Arms Amendment Regulations 2020

2020/309

Coat of Arms of New Zealand

Arms Amendment Regulations 2020

Patsy Reddy, Governor-General

Order in Council

At Wellington this 14th day of December 2020

Present:
The Right Hon Jacinda Ardern presiding in Council

These regulations are made under section 74D and clause 19 of Schedule 1 of the Arms Act 1983

(a)

on the advice and with the consent of the Executive Council; and

(b)

on the recommendation of the Minister of Police.

Regulations

1 Title

These regulations are the Arms Amendment Regulations 2020.

2 Commencement

These regulations come into force on 1 February 2021.

3 Principal regulations

These regulations amend the Arms Regulations 1992 (the principal regulations).

4 New regulation 28ZA and cross-heading inserted (Compensation scheme and related provisions for purposes of Part 2 of Schedule 1 of Arms Act 1983)

After regulation 28Z, insert:

Compensation for specified items and specified parts

28ZA Compensation scheme and related provisions for purposes of Part 2 of Schedule 1 of Arms Act 1983

The compensation and related provisions in Schedule 2 apply according to their terms for the purposes of Part 2 of Schedule 1 of the Arms Act 1983.

5 New Schedule 2 inserted

After the Schedule, insert as Schedule 2 the schedule set out in the Schedule of these regulations.

Schedule New Schedule 2 inserted

r 5

Schedule 2 Compensation and related provisions for purposes of Part 2 of Schedule 1 of Arms Act 1983

r 28ZA

Contents

1Interpretation
2Limits on compensation
3Compensation schedules to be issued by Commissioner
4Information required to be set out in compensation schedules
5Indicators for determining condition of specified item or specified part to be published
6Certain provisions do not apply to valuers
7Temporary amnesty extended for individuals and licensed dealers possessing specified items or specified parts
8Conditions of temporary amnesty under Act and extended amnesty under clause 7
9Compensation for specified item or specified part
10Amount of compensation for specified item or specified part during amnesty period
11Compensation for large quantities of specified parts or pistol carbine conversion kits
12Compensation for unique specified item or specified part
13Licensed dealers required to mitigate losses
14Compensation following return of specified item or specified part to supplier by licensed dealer
15Licensed dealers entitled to claim compensation for specified items or parts
16Amount of compensation payable for prohibited items before end of amnesty period
17Application of clauses 18 to 21
18Manufacturers required to mitigate losses
19Compensation following return of materials to supplier by manufacturer
20Manufacturers entitled to claim compensation for specified items and specified parts
21Amount of compensation for specified items and specified parts
22No other compensation payable

Part 1 Preliminary and general provisions

1 Interpretation

In this schedule, unless the context otherwise requires,—

Act means the Arms Act 1983

amnesty period has the meaning given to it in clause 8 of Schedule 1 of the Act

compensation schedule means a compensation schedule issued by the Commissioner under clause 3

Schedule 2 means this schedule

specified item means—

(a)

a semi-automatic firearm that—

(i)

is capable of firing only 0.22 calibre or lower rimfire cartridges; and

(ii)

has a magazine, whether or not detachable or otherwise externally fed, that is capable of holding no more than 10 cartridges commensurate with the firearm’s chamber size; and

(iii)

has a lower receiver that is able to be attached to a centrefire upper receiver so that the resulting firearm is able to function:

(b)

a semi-automatic pistol that is not—

(i)

a semi-automatic pistol held by a person referred to in section 2A(3) of the Act; or

(ii)

a small semi-automatic pistol:

(c)

a centrefire pump-action rifle that is capable of being used with a detachable magazine:

(d)

a centrefire pump-action rifle that has 1 or more non-detachable magazines (tubular or otherwise) capable of holding more than 10 cartridges commensurate with that firearm’s chamber size:

(e)

a pistol carbine conversion kit (as defined in section 2(1) of the Act)

specified part

(a)

means a part of a specified item that cannot lawfully be used on a non-prohibited firearm; but

(b)

does not include a part that could be used on a prohibited item to which any of regulations 28H to 28WA applied before 25 June 2020, unless—

(i)

the part relates specifically to a firearm that is a specified item (as defined in this clause); and

(ii)

that firearm was lawfully possessed before 25 June 2020 and is delivered or otherwise surrendered to a member of the Police in accordance with clause 18 of Schedule 1 of the Act and with Schedule 2.

2 Limits on compensation

The amount of compensation payable in respect of a specified item or specified part under Schedule 2 that is set out in a compensation schedule, or determined by the Commissioner under Schedule 2, does not in any case include compensation for any of the following:

(a)

any economic loss:

(b)

any consequential loss:

(c)

any loss for business interruption:

(d)

any loss attributable to intrinsic or sentimental value.

3 Compensation schedules to be issued by Commissioner

(1)

The Commissioner must, as soon as is reasonably practicable, issue 1 or more compensation schedules setting out the amounts of compensation payable in respect of specified items and specified parts delivered or surrendered to a member of the Police, or forfeited to the Crown.

