Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill

I present a legislative statement on the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill.

SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon NICOLE McKEE: I move, That the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill be now read a first time. I nominate the Economic Development, Science and Innovation Committee to consider the bill, and, at the appropriate time, I intend to move that the bill be reported to the House by 24 November 2025.

An effective anti - money laundering and countering the financing of terrorism—which I will now call the AML/CFT—system is critical to New Zealand’s efforts to detect, prevent, and disrupt financial crime. In order to work, the system needs a consistent, coordinated approach across all responsible agencies. However, it also needs to be pragmatic, engaging with industry and recognising the real-world challenges that businesses face in meeting the AML/CFT obligations. As Minister, I’ve heard from many New Zealanders about the frustrations of the current system: it’s complex, obstructive, and places repetitive, burdensome obligations on businesses. It fails to take a truly risk-based approach, and often treats all businesses the same, regardless of the risks that they pose.

When the legislation was first enacted, three independent supervisors were created. Even then, it was recognised that this structure would make it difficult to deliver a consistent approach. That has proven true. The current model is expensive and fragmented. It creates confusion, delays progress, and relies on rigid regulations rather than flexible, practical tools like rules, guidelines, and notices. As a result, the system is no longer fit for purpose. It struggles to respond to emerging risks, new business models, and advances in technology. It doesn’t strike the right balance, over-regulating low-risk activity while failing to keep pace with high-risk threats.

Regulation must be aligned with the fundamental purpose of the AML/CFT, and that is to combat crime. That’s why the changes proposed in this legislation deliver on the coalition Government’s priorities of cracking down on crime while also cutting red tape for New Zealand businesses. This bill modernises our AML/CFT framework to reflect international best practice and support a smarter, risk-based approach. No more one-size-fits-all compliance—we’re moving away from a tip-box model to one that distinguishes between real risk and routine business activity.

The Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill seeks to make four key, structural reforms. The first major reform is to appoint the Department of Internal Affairs as the AML/CFT supervisor—the sole supervisor. This change will streamline decision making, improve consistency, and reduce unnecessary compliance burdens, especially for low-risk businesses and transactions. It will also allow for quicker, more coordinated responses to emerging issues, and provide businesses with clearer and more practical guidelines. The Department of Internal Affairs will also be better positioned to advance digital solutions, like identity verification technologies, that they have stalled under the current, fragmented model.

The second reform updates the roles and powers of the remaining regulatory agencies: the Department of Internal Affairs, the Ministry of Justice, and also the Police. As we’ve expanded the scope of the Anti-Money Laundering and Countering Financing of Terrorism Act beyond traditional financial services, we’ve uncovered gaps. For instance, many obligated businesses now operate from private dwellings. While most comply, some do not, and the supervisors currently lack the tools to effectively monitor them. This amendment will give the supervisor the power to enter private dwellings used for business activities captured under the Act, ensuring enforcement can occur where it is most needed.

The third reform shifts many prescriptive regulatory requirements into more flexible secondary legislation, such as codes of practice, rules, and notices. The over-reliance on rigid regulations has been a direct result of the three-supervisor model. With a single supervisor, we can now adopt more agile, responsive ways of setting and updating obligations, tailored to evolving risks and business needs.

The fourth reform is the introduction of an industry levy to support a new hybrid funding model. This model ensures the AML/CFT system is sustainably resourced while maintaining the flexibility to reform and improve. The levy will be proportionate to risk and capacity to pay, targeting larger, profitable, high-risk sectors such as banking, while protecting the viability of smaller businesses. This is consistent with international practice and will ensure that those who benefit most from a safe financial system contribute to maintaining it. Importantly, the levy will be developed in consultation with industry and tied to a national AML/CFT strategy so it reflects both business realities and the Government’s crime-fighting priorities.

These changes are significant. They ensure that our AML/CFT system continues to protect New Zealand from financial crime, while also supporting businesses to meet their obligations in a fair, proportionate, and practical way. This bill enhances clarity, reduces compliance costs, and delivers stronger oversight. By introducing a single supervisor and a modern funding approach, it sets the foundation for an AML/CFT regime that is both effective and enduring. I commend this bill to the House.

