Customs' preferred option was to require passwords for electronic devices without meeting a threshold, such as suspicion of criminal activity.
Critics of the proposal, including the NZ Council for Civil Liberties, have cited what they see as serious workability issues around the proposed change to require passwords, including the fact a person can have documents or files in cloud storage, meaning they will not be kept on an electronic device.
Today, Ms Wagner said that would not happen - but in some circumstances people would likely be required by law to provide passwords.
"The Government has agreed in principle that Customs needs to meet a statutory threshold before examining electronic devices. We have asked Customs to do further work on what this would look like in practice and report back prior to introduction of the Bill.
"The Government has also agreed in principle that, once the threshold is met, a person should have to assist Customs with the examination if asked."