(2)

The Commissioner may, at any time before the close of 1 May 2022, do any of the following:

(a)

amend a schedule by inserting, deleting, or replacing the description of any item or part in a schedule:

(b)

issue a replacement schedule:

(c)

issue 1 or more supplementary schedules setting out the amounts of compensation payable in respect of items or parts not included in any previously issued schedule.

(3)

The Commissioner must ensure that every compensation schedule issued, and every amendment to a schedule, is—

(a)

notified in the Gazette; and

(b)

available online at http://www.police.govt.nz

4 Information required to be set out in compensation schedules

A compensation schedule must set out for each specified item (described by brand, type, or model) and each specified part—

(a)

the base price for the item or part, being the price that the Commissioner considers reflects the value of the item or part immediately before 12 November 2019, having taken into account—

(i)

retailers’ prices, and online prices, for the item or part; and

(ii)

advice on the valuation of the item or part from industry specialists; and

(b)

the amount of compensation payable in respect of the item or part depending on its condition as determined by a member of the Police and calculated as a percentage of the base price of the item, as follows:

(i)

for a specified item—

(A)

in new or near-new condition, 95% of the base price:

(B)

in used condition, 70% of the base price:

(C)

in poor condition, 25% of the base price:

(ii)

for a specified part—

(A)

in new or used condition, 70% of the base price:

(B)

in poor condition, 25% of the base price.

5 Indicators for determining condition of specified item or specified part to be published

The Commissioner must publish online at http://www.police.govt.nz the indicators used to determine for the purposes of clause 4—

(a)

whether the condition of a specified item is—

(i)

new or near-new; or

(ii)

used; or

(iii)

poor; and

(b)

whether the condition of a specified part is—

(i)

new or used; or

(ii)

poor.

6 Certain provisions do not apply to valuers

(1)

The following sections of the Act do not apply to an approved valuer (as defined in clause 12(8)) in respect of a specified item or specified part that is delivered to the valuer for valuation:

(a)

section 44AA (unlawful sale or supply of pistol carbine conversion kit), to the extent that, after valuing a pistol carbine conversion kit, the valuer returns the pistol carbine conversion kit to the person from whom it was received:

(b)

section 44A (offence to sell or supply prohibited firearm or prohibited magazine), to the extent that, after valuing a prohibited firearm or prohibited magazine, the valuer returns the prohibited firearm or prohibited magazine to the person from whom it was received:

(c)

section 44B (offence to sell or supply prohibited part), to the extent that the valuer returns the prohibited part to the person from whom it was received:

(d)

section 50AA (unlawful possession of pistol carbine conversion kit):

(e)

section 50A (unlawful possession of prohibited firearm):

(f)

section 50B (unlawful possession of prohibited magazine):

(g)

section 50C (unlawful possession of prohibited part).

(2)

The protection conferred on a valuer by subclause (1) expires at the end of the amnesty period, unless subclause (3) applies.

(3)

If the valuer returns the specified item or specified part to the person from whom it was received after the end of the amnesty period, the protection conferred on the valuer by subclause (1) expires on the earlier of the following:

(a)

the date on which that item or part is returned:

(b)

1 August 2022.

Part 2 Amnesty and compensation provisions

Subpart 1—Temporary amnesty

7 Temporary amnesty extended for individuals and licensed dealers possessing specified items or specified parts

(1)

In addition to the provisions in clause 17 of Schedule 1 of the Act, the following persons do not commit an offence under section 50AA (unlawful possession of pistol carbine conversion kit), 50A (unlawful possession of prohibited firearm), 50B (unlawful possession of prohibited magazine), or 50C (unlawful possession of prohibited part) of the Act for the continued possession of a specified item or specified part:

(a)

a person who, within 60 days after the commencement of this Part or earlier, applies as an individual or a licensed dealer for either of the following and does not, before the end of the amnesty period, receive notification from a member of the Police that their application has been approved or declined:

(i)

an endorsement to be made on their firearms licence or dealer licence under section 30B of the Act permitting them to possess the item or part in their capacity as an exempt person:

(ii)

a permit issued under section 35A or 35AAA of the Act to possess the item or part:

(b)

a person who, within 60 days after the commencement of this Part or earlier, applies as an individual or a licensed dealer for an endorsement or a permit referred to in paragraph (a) and, before the end of the amnesty period, receives notification from a member of the Police that their application has been declined:

(c)

a person to whom the following apply:

(i)

either,—

(A)

within 90 days after the commencement of this Part, they apply as an individual for compensation under Schedule 2 in respect of the item or part; or

(B)

within 60 days after the commencement of this Part, they apply as a licensed dealer for compensation under Schedule 2 in respect of the item or part; and

(ii)

a member of the Police agrees in writing to collect that item or part.

(2)

The amnesty granted by subclause (1)(a) continues to apply to the person—

(a)

until the person receives notification that their application has been approved; or

(b)

until the person receives notification that their application has been declined, and for a further 30 days starting on the date of that notification if—

(i)

the person applies for compensation within that 30-day period; and

(ii)

at the same time the person delivers the item or part to the Police, unless, at the time of the application, the Police agree in writing to collect the item or part at a specified time.