The question is that the motion be agreed to.

Kia ora, Mr Speaker. Kia orana. Thank you for that. Look, first of all, straight out of the gate, we are going to support this bill to select committee. That’s not to say that it has our wholehearted support. We want to see it at select committee because we want to really have a close, close look at it.

The first thing I want to say is this: effective anti - money laundering and countering the financing of terrorism laws and regulations is not “red tape”. It’s the opposite of red tape. It is a critical part of our financial infrastructure, and a critical part of the effective detection, prosecution, and prevention of serious organised crime. When we see methamphetamines skyrocketing—and, clearly, the sale of methamphetamines is skyrocketing in our community—the suggestion that we should be just lowering the bar across the board is a real concern.

Now, we agree with the principle of proportionality and risk-based regulation, but we need to be very cautious when we say family trusts are safe—because some of them might be, but some of them also are not—or that we should just open the gates and kids can open bank accounts. Well, kids’ bank accounts can be used for money laundering and for the financing of terrorism. Caution is really, really important here. So, yes, let’s have a look at it.

One of the key things that this bill does is it moves the place where the rules are made down substantially—essentially, into Government, into the Department of Internal Affairs. Now, we agree with flexibility, and we agree that laws and rules should be made at the lowest, effective, and accountable level. But if we’re going to be changing rules about money laundering, I think we need to exercise some caution, and we need to make sure that there is accountability. There is a real risk if the real rules, where they interface with the supervised entities, is policy, where it’s the manual that’s been written by some policy adviser in internal affairs rather than been given the scrutiny, certainly, that this place gives the laws that we make but also in terms of actual regulations. Orders in Council get scrutinised by the Regulations Review Committee and are subject to much more rigorous procedures. So, yes, we agree with risk-based regulation, but we don’t agree with throwing the doors wide open.

I guess the other thing I would say about this, in terms of the levy—yes, the idea that, you know, all of this is done by regulation. The bill itself is very neutral as to what the levy will be and who will pay it. It just empowers the Minister, essentially, by Order in Council to impose these levies. That’s OK if it’s done right. But, again, we need to be really cautious here. The detection of organised crime—the prosecution of money laundering—is a core function of the State. It isn’t something which is kind of a collateral benefit to the finance industry and they should pay for. I’ve read the paper on the levy, and it recognises that. It appears, if I’ve read it correctly, to cap the levy at around $22 million. I do think we need to make it absolutely clear that in terms of the detection of crime, the enforcement of crime, prevention of crime, and prosecution, that should come from a general appropriation, because that is a core function of the State, rather than something which should be funded out of a levy because it gives a private benefit to an industry or a group of people.

Again, we’re supporting this bill, but you’ll have picked up that we have genuine concerns about it. We do want to see a workable functioning anti - money laundering and countering of financing of terrorism framework. We’re committed to that. That’s why we’ll agree—and why we need a four-month report-back date, is the final thing I’ll say. Six months would have been fine—a much better idea.

Thank you, Mr Speaker. I rise on behalf of the Green Party of Aotearoa New Zealand to speak on the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill. The Green Party, too, will support this bill to select committee, as well, and I just want to detail a few of the reasons for that.

I think, more broadly, let’s look at the context in terms of this bill. This is part of a suite of legislation that has been introduced around anti - money-laundering and countering financing of terrorism, or AML/CFT. But in this particular case, what we’re looking at here—more broadly, one of the reasons for this—is around the idea of simplifying and making more flexible in terms of some of the regulations. Those are introducing a single supervisor for AML/CFT obligations on regulated entities as opposed to three, which is what we currently have.

I think if we’re looking at the even broader picture, in terms of our AML/CFT regulations, we do need to see some changes, and this is something that was recommended by the Financial Action Task Force, and this is something that we do see is kind of needed. But I think, in the context of this particular bill, there are a lot of conditions, and, also, we talked about levies and other matters that have been included in this bill; however, what we’re not seeing in terms of the legislation itself is potentially the ramifications that this bill will have on addressing the broader idea of AML/CFT.

