The enemy within: New Zealand tightens laws against covert foreign influence

WELLINGTON – With a

deadly lone-actor attack in Australia

just days ago, New Zealand’s two new laws passed in 2025 to strengthen its national security take on fresh salience.

Of six key assessments about New Zealand’s threat environment in 2025, a lone actor radicalised online was flagged by the New Zealand Security Intelligence Service (NZSIS) as the most plausible violent extremist threat the country faces.

But NZSIS also highlighted more insidious risks – covert foreign interference, insider manipulation and espionage targeting critical infrastructure and sensitive information – in its annual Security Threat Environment report released in August.

In some Aotearoa cities, Chinese-style gardens have sprung up over the decades as symbols of friendship with cities in China under sister-city agreements that promote cultural, educational or economic exchanges.

NZSIS, however, cautioned that such city-to-city ties can be used by foreign actors to plant seeds of influence and nurture covert agendas through seemingly benign activities such as visits, delegations and business links.

The intelligence agency said several states are involved in foreign interference in New Zealand, the most active being China.

It called out the Chinese Communist Party’s United Front Work Department for its “regularly deceptive, coercive and corruptive” activities while engaging organisations in New Zealand.

While the report did not name other countries, Dr Paul Buchanan, director of security consultancy firm 36th Parallel Assessment, said it also hints at Russia, which is known for conducting cyber disinformation activities.

With its long history of migration, New Zealand is home to dozens of ethnic diasporas, ranging from those from Iran and India to China and Colombia.

These communities are increasingly vulnerable to foreign states targeting individuals and organisations they consider “dissidents” – a phenomenon NZSIS calls transnational repression.

“Often this is towards individuals or groups who are vocal critics of the foreign state or advocates for a targeted diaspora community,” the agency said.

People, often New Zealanders, may be “co-opted” by foreign states to surveil individuals, deliver messages or even take control of community groups to push out and silence “dissident” members.

In one case, an influential decision maker was fed misinformation by a trusted adviser, unaware that the person was taking instructions from a foreign state.

Some states also harass New Zealand-based groups or individuals by accusing them of being extremists or terrorists, when they are not, NZSIS added.

The country tightened the screws on covert foreign influence with the Countering Foreign Interference Act, which came into effect on Nov 27.

The legislation criminalises deceptive, corruptive or coercive acts carried out for a foreign state to manipulate politics, public institutions or communities, with a maximum penalty of 14 years’ imprisonment for actions that intentionally harm New Zealand’s interests.

Crimes such as intimidation, blackmail and corruption result in up to 10 years in prison if committed to benefit a foreign state.

The new foreign interference legislation was the second national security-focused law passed by Aotearoa in 2025. In July, legislation regulating the use of ground-based space infrastructure, like satellite tracking stations, was passed to prevent covert use by foreign entities.

It closes obvious loopholes in previous laws governing “private” foreign relations that did not distinguish between appropriate influence activities and inappropriate interference in NZ domestic affairs, said Dr Buchanan.

“Security authorities will have to be very diligent in building cases under the Act, particularly when differentiating ‘normal’ influence campaigns, such as political party financing and cultural exchanges between student groups, and improper interference campaigns – for example, appointing local politicians as paid board members or directors of ghost firms or front organisations.”

The intelligence community and the police will have to establish if there is a link to a foreign actor, he told The Straits Times.

As for sister-city agreements, these have long been used by China as an avenue for economic and political influence under the guise of cultural exchange, Dr Buchanan said.

“That can result in anything from biased public contract letting to front organisations, favourable terms for land and equipment purchases, and/or stifling of the rights to protest against China in smaller jurisdictions,” he said.

Local councils across New Zealand have more than 150 sister-city agreements with cities in 24 countries such as Australia, Indonesia, China and Japan.

Hamilton City, for instance, has hosted a number of international students from China, according to a July report by public broadcaster RNZ. The city has sister-city pacts with Chengdu and Wuxi in China, Saitama in Japan, Ieper in Belgium and Sacramento in the US.

An NZSIS spokesman said local councils are prime targets for covert influence-building by foreign states. This is because all major commercial ports in New Zealand are directly or indirectly majority-owned by local councils, while councils also have control over the use of public spaces that can be used for organised protests.

“They are attractive due to their extensive authority over valuable strategic resources and critical national infrastructure, as well as their ability to exert influence at a central government level,” the spokesman said.

He stressed that most foreign engagements undertaken by local councils are “not of national security concern”, and the job of NZSIS is to raise awareness of the potential risks.

Dr Jim Rolfe, a senior fellow at the Centre for Strategic Studies, said the law is more about “sensitising society” than punishment.

This entails educating vulnerable groups, to ensure people understand the concept of official information and official secrets, he said.

While China dominates public discussion, Dr Rolfe said “any diaspora is susceptible to events overseas”, noting that New Zealand’s Indian community is larger than its Chinese community.

This could become an issue if the Sikhs in India, in seeking independence, try to influence the Sikhs in New Zealand to influence government policies, he added.

“Any community that is susceptible and open to overseas influence is a potential problem,” he said, adding that this includes Islamic fundamentalists.

The law has drawn mixed reactions, with some questioning its potential consequences for trade and diplomacy.

Mr David Mahon, the Beijing-based executive chairman of Mahon China Investment Management, saw the law as “directly related to China” and felt that Wellington was drifting towards a more hawkish, US-aligned posture from its longstanding non-allied status.

Mr Mahon, who is connected to the New Zealand business community in China and New Zealand businesses with a Chinese market presence, told ST that some New Zealand firms see the anti-China trend as unhelpful and potentially risky, but fear retaliation for speaking out.

China is New Zealand’s largest trading partner for both exports and imports, with two-way trade surpassing NZ$40 billion (S$29.8 billion) by June.

“You don’t create walls and barriers and fences because you’re afraid of foreign influence. You make yourself stronger so you don’t react to it and you aren’t bullied by it,” he said.

But the New Zealand China Council, which promotes bilateral trade ties, took a more measured view. “We are confident that the vast majority of New Zealand businesses will instinctively know the difference between legitimate and improper influence,” its spokeswoman said.

“In the case of any doubt, New Zealand’s government system generally encourages business to consult with officials.”