(3)

The amnesty granted by subclause (1)(b) continues to apply to the person for a further 30 days starting on the day after the date of that notification if—

(a)

the person applies for compensation within that 30-day period and the end of that 30-day period falls outside the amnesty period; and

(b)

at the same time the person delivers the item or part to the Police, unless, at the time of application, the Police agree in writing to collect the item or part at a specified time.

(4)

The amnesty granted by subclause (1)(c) and the amnesty continued by subclause (2)(b) or (3)(b) continues to apply to the person until the earlier of the following:

(a)

the time the Police collect their item or part:

(b)

12 months after the date of their application for compensation.

8 Conditions of temporary amnesty under Act and extended amnesty under clause 7

(1)

The temporary amnesty granted by clause 17(2) of Schedule 1 of the Act and the extended amnesty under clause 7 of Schedule 2 are subject to the following conditions:

(a)

the person in possession of the specified item or part must not use the item or part during the amnesty period; and

(b)

the person must at all times during the amnesty period keep the item or part in secure storage on their premises.

(2)

Subclause (1)(b) does not apply if the person is transporting the specified item or specified part for the purpose of—

(a)

delivering the item or part from secure storage to—

(i)

a member of the Police; or

(ii)

an approved valuer (as defined in clause 12(8)) for valuation; or

(b)

exporting the item or part with a permit from the Ministry of Foreign Affairs and Trade or a certificate from the Ministry for Culture and Heritage.

Subpart 2—Compensation for individuals

9 Compensation for specified item or specified part

(1)

This clause applies to a person if any of the following circumstances apply:

(a)

the person lawfully possessed a specified item or specified part on 24 June 2020:

(b)

the person arranged to lawfully import a specified item or specified part on or before 24 June 2020:

(c)

the circumstances referred to in either or both of paragraphs (a) and (b) apply, and the person,—

(i)

within 60 days after the date of commencement of this Part or earlier, applies for—

(A)

an endorsement under section 30B of the Act to possess a prohibited firearm; or

(B)

a permit under section 35A of the Act to possess a prohibited firearm; or

(C)

a permit under section 35AAA of the Act to possess a pistol carbine conversion kit; and

(ii)

is notified by the Police that their application has been declined and, within 30 days after that the date of that notification, applies for compensation under subclause (2).

(2)

A person referred to in subclause (1)(a) may apply for compensation from the Crown in respect of the specified item or specified part that the person lawfully possessed if—

(a)

the person applies for compensation within 90 days after the commencement of this Part, and—

(i)

the item or part is delivered to a member of the Police; or

(ii)

the Police agree in writing to collect the item or part at a specified time; and

(b)

the person does not apply within 60 days after the commencement of this Part or earlier for an endorsement or a permit in accordance with subclause (1)(c)(i) and obtain an endorsement or a permit.

(3)

A person referred to in subclause (1)(b) may apply for compensation from the Crown in respect of the specified item or specified part if the person applies for compensation within 90 days after the commencement of this Part, and—

(a)

the item or part is being, or has been, treated as prohibited goods under section 98 of the Customs and Excise Act 2018:

(b)

the item or part is, or has been, delivered to a member of the Police in accordance with an authorisation given by the chief executive of the New Zealand Customs Service under section 85(1)(b) of the Customs and Excise Act 2018:

(c)

the item or part is forfeited to the Crown under section 176(1)(a) of the Customs and Excise Act 2018:

(d)

the person does not apply within 60 days after the commencement of this Part or earlier for an endorsement or a permit in accordance with subclause (1)(c)(i) and obtain an endorsement or a permit.

(4)

The following provisions apply in relation to an application for compensation under this clause:

(a)

the applicant must make the application within 90 days after the commencement of this Part unless—

(i)

subclause (1)(c)(ii) applies and the 30-day period after notification falls outside that 90-day period; or

(ii)

a later period is agreed by the Commissioner on the ground that exceptional circumstances justify the making of the application after the 90-day period:

(b)

the applicant must submit the application to the Commissioner in a form prescribed by the Commissioner:

(c)

the applicant must, at the same time as submitting the application, deliver the item or part to the Police, unless the Police agree in writing to collect the item or part at a specified time:

(d)

the applicant must provide the Police, if requested, with proof of 1 or more of the following:

(i)

that the applicant lawfully possessed the item or part on 24 June 2020 or arranged to lawfully import it before 24 June 2020:

(ii)

the purchase price and evidence of the transaction by which the applicant acquired the item or part.

(5)

In this clause, person does not include a licensed dealer or manufacturer who is eligible to apply for compensation under subpart 3.

(6)

This clause is subject to clause 12 if a person is applying for compensation for a unique specified item or specified part, and, in that case, the 90-day application period in this clause does not apply.

10 Amount of compensation for specified item or specified part during amnesty period

(1)

The amount of compensation payable in respect of a specified item or specified part that is referred to in clause 9(1) is—

(a)

the amount in respect of the item or part that is set out in a compensation schedule issued by the Commissioner; or

(b)

the amount for the item or part that is determined by the Commissioner under Schedule 2.

(2)

Subclause (1) is subject to clause 12.