Now, understandably, one of the concerns that the Financial Action Task Force has raised is around our regulatory environment. I think the previous speaker has mentioned that regulations in this case are needed for a reason, in terms of the safety and security of our financial infrastructure, but also so that people don’t get away with things, particularly when it comes to financial and white-collar crime. Indeed, one of the things that we saw also in recent times is around the fact that the Serious Fraud Office, although it got a small reduction—from memory—in the Budget, is planning on ramping up some of its potential investigation around corruption and also fraud. I would go further in saying that this is a real opportunity for agencies such as IRD to also ramp up and support and fund the oversight and investigation of tax evasion and tax avoidance in a more constructive and proper manner.

On the bill itself, one of the things that we do see is a potential concern—and this is one of the things we would like to seek further advice from the select committee and, when we get a chance, to hear from both the public and from experts in the field, as well as from officials—is this idea of, well, if there are certain areas that can be loosened, what risk are we opening our financial institutes up to? What sort of conversations, for example, have there been with the banking sector at this stage on this particular legislation?

Again, one of the things we’ve heard is around the fact that, yes, there is this idea that we want to make it easier for people to open bank accounts—absolutely. But at the same time, we have seen in the past where bank accounts, and particularly bank accounts of children, have been used for AML/CFT purposes. On the other hand, in contrast, what we are also wanting to tease out as a part of this bill during the select committee stage is: what are some of the measures as a result of this? What are some of the measures around financial inclusion—particularly when we’re looking at our rural communities, or even communities that have concerns and struggles with the banking environment in the first place?

There are some good things that this bill has introduced. Like I mentioned, it is something that is much needed in terms of our update of AML/CFT regulations and regulatory environment, but it’s also some of the nuances we want to see. I think the last thing that I want to also mention in terms of this particular point is the extent the bill extends the delegation of secondary legislation under this Act to better enable risk-based regulations. I also think this is an interesting perspective—that we are moving things from primary to a secondary legislation. What does that potentially also mean from the perspective of regulation-making power, and also the ability for people and for Ministers to make those kinds of Orders in Council that facilitate some of the secondary legislation? So the Green Party will support this bill to select committee, and we’re looking forward to hearing more about it.

I rise on behalf of New Zealand First to speak on the first reading of the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill, and New Zealand First will be supporting this piece of legislation.

It is an important part of the coalition agreement commitments to reduce regulatory burdens and to make sure New Zealand meets its international obligations to combat money laundering and terrorism financing. We believe that the move to a single supervisor will create regulatory efficiencies and reduce some of the complexity that is currently facing the system. We support the introduction of an industry levy to balance the cost, and, most importantly, that we are delivering a risk-based legislation that is proportional to the risks we’re dealing with and allows us to streamline some of the approaches.

New Zealand First supports the measures to strengthen our financial system’s integrity without stifling economic growth. We encourage the Justice Committee to thoroughly review submissions to ensure the levy structure is fair and the single supervised model delivers on its promise of efficiency. New Zealand First supports the bill at the first reading and looks forward to the analysis of the select committee. We commend the bill to the House.

Thank you, Mr Speaker. It’s a pleasure to rise in support on behalf of the National Party on the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill. I look forward to discussing this at select committee. The Economic Development, Science and Innovation Committee is very collegial, and I’m sure that we’ll have lots of discussion. I commend the bill to the House.

We don’t have Te Pāti Māori here, so the next call will be a National call.

Thank you very much, Mr Speaker. I just want to echo the comments made by my colleague Vanessa Weenink in her speech that we support the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill and are supportive of this moving to the select committee stage to improve and enhance the legislation, and to receive the submissions from the general public on it.

I’m looking forward to seeing it go to the Economic Development, Science and Innovation Committee for a change, rather than the Justice Committee, which, I know—as Vanessa Weenink outlined—will make some very positive contributions to the bill. Therefore, I commend it to the House.

