act 1908. The new Act introduced measures such as five-year rather than lifetime licences for dealers and pawnbrokers, and requiring secondhand dealers to sight identification and record contact details for anyone selling them goods.

Mr Cosgrove said the Act was achieving its aim of making it harder for criminals to dispose of stolen goods through secondhand dealers and pawnbrokers, as well as making it easier for the police to recover stolen goods and solve property crimes. However he said some adjustments to the regulations to reduce licensing and compliance costs are justified.

“It became clear in the first year of the Act’s operation that there was little advantage in licensing some types of secondhand dealers, and that some fine-tuning of the regulations could bring down compliance costs without compromising the effectiveness of the Act,” Mr Cosgrove said.

"For instance, police have advised that the trading-in of secondhand whiteware for new goods is not a risk area for disposing of stolen goods. Therefore those who only deal in secondhand whiteware as trade-ins for new goods will no longer require a secondhand dealers licence."

The new regulations will also waive the requirement for secondhand dealers to verify the identity of the retailer when purchasing new or used goods from a retail outlet, as this has not been found to assist the Police in tracing the original owner.

Where secondhand dealers receive items for free, they will no longer be required to keep a record of the transaction or to verify the identity of the donor. This is because stolen goods are very unlikely to be disposed of by giving them away free to secondhand dealers. This exemption will reduce compliance costs for recycling operations and encourage recycling activities.

People who obtained secondhand dealers licences or certificates but no longer need them under the new requirements will be able to get their money back through the Secondhand Dealers and Pawnbrokers Licensing Authority.

The new regulations were approved by Cabinet on 16 October and will take effect on 1 December 2006.

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QUESTIONS AND ANSWERS

What will change, and why?
The changes will exempt some people dealing in secondhand goods from being licensed and will exempt secondhand dealers from verifying the identities of people they receive secondhand goods from in some circumstances.
A period of consultation was established after the Act came into force (1 April 2005). The proposed exemptions are the result of feedback on how the Act was working.

Who will no longer have to be licensed?
Licensing will no longer be required for:
- Those who only deal in secondhand whiteware as trade-ins for new goods. This recognises that it is unlikely criminals would continually trade in stolen secondhand whiteware due to its bulky size and the fact it would arouse suspicion.
- Licensed firearms dealers when dealing with secondhand firearms, as they are already required to be licensed under the Arms Act.

Why are other secondhand dealers and pawnbrokers not being exempted?
The purpose of this Act is to prevent crime. Criminals may try to dispose of stolen goods through secondhand dealers. To deter this, and to enable the Police to track the stolen property, secondhand dealers have been required to be licensed since 1963, and are required to keep records of their transactions.
The Ministry of Justice, in consultation with Police, have not identified any other areas in the secondhand market that are not a risk for disposing of stolen goods.

In what situations will dealers not have to verify identities of people they are receiving goods from?
Secondhand dealers will no longer have to verify the identities of people they receive secondhand goods from when they are receiving them from retail outlets or for free.

How do people that no longer require licences go about getting their money refunded?
The cost of an individual license is $350. A license for a company with one director is also $350, with each additional director costing $150. The cost of a certificate is $150, which is refundable also. Refunds are available through:
The Licensing Authority of Secondhand Dealers and Pawnbrokers
Tribunals Unit
P.O. Box 5027, Wellington 6145
Tel: (04) 918 8476 / Fax: (04) 918 8369 / Email: shdlicensing[at]justice.govt.nz

ENDS

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