(3)

The Commissioner must make arrangements for the compensation for a specified item or specified part to be paid to the bank account nominated by the owner of the item or part.

11 Compensation for large quantities of specified parts or pistol carbine conversion kits

(1)

This clause applies if a person applies for compensation under clause 9 for a quantity of specified parts or pistol carbine conversion kits that exceeds the quantity of parts or kits that the Commissioner considers appropriate for the reasonable personal use of the person.

(2)

In determining the quantity of specified parts or pistol carbine conversion kits that is appropriate for the reasonable personal use of a person, the Commissioner may consider—

(a)

the number and type of specified items that are prohibited firearms owned by the person in respect of which the parts may be used:

(b)

the number and type of pistols owned by the person in respect of which the kits may be used:

(c)

the age of the parts or kits:

(d)

the quantity of the parts or kits typically possessed by the holder of a firearms licence who owns a firearm of the same kind as, or of a kind similar to, that owned by the person in respect of which the parts or kits may be used:

(e)

the number of kits owned by the person in respect of which parts of kits may be used.

(3)

The amount of compensation payable to a person in respect of the quantity of specified parts or pistol carbine conversion kits is determined as follows:

(a)

for the quantity the Commissioner considers appropriate for the reasonable personal use of the person, the amount of compensation payable is the sum of the amount of compensation payable in respect of each part or kit, being—

(i)

the amount for the part or kit set out in a compensation schedule; or

(ii)

the amount for the part or kit determined by the Commissioner under clause 12; and

(b)

for the remaining quantity, clause 9(4)(d)(ii) applies (applicant to provide evidence) and the amount of compensation payable is the sum of the amount of compensation payable in respect of each part or kit, being the lowest of the following:

(i)

the amount for the part or kit set out in a compensation schedule:

(ii)

the amount for the part or kit determined by the Commissioner under clause 12:

(iii)

the price for which the part or kit was purchased by the person, based on evidence provided in accordance with clause 9(4)(d)(ii).

12 Compensation for unique specified item or specified part

(1)

A person who applies for compensation under clause 9 or 11 may apply to the Commissioner in writing to have the amount of compensation for a specified item or specified part determined by the Commissioner instead of in accordance with a compensation schedule.

(2)

An application under this clause must be made—

(a)

within 60 days starting on the day after the date of commencement of this Part; or

(b)

if it is an application following a declined application for an endorsement, within 30 days starting on the day after the date of the notification declining an endorsement; or

(c)

within any later period agreed by the Commissioner on the ground that exceptional circumstances justify the making of the application after the end of the 60-day period.

(3)

A person may apply under subclause (1) only if—

(a)

the item or part is not listed in a compensation schedule and it—

(i)

is rare or has other distinguishing characteristics that significantly affect its value; or

(ii)

is otherwise unique, and is substantially different from any other item or part listed in a compensation schedule; or

(b)

the item or part is listed in a compensation schedule, but has been modified in such a manner and to such an extent that the applicant has reasonable grounds to believe that the value of the item or part is at least 30% above the base price for that item or part listed in the schedule.

(4)

An application for compensation in respect of an item or a part is made by submitting to the Commissioner—

(a)

a completed application in the form prescribed by the Commissioner; and

(b)

evidence of the value of the item or part; and

(c)

if available, evidence of the amount for which the person purchased the item or part; and

(d)

if the application is made in reliance on subclause (3)(a)(i), evidence of the item’s or part’s rarity or other distinguishing characteristics that significantly affect its value and, in respect of any distinguishing characteristics, how those characteristics significantly affect its value; and

(e)

if the application is made in reliance on subclause (3)(a)(ii), an explanation of why the item or part is considered unique and substantially different from any other specified item or specified part listed in a compensation schedule; and

(f)

if the application is made in reliance on subclause (3)(b), evidence of the cost of the modifications, and details of the grounds on which the person believes the value of the item or part is at least 30% above the base price for the item or part listed in a compensation schedule; and

(g)

an application fee of $120 (excluding goods and services tax).

(5)

After receiving an application, the Commissioner may require the applicant to—

(a)

obtain a valuation of the specified item or specified part from an approved valuer chosen by the applicant; and

(b)

pay the cost of the valuation; and

(c)

submit the specified item or specified part to a member of the Police for inspection; and

(d)

provide any further evidence or explanation relevant to the application, as requested by the Police, within 10 days of that requirement or any further period agreed by the Commissioner.

(6)

The Commissioner must determine the amount of compensation and give notice under subclause (7) as soon as is reasonably practicable after considering—

(a)

the application; and

(b)

all information accompanying that application under subclause (4); and

(c)

any valuation obtained under subclause (5); and

(d)

any other information or advice that is available to the Commissioner or that the Commissioner has obtained relating to the value of the specified item or specified part (including the value of the item or part, if any, specified in a compensation schedule).

(7)

The Commissioner must, subject to subclause (6),—

(a)

determine the amount of compensation payable in respect of the item or part that is—

(i)

the amount for the item or part listed in a compensation schedule; or

(ii)

any other amount; and

(b)

give the applicant written notice of the determination.

