Mallard Trevor: Anti-Money Laundering and Countering Financing of Terrorism Bill — First Reading 
Mallard Trevor: Anti-Money Laundering and Countering Financing of Terrorism Bill — First Reading 
[Volume:655;Page:4787] 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 It is good to beat the member Nikki Kaye to the call and I hope that later in the year the experience can be repeated in a bike race although I am not quite as confident about that as I was about the call. 
I want to have a discussion about money-laundering about the widespread practice that has been well canvassed here whereby money changes from dirty money into clean money through laundering. That is the usual understanding of the term but occasionally clean money turns into what we might describe as disguised or dirty money. A number of members opposite have some experience of this. I think the Waitemata Trust was probably the most widely used money-laundering vehicle within the New Zealand political system. Over $1.2 million in 2005 was laundered through that trust in a very similar way to international money-laundering. The trust was seen as a way of moving cash without identifying the original owners or the intermediate owners. 
Clare Curran 
: Secret money. 
Hon TREVOR MALLARD 
: Well it is not a secret and it is not surprising. I think Buddle Findlay did one such transaction for Labour before the practice stopped; from our perspective transparency and sunlight were very very important in this particular area. I see that as we move forward National seems to be accepting the fact that that sort of money-laundering is inappropriate. It is unlikely to continue in the future and I think that is a good thing. 
Early in my time as Associate Minister of Finance Labour members looked at this area pretty extensively and it is fair to say that we came to some different conclusions from those that we have come to now. 
Hon Simon Power 
: A lot has changed! 
Hon TREVOR MALLARD 
: A lot has changed. The world has changed substantially over that period. The whole electronic banking system has developed in a way that is enormously different from where it was at that time. At that time people who looked at us internationally said that we had a problem in theory but not in practice and to a certain extent that was right; we did not quite fit with the international models. We had a prudential system around our Reserve Bank and the supervision of our banking system was a lot better and that would not have been acceptable in the United States and in the United Kingdom at the time. Clearly times have changed. There is a lot of transparency of the United Kingdom’s banking system as far as the British Government is concerned; it owns just about all of it as a result of the changes that have occurred there over the last 12 months or so. Therefore I presume that it would not have any problems around transparency. 
As a member has said there has been a movement a growth in sophistication both amongst terrorist groups—and that has become very clear—but also amongst drug dealers. Those of us who have slightly more time now were able to watch a television series recently on Terry Sinclair—the Mr Asia series. It was an Australian series that apparently had some relationship with the truth and— 
Clare Curran 
:  
Underbelly 
. 
Hon TREVOR MALLARD 
: The name was  
Underbelly 
; I am never good on the titles or names or things like that. But it showed that 20 years ago there was not the sophistication in the money-laundering system at that particular time. In fact there was a lack of sophistication in quite of few of the approaches taken by Mr Sinclair and a number of other people in that period! But since that time organisations that were there 20 years ago have become much more active and sophisticated—in particular drug gangs. My view is that the ability to follow the money as far as the drug gangs are concerned is very very important. We know from the assets that through even casual observation within our electorates we see accumulating that they cannot have been developed through honest means by the individuals who now own those assets. It is important that we have the ability and as much strength as possible in the regulatory system to dive down under a lot of the fronts that exist and thereby push back against drug dealers in particular but clearly there is the question of terrorists as well. 
Without revealing too much of the previous Cabinet’s secrets I can say that some really interesting debates occurred around proscribed organisations around who should be on the list of international organisations to be regarded as terrorist organisations and who should not. There were some very strong views about organisations that some of us had had dealings with over many many years. Certainly the fronts were very peaceful and the individuals who were involved in them were seen by a lot of people to be making a big contribution to New Zealand. But there were some international suggestions that money being raised for those groups and those communities was finding its way to terrorists of a wide variety of hues—without getting on to the sides of particular debates and battles that are happening in nations around the world. That goes to the question of whether New Zealanders have knowledge of where their money will go when they make donations to seemingly innocent and good organisations because sometimes behind them—sometimes quite a long way behind them and quite well-hidden—are organisations that when we know what they get up to are in fact organisations we should have nothing to do with and certainly should not be financing. 
This is a good bill. It is an indication that times have changed. There is an acceptance of that I think around the House now. There are some things that I would have probably 7 or even 5 years ago regarded as an infringement of individual rights or as a breach of civil liberties but on balance I have changed my view. I think that the majority— 
Hon Clayton Cosgrove 
: True! 
Hon TREVOR MALLARD 
: I have not changed my view about Mr Cosgrove. 
Hon Clayton Cosgrove 
: Nor I about you Mr Mallard. 
Hon TREVOR MALLARD 
: Well I think there is a mutuality there. Our view is that the world has changed we have to stay up with modern methods and that involves some sacrifices as far as our civil liberties are concerned and I think it will be a very good debate to have within the select committee. I do not want to signal automatic support for the bill when it comes back until we have had that debate and heard what the views on it are. Thank you. 
Bill read a first time.