Thank you very much, Mr Speaker. This is the second anti - money-laundering bill that we’ve had recently, and I understand it’s two of three: the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill. I’m interested to know, and I’m sure we’ll find out down the line, why we’ve had three separate ones and why they weren’t bundled as one piece of legislation. Whether the Government hasn’t got enough legislation—is that why it’s been torn apart? I’m not sure why they’re separate. However, as indicated previously, we’ll be supporting this at least into select committee.

We, to be clear, support the fact that there is good practice and it’s not unnecessarily burdensome to have the anti - money-laundering and counter financing of terrorism. It’s a sensible change but makes the regulatory environment easier to navigate with international counterparts, such as Australia. But we also need to be clear that it’s not actually making anything easier for organised criminal networks. It sometimes sits at odds with some of the advice that has been received by the ministerial advisory group on organised crime, which has indicated not only that methamphetamine has reached record-high levels in New Zealand, a 97 percent increase, and that organised criminal networks—I think the quote in the ministerial advisory group is that the Government is “losing the fight” on organised crime in New Zealand. We know that organised criminal networks are very smart at using money laundering as a way of processing the proceeds they make from the record amounts of methamphetamine that they are currently selling within New Zealand.

Our word of warning is that while we support legitimate changes to make it easier for legitimate actors to navigate the system, we still think it’s important that it operates in a way that prevents and deters criminals and organised crime from laundering money in New Zealand. We know, in the past, we have been a target for shell companies for purchases even of residential property, and that organised criminal networks have used New Zealand because it has been seen as an easy target, in a way, to clean money. There were significant changes that began under a previous National Government, under John Key, and continued with changes to that to make sure that we had a tight system and that there was reporting. It was sometimes considered to be onerous, but there was a view that it was important that that was in place to deter and also to prevent organised criminal networks from taking advantage of being able to shift their money around without being detected by the authorities in New Zealand and also our international counterparts that work to uncover how those networks are cleaning their money around.

We’re concerned that these kinds of important decisions are potentially going to be made by secondary legislation. In true Nicole McKee style, it all comes in the regulations, as we’ve seen with firearms. That means it’s not within the full scrutiny that Parliament is able to give it, if those changes are in the regulations. We want to know exactly what is being proposed by that secondary legislation before we’re going to rush around and say it’s amazing.

One example is that children’s bank accounts and real estate transactions can both be a significant vector for money laundering. We do need to ensure that children do not become a way of creating a false identity and getting access to a bank account simply to enable criminal networks to exploit loopholes or weaknesses within our system.

We know that we have a massive methamphetamine problem in New Zealand, and we know that criminals are importing and peddling methamphetamine. They look to ways of cleansing that money. It does seem really strange that we’re seeing the cutting of red tape at a time in New Zealand when we should be really looking closely at what additional loopholes we can be closing to strengthen the protection of our communities against organised criminal networks.

Look, we’ll commend this to select committee, and I look forward to seeing how those submissions develop. We commend the bill to the House.

It’s a pleasure to rise and add my support in the first reading of this bill, the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill. I can understand why we have a focus on this side in cutting red tape, because we want to see the average mum and dad with a little family be able to purchase a little home, their first home, without having to go through the burdens that gang members that get $2.7 million from former Labour Governments didn’t go through. With that, I’m looking forward to seeing what comes out of this bill, and I commend this bill to the House.

Thank you, Mr Speaker. It’s a pleasure to rise in support of sending the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill through to select committee at first reading—a bill which introduces a single supervisory for anti-money laundering and countering the financing of terrorism, and placing obligations on regulated entities. We’ve heard from colleagues across the way, from the Minister, that the intention is to reduce complexity in the regulatory system and, essentially, to increase efficiency.

While I do rise in support of the bill, I would like to echo some of the comments made by my colleague Dr Duncan Webb, firstly, in terms of whether it’s appropriate for some of the regulation or some of the rules to be pushed down into regulation. I do think that what we are tending to see in terms of parliamentary process is a shift to what’s called “framework legislation”, which means that a lot more regulations are being made that concern substantive matters. Certainly, members of the Regulations Review Committee will be aware that there’s been comment on that and whether it’s more appropriate for some of those rules to sit within primary legislation. So I look forward to having that conversation at select committee.