(8)

In this clause, approved valuer means a valuer who is approved by the Commissioner and whose name is included in the list of approved valuers held by the Police.

Subpart 3—Provisions relating to licensed dealers and manufacturers

Licensed dealers

13 Licensed dealers required to mitigate losses

(1)

Before applying for compensation under clause 14 or 15, a licensed dealer must take all reasonable steps in the circumstances to mitigate their losses sustained in respect of specified items or specified parts (for example, cancelling orders before shipment or returning items to suppliers).

(2)

When applying for compensation under clause 14 or 15, a licensed dealer must provide evidence of the reasonable steps the dealer has taken under subclause (1).

14 Compensation following return of specified item or specified part to supplier by licensed dealer

(1)

This clause applies to a licensed dealer who—

(a)

lawfully purchased or ordered a specified item or specified part on or before 24 June 2020; and

(b)

returned the item or part to the supplier; and

(c)

received a refund for the item or part of an amount less than the amount that the dealer paid for the item or part.

(2)

The dealer may apply to the Crown for a payment in respect of—

(a)

the difference between the amount the dealer paid for the item or part and the amount of the refund received; and

(b)

any external costs reasonably incurred that are directly attributable to, or that may be apportioned to, the purchase or return of the item or part, including domestic and international freight costs, but excluding any interest on loans relating to the purchase of the item or part.

(3)

A licensed dealer applies for a payment under this clause by submitting to the Commissioner a completed application in a form prescribed by the Commissioner—

(a)

within 60 days after the date of commencement of this Part; or

(b)

if the dealer does not submit an application within that 60-day period and clause 15(1)(b) applies, within 30 days after being notified by the Police that the dealer’s application for an endorsement or a permit has been declined.

(4)

The amount payable to a licensed dealer under this clause is determined by the Commissioner.

(5)

The Commissioner must make arrangements for a payment to a licensed dealer under this clause to be paid to the bank account nominated by the dealer.

15 Licensed dealers entitled to claim compensation for specified items or parts

(1)

This clause applies to a licensed dealer if either of the following circumstances apply:

(a)

the dealer lawfully purchased, ordered, or received a specified item or specified part on or before 24 June 2020:

(b)

the circumstances referred to in paragraph (a) apply to the dealer, and the dealer,—

(i)

within 60 days after the date of commencement of this Part or earlier, applies for—

(A)

an endorsement under section 30B of the Act to possess a prohibited firearm; or

(B)

a permit under section 35A of the Act to possess a prohibited firearm; or

(C)

a permit under section 35AAA of the Act to possess a pistol carbine conversion kit; and

(ii)

is notified by the Police that the application has been declined.

(2)

The licensed dealer may apply for compensation from the Crown in respect of the specified item or specified part if, at the date of the dealer’s application,—

(a)

the item or part is held by the dealer and there is an agreement in writing with a member of the Police that the item or part will be either delivered to the Police at a specified time or collected by the Police at a specified time:

(b)

the item or part is subject to the control of the New Zealand Customs Service:

(c)

the item or part has been forfeited to the Crown under section 176(1)(a) of the Customs and Excise Act 2018:

(d)

the item or part has been delivered by the New Zealand Customs Service to the Police under section 85(1)(b) of the Customs and Excise Act 2018.

(3)

A licensed dealer applies for compensation under this clause by submitting to the Commissioner a completed application in a form approved by the Commissioner—

(a)

within 60 days starting on the day after the date of commencement of this Part; or

(b)

any later period after that 60-day period agreed by the Commissioner on the ground that exceptional circumstances justify the making of the application after the 60-day period; or

(c)

if subclause (1)(b) applies, within 30 days after being notified by the Police that the dealer’s application for an endorsement or a permit has been declined.

(4)

Only 1 application for compensation may be submitted by a licensed dealer for all items or parts for which the dealer seeks compensation under this clause unless the Police are satisfied that there are exceptional circumstances preventing the dealer from making only 1 application.

(5)

An applicant for compensation under this clause must,—

(a)

within 20 days after the date of their application or within any further period agreed by a member of the Police in writing, provide documentary evidence (for example, records or receipts held by the dealer) to support all amounts of compensation claimed in respect of a new specified item or specified part; and

(b)

if possible, within 20 days after the date of their application, provide documentary evidence (for example, records or receipts held by the dealer) to support all amounts of compensation claimed in respect of a second-hand or trade-in specified item or specified part; and

(c)

provide any further evidence or explanation relevant to the application, as requested by the Police, within 10 days of that request or any further period agreed by a member of the Police in writing.

16 Amount of compensation payable for prohibited items before end of amnesty period

(1)

A licensed dealer who, at the date of their application, holds a specified item or specified part to which clause 15 applies that was purchased new, may apply for compensation in respect of—

(a)

either—

(i)

the purchase price of the item or part as at the date on which the item or part was purchased; or

(ii)

if the Commissioner is satisfied that there are good reasons why that evidence of the purchase price is not available, the amount that the item or part would have reasonably cost the dealer to purchase at the time the dealer took possession of it, so long as the dealer provides evidence to substantiate the claim to a standard accepted by the Commissioner; and

(b)

any external costs reasonably incurred that are directly attributable to, or that may be apportioned to, the purchase of the item or part, including domestic and international freight costs, but excluding any interest on loans relating to the purchase of the item or part.

