Hodgson Pete: Anti-Money Laundering and Countering Financing of Terrorism Bill — In Committee 
Hodgson Pete: Anti-Money Laundering and Countering Financing of Terrorism Bill — In Committee 
[Volume:658;Page:6939] 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 I want to make some initial comments about clause 3A. If I recall correctly the original idea came from the Legislation Advisory Committee. If it did not then it came from the chairman of the Foreign Affairs Defence and Trade Committee John Hayes; and if it did then it was the chairman John Hayes who picked it up and ran it through. What that provision does—it is called an overview in the chapeau—is tell the reader I think in something getting pretty close to plain English what the bill is about and that is not a bad thing for us to adopt as a legislative practice. It takes us through in a page and a half something that would have been the early part of the explanatory note when the bill was introduced. Therefore the question that arises is whether in the future we will as a nation get into the habit of having an explanatory note in legislation. I know that there is a possibility of lawyers claiming that because it is part of New Zealand law they can therefore take a look at the explanatory note or the overview and determine that therefore it means that clause 16 in Part 2 or something or other means something other than what it says it means. I know that there is danger in that but the benefit is that for someone like me who does not have a law degree and does not read law easily—my brain does not read law easily—this part is pretty meritorious. 
I wonder whether the Minister in the chair the Hon Simon Power who happens to be the Minister of Justice might like to indicate to us whether he thinks it is good drafting practice for us to take an overview clause like clause 3A and make it something more than the routine we have at the moment. 
Needless to say my second contribution to this legislation has to be about the issue of politically exposed persons. I think my colleague the Hon Trevor Mallard has made a grave mistake. I think my colleague the Hon Trevor Mallard should be invited to withdraw his amendment. He certainly has good intentions in putting the amendment forward. Indeed the bill as introduced was exactly what the Hon Trevor Mallard would now have it be. But I think my colleague the Hon Trevor Mallard was not party to the select committee hearings. He was not party to an exploration of how these things were managed in Australia. He was not party to an exploration of how these things are done in other jurisdictions—such as Britain Canada the US and so on—and as a result I think he is the poorer for it. 
I would like to say briefly in order to bring my beloved colleague the Hon Trevor Mallard up to speed that we run the risk of giving ourselves false comfort if we think that by delineating a certain number of domestically politically exposed persons we are therefore able to take a lighter or easier approach to people who are not on that list. Furthermore we need to take into account the fact that politically exposed persons are as likely as anyone else who is laundering money to try a bunch of falsehoods in order to achieve that laundering whether it is just making one’s trust a discretionary trust so that there can be no see-through to who the beneficiaries are—and the legislation allows for that see-through for that piercing of the veil if one likes of a trust—or whether it is the issue that if a person is not on a list somehow he or she cannot be at risk. Either of those options might lull us into a sense of false security that we have the issue of the politically exposed person covered when I think demonstrably we do not. 
The two issues in front of this House over recent weeks involving the Deputy Prime Minister of this country and involving a backbencher Melissa Lee draw specific attention to how it is that one can be lulled into a false sense of security. Neither of those issues would be caught if the Hon Trevor Mallard’s amendment were to be put and were to pass. In the case of the Deputy Prime Minister it is because he has chosen the vehicle of a discretionary trust. In the case of Melissa Lee it is because she is not a member of the executive. So let us not be lulled into a sense of false security on the basis that we might have a nice positive list in the bill as introduced of politically exposed persons and therefore we need not bother because we have two instances involving two members of this House neither of whom would be caught if the Hon Trevor Mallard’s amendment were put and passed. And that is the point; it is general vigilance not particular vigilance that matters. It is an overview that matters and not a degree of particularity. It is a culture of supervision that matters not the names and addresses of these named and addressed people. 
Of course there are other reasons why a politically exposed domestic person would be a difficult one to cover and that is that the legislation as introduced said we needed to cover the wives of such people or their husbands or their spouses in general including their de facto partners. It also included the children of that politically exposed person including presumably the children of the de facto partner of the politically exposed person. Nobody knows that list so we were kidding ourselves that we could have known it. 
When the honourable chairman of the select committee made his brief remarks he pointed out that commercially there are available internationally lists of thousands of people who may or may not be suss. No doubt those lists will be altered every day. They are used by financial institutions now. There is no doubt that New Zealanders are on that list either because they are thought to be suspect or because they are politically exposed. There is no doubt that that list is in use and contains the names of New Zealanders now. The view that the chairman came to and the view that I came to is that such a list and such an approach is the more viable way of keeping a degree of vigilance and that it is not appropriate for us to give ourselves the conceit that we have this thing covered by a particularly narrow approach to politically exposed persons domestically. 
For that reason I shall be voting against the amendment in the name of the Hon Trevor Mallard when it is put. I think it is a bad amendment. I think it is one that was put up with the best of intentions and that it does mimic precisely the bill as introduced. It is not that the Hon Trevor Mallard has made some foolish suggestion; it is just that with the benefit of examination and the benefit of international experience or international comparison we think we have a better way forward. For that reason I think the amendment in the name of the Hon Trevor Mallard should be resoundingly defeated. 
The question was put that the following amendment in the name of the Hon Trevor Mallard to clause 4 be agreed to: 
to omit from paragraph (a) of the definition of “politically exposed person” “in any overseas country”. 
Amendment not agreed to. 
Part 1 agreed to.