Sio Hon Aupito WilliamAUPITO WILLIAM SIO (Labour—Māngere): I am happy to join my colleague Stuart Nash in making some comments at the second reading of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. The bill was referred to the Law and Order Committee on 23 March of this year. Following 31 written submissions of which 29 supported the objectives of the bill in general the report of the Law and Order Committee recommended that it be passed with a number of amendments. The committee members I think generally took part in the discussions to try to allay the concerns of those who made submissions. Things that were raised as issues by submitters included the time frame for implementation the scope of activities obligations for high-value dealers information sharing legal professional privilege exemptions and changes to some definitions such as recommending a change to the definition of law firm". The committee took note of concerns by the submitters that proposed time frames for implementation were too short. It was the time frame that took up a bit of time within the committee. We had debates—I think there were some concerns from the Government members about our desire to bring it forward and bring it quickly but none the less I think I am happy that the Government has decided to do this.In saying this I think it is important that this is the second part of two-part legislation that aims to combat money laundering and financing of terrorism. I think it is important also that the first part was introduced sometime before the release of the Panama Papers. When it was introduced this Government deliberately wanted to exempt these institutions—lawyers and real estate agents—and yet we now know that there was a strong suggestion by the Police. It made a strong recommendation to the Minister saying that the exemption of real estate the exemption for accounting firms and the exemption of lawyers actually put the reputation of this country at risk. According to the Police and according to officials who have undertaken research into the matter after the first stage of the legislation it amounted to about $1.6 million of illegal activities that the Police say took place under what was going on. Here it is. "Police research concludes a loophole is seeing lawyers accountants and real estate agents being increasingly used to launder $1.6 billion"—so it was my mistake; it was not $1.6 million—"in dirty money annually—including into New Zealand's booming property markets."I suppose what I am trying to highlight is that the Minister of Justice and the Government had ample time and warning that this was going on to be able to stand up and put a stake in the ground to say: "We're going to move fast and act quickly in order to protect the reputation of New Zealand." But they did not and I think the Minister needs to respond and answer as to why because Police investigation " 'exposed the fact that professional services and the real estate sector are closely linked to organised crime and drug offending.' … That research sampling freezing orders obtained to seize the proceeds of crime found 26 percent of cases involved unpicking the work of accountants and lawyers and more than half"—or 56 percent—"involved property deals where 'offenders were ultimately successful in integrating criminal proceeds by purchasing real estate.' "The advice was given to the Minister and the Government way back in 2013 when the first tranche of legislation came into effect. But the Minister did not take action and reports released under the Official Information Act which were provided to the Weekend Herald following a complaint to the Ombudsman show that justice Minister Amy Adams was briefed in June about Police concerns but substantive policy work to close the loophole was begun only a year later. That is why we find ourselves here now. There has been considerable red flagging if you like but for some reason or other they did not do it. That is one of the reasons why the Opposition members in our discussions with the Government select committee members insisted that it was important that we bring forward the implementation of the bill and not leave it out too far. It is about protecting the integrity and the reputation of our country. As I said I think evidence that the country was worried about that is the fact that of the 31 written submissions 29 supported the objective of the bill in general. In fact I cannot remember whether any of the submitters objected because of the fact that this was a serious matter regarding the protection of our reputation.I want to go on further and say that in terms of the first bill: "The regime was first applied to banks and casinos in 2013—with professional services firms being brought in at a later date—and broadly requires organisations to ensure they know who their clients are and to actively monitor and report suspicious transactions to Police. In a briefing to Minister Adams in March which included Police concerns officials said that the mismatch in coverage meant the professional services sector was now more attractive to criminals and 'potentially provides a 'road map' for would-be money launderers'." So there was ample red flagging to the Minister and I think the Minister needs to answer for why she dragged her feet.In fact the Real Estate Institute of New Zealand said it was accepting appropriate vigilance by the department and supports the establishment of suitable compliance provisions. The Law Society said it always recognised the case for lawyers being reporting entities under the anti - money-laundering legislation and was not opposed to it. Chartered Accountants Australia and New Zealand said that it had not lobbied to delay the policy and while it supported the regime being extended this support was contingent on the regime being practical cost-effective and not imposing excessive compliance costs.So you see even the three core professional organisations—real estate lawyers accountants—are raising their hands and saying: "We too are concerned about the protecting of our reputation so don't blame us." It has been the Minister and the Government dragging their feet on this."Officials pushing for faster action closing loopholes … have expressed concern that our international reputation may be at risk if changes aren't implemented quickly enough. Members of the Paris-based Financial Action Task Force—a multinational group formed to fight financial crime—face regular inspections and officials warned New Zealand could get a ticking off. Briefings last year to Minister of Justice Amy Adams noted delaying work on the policy until 2016—as was eventually decided"—by her—"made it 'less likely to meet FATF's timing for a positive report…' ".I think reading through some of these submissions by the public and reading through what the Police have indicated and what officials have said it has to be said with the greatest respect to the Minister that she is at fault and allowed for this to continue. As a result of her dragging her feet and not moving quickly we ended up tarnishing our international reputation because we were then seen as an easy target for criminals and organised crime to launder our money."