(2)

A licensed dealer who at the date of their application holds an item or part to which clause 15 applies that was purchased second-hand may apply for compensation in respect of—

(a)

1 of the following:

(i)

the purchase price of the item or part as at the date on which the item or part was purchased:

(ii)

the amount payable for an equivalent item or part specified in a compensation schedule, if the dealer is unable to provide evidence, or sufficient evidence, of the purchase price of the item or part:

(iii)

if a price for the item or part is not specified in the compensation schedule and there is no evidence of the purchase price, a percentage of a base wholesale price substantiated by the dealer (for example, by referring to overseas wholesale supplier prices at or around the time of purchase), being a percentage specified in clause 4(b)(i) or (ii); and

(b)

any external costs reasonably incurred that are directly attributable to, or that may be apportioned to, the purchase of the item or part, including domestic and international freight costs, but excluding any interest on loans relating to the purchase of the item or part.

(3)

A licensed dealer who at the date of their application holds an item or a part to which clause 15 applies that was received as a trade-in may apply for compensation in respect of—

(a)

1 of the following:

(i)

the value for which the dealer received the item or part (the trade-in value):

(ii)

the amount payable for an equivalent item or part specified in a compensation schedule, if the dealer is unable to provide evidence, or sufficient evidence, of the trade-in value of the item or part:

(iii)

if a price for the item or part is not specified in the compensation schedule and there is no evidence of the trade-in value, a percentage of a base wholesale price substantiated by the dealer (for example, by referring to overseas wholesale supplier prices at or around the time of purchase), being a percentage specified in clause 4(b)(i) or (ii); and

(b)

any external costs reasonably incurred that are directly attributable to, or that may be apportioned to, the purchase of the item or part, including domestic and international freight costs, but excluding any interest on loans relating to the purchase of the item or part.

(4)

To avoid doubt, if parts are stripped off a specified item to which clause 15 applies that was purchased new and the item was sold without that part, the dealer may apply for compensation in respect of the schedule price for those parts, so long as there is evidence of a connection to the specified item.

(5)

A licensed dealer who has imported an item or a part to which clause 15 applies that is subject to the control of the New Zealand Customs Service, or that has been delivered by the New Zealand Customs Service to the Police, and that is unable to be returned to the supplier may apply for compensation in respect of—

(a)

the purchase price of the item or part; and

(b)

any external costs reasonably incurred that are directly attributable to, or that may be apportioned to, the importation of the item or part, including international freight costs, but excluding any interest on loans relating to the purchase of the item or part.

(6)

A licensed dealer who has imported an item or a part to which clause 15 applies that has been forfeited to the Crown may apply for compensation in respect of—

(a)

the purchase price of the item or part; and

(b)

any external costs reasonably incurred that are directly attributable to, or that may be apportioned to, the importation of the item or part, including international freight costs, but excluding any interest on loans relating to the purchase of the item or part.

(7)

The amount of compensation payable to a licensed dealer under this clause is determined by the Commissioner, but in the case of an application for compensation referred to in subclause (2)(a) or (3)(a) may not exceed the amount of compensation payable in respect of a similar item or part specified in a compensation schedule.

(8)

If the Commissioner is not satisfied that a licensed dealer has taken all reasonable steps to mitigate their losses as required by clause 13, the Commissioner may determine that—

(a)

no compensation is payable to the dealer under this clause; or

(b)

a reduced amount of compensation is payable to the dealer under this clause.

Manufacturers

17 Application of clauses 18 to 21

Clauses 18 to 21 apply to any person (including a licensed dealer) who—

(a)

lawfully manufactured a firearm, part, or pistol carbine conversion kit on or before 24 June 2020 that is a specified item or specified part; and

(b)

is not a person to whom section 4A(1A) of the Act applies (which relates to persons who before 12 April 2019 were in the business of manufacturing prohibited parts for the purposes of permitted supply).

18 Manufacturers required to mitigate losses

(1)

Before applying for compensation under clause 19 or 20, a manufacturer must take all reasonable steps in the circumstances to mitigate their losses sustained in respect of specified items, specified parts, or raw materials (for example, cancelling orders before shipment, returning items to suppliers, or setting aside materials for the manufacture of non-prohibited items or non-firearm parts that the manufacturer is also equipped to manufacture).

(2)

When making an application for compensation under clause 19 or 20, a manufacturer must provide evidence of the reasonable steps the manufacturer has taken under subclause (1).

19 Compensation following return of materials to supplier by manufacturer

(1)

This clause applies to a manufacturer who—

(a)

lawfully purchased or ordered any raw material or item on or before 24 June 2020 exclusively for use in or for the manufacture of a specified item or specified part; and

(b)

returned that material or item to the supplier; and

(c)

received a refund for the material or item of an amount less than the amount that the manufacturer paid for the material or item.