I did want to focus my other comments on the section 7 New Zealand Bill of Rights Act vet, where I thought some interesting issues were raised both about search and seizure but also around detention. Again, I do hope that we receive submissions on this, because I do think they warrant further exploration. Clause 21 of the bill amends section 132, and that has a mixture of both powers that it gives the supervisor that affect search and seizure rights as well as detention rights. So, in terms of search and seizure, that clause clarifies that the supervisor has the ability to conduct on-site inspections, and it also clarifies that the supervisor is able to request the production of or access to documents or information required under the existing power.

In my view, it’s quite interesting that the New Zealand Bill of Rights Act vet says that this can be deemed to be a search. The other example of a search is probably more obvious, contained within the bill—that’s clause 23, and that’s the one which essentially prohibits the supervisor from entering a dwellinghouse unless they have consent of the occupier or they have a warrant to do so. Now, in the initial drafting of this section, there was Crown Law advice that raised issues with the way in which the provisions had been drafted. Essentially, the Crown Law advice resulted in a more stringent test for when a warrant could be granted and when a supervisor could enter a dwellinghouse.

The conclusion of the New Zealand Bill of Rights vet is that while there are, prima facie, search and seizure issues raised, those have been managed within the revised text, if you like, so that there are reasonable limitations in there and the individual will still retain the right against self-incrimination, so they are not forced to respond to certain things. I do think it presents a question of empowerment in terms of the individual understanding their rights and knowing when they can refuse production. So that is one thing that I will be asking questions about.

The other issue is one of detention, because there is a new power regarding the requirement for the individual to attend a meeting; however, there is no provision relating to the individual being able to end the meeting. I thought that there was quite an interesting comment in the section 7 vet, where essentially the advice is that the supervisor will need to be careful when compelling attendance of an in-person meeting—not the audio-visual link but an in-person meeting. Certainly, we will need to have a conversation about what rights the individual has to draw a close to that meeting without being subjected to penalties that are currently in the legislative framework.

Again, I do commend the bill to the House, but I look forward to interrogating the provisions in particular that relate to search and that relate to detention.

Thank you, Mr Speaker. The Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill consolidates anti - money-laundering and countering financing of terrorism oversight under one regulatory body, replacing the multi-agency model that it is in now. Regulated entities will benefit from the simplified compliance requirements. We support this bill, and I commend it to the House.

[Interruption] That is a very good tactic, Todd, to distract me. Thank you for giving us the opportunity to rise and speak to the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill.

The Anti-Money Laundering and Countering Financing of Terrorism Act, which this bill will amend, was developed without input from tangata whenua, and it shows. This Act has prevented tangata whenua from accessing financial services and capital for two decades, because many of our people do not have proper documentation. These requirements have been blocking our people from buying their own homes. They are completely unnecessary. A large amount of our land is held in Māori trusts established under the Te Ture Whenua Maori Act 1993, such as whānau trusts, ahu whenua trusts, or Māori incorporations. Many governance structures established following a Treaty settlement also operate as trusts.

The Crown alienated and stole our land by forcing us to individualise our whenua. To this day, they are punishing us for refusing to individualise. Holding whenua in trusts is one of the only ways we have left to hold our land collectively, as our tīpuna did. Our people are scrutinised far more than any other people in Aotearoa because of this fact. Because of this Act, we are vetted at every stage, and this makes it extremely difficult to access and manage our funds and our whenua. This is the context as to why we take our position today on this bill.

Cameron, don’t fall off your seat; we will be supporting the bill in front of us today, because it loosens the verification requirements that have been blocking our people from accessing financial services and capital, and because it will reduce the amount of scrutiny our trustees and beneficiaries face for simply owning land as a collective. Therefore, we commend this bill to the House.

Motion agreed to.

Bill read a first time.

Bill referred to the Economic Development, Science and Innovation Committee

Instruction to Economic Development, Science and Innovation Committee