Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill

It is a very pleasant surprise for me to take a call on this bill. In order to contribute most constructively, I have to say that at this stage of the debate, which is the Committee stage, I have heard only the first reading and the second reading because I was not part of the select committee. It seemed to me that there were a number of questions—well, given that there seemed to be quite a lot of cross-party support for the intention of it, there were a number of questions that will be answered.

I am not sure whether the current Minister in the chair, Judith Collins, is the Minister who is actually responsible for it. But, given the reputation of the Minister who is the chair, I feel obliged to say that I think she will take responsibility for answering as many questions as she can, regardless of whether she is actually responsible for this legislation.

One of the first questions that I am really interested in asking is: why has it taken this long? This bill seems to have been before the House for a lengthy period of time, and I do not know why it has always dropped down the priority list. The select committee made a number of amendments to the legislation, and I am really pleased to see the way that it had quite a robust debate. From the report that is before the Committee now, it seemed to have quite a robust debate but also quite a degree of consensus that we wanted to get this right. This is legislation that is not party political, in any sense of the words, but I think that there was a genuine willingness. So I want to acknowledge the members of the committee—I cannot even remember what committee it went to now. But I think—

💬 Jonathan Young: Law and Order.

It was the Law and Order Committee—thank you. That is one of the committees that I think is being merged into another committee in the restructuring. It is going to go into the Justice and Electoral Committee, I think, in the post-election restructuring of our select committees. I want to commend the committee for what appears to be the very good work that it did.

Some of the issues that are dealt with are the provisions covering the operation of lawyers, conveyancers, accountants, and real estate agents—quite a broad range of areas, but areas where there is a lot of public engagement with those individuals. I have to say there is a fair amount of trust required with the individual citizens who are dealing with those people. Most of us when we deal with a lawyer or a real estate agent or an accountant put trust in their profession and say that we are going to be protected by their standards, qualifications, and ethics. This bill, I think, goes a fair way towards progressing the level of trust that we can have in it.

I think the Minister who is actually responsible for the bill, the Hon Amy Adams, is now in the chair and, again, I just want to commend her for being a Minister who has—as with the previous Minister who was sitting in chair, the Hon Judith Collins—a reputation for actually listening to members’ contributions, not always as carefully as they might deserve, and actually answering the genuine questions that are raised.

So as I said at the start of my contribution, this is a bill that has had rigorous consideration by the select committee. It has come back to the House in a better state than it was presented in. It has taken far too long to get it to this stage, but it has got a wide degree of support. I do not imagine that the Committee stage of this legislation is going to take a lot of time, but I would like the Minister to address the first question that has been raised in this debate, and that is: why has it taken so long? It has been pushed down the Order Paper, time after time after time. If the issues are as serious as the commentary from the committee and the comments from the Minister would indicate, then you just wonder why other legislation such as racing amendments or statutes amendments—which do not change any policy—or statutes repeal legislation, which we have recently had, actually have to take such a lot of time.

So I support the legislation. I pay tribute to the Minister for introducing it but, more importantly, to the select committee for progressing it. I look forward to the debate and also to the Minister responding to the questions that are raised.

I am very happy to take a call at this Committee of the whole House stage of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. The bill is finally starting to make some speedy progress through the House. Of course, we had the second reading yesterday, which a number of us participated in. We are now moving on to the Committee stage. But, of course, the point that my colleague the Hon Ruth Dyson made is a very, very valid one, which is that the main concern of the Opposition is that we have been so tardy in actually progressing this bill. The reason that is of import is because this goes to the reputation of our country.

There was a major media investigation into this area last year by Matt Nippert of the New Zealand Herald, which revealed that there is approximately $1.6 billion of illicit funds flowing through some of the entities that we are finally catching up with and including in this legislation. So the Labour Party’s view on this legislation is not so much that there is anything wrong with it, but that we should really have been progressing with this much, much faster. When John Shewan produced his report, which came out—members of the House will no doubt remember the Panama Papers landing in New Zealand in early 2016, where we learnt through the efforts of investigative journalists that billions of dollars of dark money is floating around our world, stemming from the drug trade, from criminal enterprises, and sometimes from arms dealing. They look for places to hide this money.

One of the things that Mr Shewan found is that one of the chief areas that the money goes into is the real estate sector in New Zealand. If members get the opportunity to read the very excellent piece by Matt Nippert in the Herald last year, he points out that the real estate sector is such a target for it is because, of course, we initially acted on trusts, but when you do that you, effectively, shift the incentive to put the dark money into the areas that you have not acted upon. Real estate is one of those areas, and, of course, there is a double whammy with real estate in New Zealand in that you can hide the dark money but you are also potentially in line for a big fat capital gain coming out of that.

We absolutely support the intent of this legislation. It is about bringing those sectors that were left out of the stage one reforms into the ambit. What it means is that there will be an obligation on people in those sectors to ensure that there is a level of reporting of suspicious transactions, and also that there will be a level of protection for those people who might make disclosures about suspicious transactions that are happening in this sector. So we are looking at real estate, we are looking at the New Zealand Racing Board, and we are looking at certain other high-value sectors—places where this money can be put.

If we want to look at some of the specifics, there was some reasonably good work that was done by the Law and Order Committee, just in response to some of the submissions and also through the process of working through the legislation and making sure that it is as effective as possible. One item I just want to touch on briefly are the changes made in Part 1 of the bill, on page 6 here, to clause 5(1), where there was just a bit of clarification in terms of the definition of “accounting practice”, where it was pointed out in a number of the submissions that we needed to make sure that we were including accountants who were in a partnership with one another as well. There are a number of these changes that the Labour Party supports. They were just very pragmatic, very sensible, about tightening up the legislation.

The point I want to make on that is that when Matt Nippert did his report early last year, he pointed out that when the police gave advice about this issue, they found that in 26 percent of the cases that they cracked open where there were assets coming out of organised crime, there were complex arrangements put together by lawyers or accountants. So we are talking about huge values of money, every year, coming out of illicit enterprises, and the criminals, the people who are bringing this money in through illicit means—these are not guys who just stuff a bit of money under the mattress; these are people who go and get smart lawyers and smart accountants to tuck their money away.

That small change in clause 5(1) is a good example of the select committee doing its work and just making sure that we are tightening the legislation as much as possible to make sure that we are not leaving it open for it to be exploited by those lawyers and accountants who will no doubt, in some cases, still be looking for ways to get through the legislative net that we are trying to knit here. I will leave it at that. I am sure there will be many other calls taken by the Labour Party on this bill. We support it, but it has come later than it should have.

I seek leave to take all parts and clauses of this Committee stage as one question.

Leave is put for that purpose. Is there any objection? There appears to be none. I just need to restate the question. The question is that Parts 1 and 2, schedules 1 to 3, and clauses 1 to 3 stand part.

Parts 1 and 2, schedules 1 to 3, and clauses 1 to 3