(2)

The manufacturer may apply to the Crown for a payment in respect of—

(a)

the difference between the amount the manufacturer paid for the raw material or item and the amount of the refund received; and

(b)

any external costs reasonably incurred that are directly attributable to, or that may be apportioned to, the purchase or return of the material or item, including domestic and international freight costs, but excluding any interest on loans relating to the purchase of the material or item.

(3)

A manufacturer applies for compensation under this clause by submitting to the Commissioner a completed application in a form approved by the Commissioner within 60 days after the date of commencement of this Part.

(4)

The amount payable to a manufacturer under this clause is determined by the Commissioner.

(5)

The Commissioner must make arrangements for a payment to a manufacturer under this clause to be paid to the bank account nominated by the manufacturer.

20 Manufacturers entitled to claim compensation for specified items and specified parts

(1)

A manufacturer may apply for compensation from the Crown in respect of the specified item or specified part that they manufactured if, at the date of the manufacturer’s application,—

(a)

the item or part is delivered to a member of the Police; or

(b)

the Police agree in writing to collect the item or part at a specified time.

(2)

A manufacturer applies for compensation under this clause by submitting to the Commissioner a completed application, in a form approved by the Commissioner, that includes a statement of the date of manufacture of the specified item or specified part—

(a)

within 60 days starting on the day after the date of commencement of this Part; or

(b)

within any later period agreed by the Commissioner on the ground that exceptional circumstances justify the making of the application after the 60-day period.

(3)

An applicant for compensation under this clause must,—

(a)

within 20 days after the date of their application or within any further period agreed by a member of the Police in writing, provide documentary evidence (for example, records or receipts held by the manufacturer) to support all amounts of compensation claimed in respect of a specified item or specified part; and

(b)

provide any further evidence or explanation relevant to the application, as requested by the Police, within 10 days of that request or any further period agreed by a member of the Police in writing.

21 Amount of compensation for specified items and specified parts

(1)

A person who applies for compensation under clause 20 in respect of a specified item or specified part may claim compensation in respect of only the following:

(a)

the purchase price of the raw materials, shown to the satisfaction of the Commissioner, that were used exclusively in the manufacture of the item or part; and

(b)

any costs incurred that are directly attributable to the manufacture of the item or part, including the costs of items used for the manufacture of the item or part that cannot lawfully be used in the manufacture of non-prohibited items or parts.

(2)

The amount of compensation payable to a person under this clause for a specified item or specified part is determined by the Commissioner, taking into account—

(a)

the amount of compensation claimed in accordance with subclause (1); and

(b)

the condition of the item in respect of which compensation is claimed, by applying a discount if the item or part is not in new condition or is incomplete or in an unfinished state.

(3)

If the Commissioner is not satisfied that a manufacturer has taken all reasonable steps to mitigate their losses as required by clause 18, the Commissioner may determine that—

(a)

no compensation is payable to the manufacturer under this clause; or

(b)

a reduced amount of compensation is payable to the manufacturer under this clause.

(4)

The Commissioner must make arrangements for a payment to a manufacturer under this clause to be paid to the bank account nominated by the manufacturer.

Other compensation excluded for licensed dealers and manufacturers

22 No other compensation payable

A licensed dealer or manufacturer is not entitled to receive compensation under Part 2 of Schedule 1 of the Act and Schedule 2 in their capacity as a licensed dealer or manufacturer except as provided in this Part.

Michael Webster,
Clerk of the Executive Council.

Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on 1 February 2021, amend the Arms Regulations 1992 (the principal regulations) for the purposes of assisting with the implementation of legislative changes made to the Arms Act 1983 (the principal Act) by the Arms Legislation Act 2020 (the 2020 Act).

Regulation 1 relates to the Title.

Regulation 2 relates to commencement.

Regulation 3 provides that these regulations amend the principal regulations.

Regulation 4 inserts new regulation 28ZA into the principal regulations. New regulation 28ZA provides that the compensation and related provisions in new Schedule 2 apply according to their terms for the purposes of Part 2 of Schedule 1 of the principal Act.

Regulation 5 inserts new Schedule 2 into the principal regulations.

New Schedule 2

New Schedule 2 (as set out in the Schedule of these regulations) contains provisions relating to amnesty and compensation in respect of the possession of specified items prohibited as a result of legislative changes made by the 2020 Act and parts of specified items. Similar amnesty and compensation provisions were made by the Arms (Prohibited Firearms, Magazines, and Parts) Amendment Regulations 2019 and the Arms (Prohibited Firearms, Magazines, and Parts) Amendment Regulations (No 2) 2019 in respect of legislative changes made by the Arms (Prohibited Firearms, Magazines, and Parts) Amendment Act 2019. Where appropriate, the provisions made by these regulations are based on comparable 2019 provisions.

Preliminary and general provisions

Clause 1 defines the terms specified item and specified part as follows:

  • specified item means a specified prohibited firearm listed in clause 8 of Schedule 1 of the principal Act and also a pistol carbine conversion kit:

  • specified part means a part of a specified item that cannot lawfully be used on a non-prohibited firearm, except a part that could be used on a prohibited item before 25 June 2020 (unless the part relates specifically to a specified item (as defined in clause 1) and that item was lawfully possessed before 25 June 2020 and is delivered or otherwise surrendered to a member of the Police).

Clauses 2 to 6 relate to—

  • limits on compensation (based on regulation 28I of the principal regulations):

  • compensation schedules (based on regulation 28M of those regulations):

  • information required to be set out in compensation schedules (based on regulation 28N of those regulations):

  • the requirement to publish indicators for determining the condition of prohibited items (based on regulation 28O of those regulations):

  • provisions that do not apply to valuers (based on regulation 28W of those regulations).

Provisions relating to temporary amnesty and compensation for individuals

Temporary amnesty

Clause 7 extends the temporary amnesty in clause 17 of Schedule 1 of the principal Act so that affected persons are not criminally liable under section 50AA (unlawful possession of pistol carbine conversion kit), 50A (unlawful possession of prohibited firearm), or 50C (unlawful possession of prohibited part) of the principal Act if they apply as an individual or a licensed dealer for a relevant endorsement or permit within the specified time and comply with specified requirements.

Clause 8 sets out conditions for the temporary amnesty in clause 17 of Schedule 1 of the principal Act and the extended amnesty in clause 7 (based partly on regulation 28G of the principal regulations).

Compensation for individuals

Clause 9 provides a right to apply for compensation for a specified item or specified part (based partly on regulation 28L of the principal regulations). An application can be made by—

  • persons in lawful possession of a specified item or specified part on 24 June 2020:

  • persons who arranged to lawfully import a specified item or specified part on or before 24 June 2020.

A person can choose to apply for compensation at the outset by making their application within 90 days after the commencement of Part 2 of Schedule 2. Alternatively, a person can apply for an endorsement or a permit and wait for a decision on that application before applying for compensation. A person who opts to apply for an endorsement or a permit (an endorsement to possess a prohibited firearm or a permit to possess a prohibited firearm or pistol carbine conversion kit) can make that application within 60 days after the commencement of Part 2 of Schedule 2 or earlier. If their application is declined, they have a further 30 days to apply for compensation. In some cases, this 30-day period may end after the 90-day period. And the Commissioner of Police (the Commissioner) may allow further time on the ground of exceptional circumstances.

Clause 10 specifies how the amount of compensation under clause 9 is to be determined (based partly on regulation 28L of the principal regulations). The amount payable is either the relevant amount set out in a compensation schedule issued by the Commissioner or an amount determined by the Commissioner under clause 11 (large quantities) or 12 (unique items).

Clause 11 provides for cases under clause 9 where a large quantity of items or parts is involved (based on regulation 28LA of the principal regulations).

Clause 12 provides for cases under clause 9 or 11 where a unique item or part is involved (based on regulation 28P of the principal regulations).

Provisions relating to licensed dealers and manufacturers

Licensed dealers

Clause 13 requires a dealer who applies for compensation under clause 14 or 15 to have taken all reasonable steps to mitigate their loss (based on regulation 28Q of the principal regulations).

Clause 14 provides a right to apply for compensation for an item or part where a dealer has returned the item or part to the supplier and receives a refund that is less than the amount the dealer paid (based on regulation 28V of the principal regulations).

Clause 15 provides a right to apply for compensation for a specified item or specified part that a dealer has lawfully purchased, ordered, or received on or before 24 June 2020 (based on regulation 28R of the principal regulations).

Clause 16 specifies how the amount of compensation under clause 15 is to be determined (based partly on regulation 28S of the principal regulations). The amount payable is based on certain prices and costs depending on whether the item was purchased new or second-hand or received as a trade-in.

Manufacturers

Clause 17 states the persons to whom clauses 18 to 21 apply. Those clauses apply to any person (including a licensed dealer) who—

  • lawfully manufactured a firearm, part, or pistol carbine conversion kit on or before 24 June 2020 that is a specified item or specified part; and

  • is not a person to whom section 4A(1A) of the Act applies (persons who before 12 April 2019 were in the business of manufacturing prohibited parts for the purposes of permitted supply).

Clause 18 requires a manufacturer who applies for compensation to have taken all reasonable steps to mitigate their loss (based on regulation 28Q of the principal regulations).

Clause 19 provides a right to apply for compensation where a manufacturer has returned an item or a part to the supplier and receives a refund that is less than the amount the dealer paid (based on regulation 28V of the principal regulations).

Clause 20 provides a right to apply for compensation for a specified item or specified part that a manufacturer lawfully manufactured (based partly on regulation 28TA of the principal regulations).

Clause 21 specifies how the amount of compensation under clause 20 is to be determined (based partly on regulation 28TA of the principal regulations). The amount payable is based on the purchase price of the raw materials and costs directly attributable to manufacturing.

Other compensation excluded for licensed dealers and manufacturers

Clause 22 provides that a licensed dealer or manufacturer is not entitled to receive compensation under Part 2 of Schedule 1 of the Act and new Schedule 2 in their capacity as a licensed dealer or manufacturer except as provided in Part 2 of new Schedule 2.

Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 17 December 2020.

These regulations are administered by the New Zealand Police.