McClay Todd: Anti-Money Laundering and Countering Financing of Terrorism Bill — In Committee 
McClay Todd: Anti-Money Laundering and Countering Financing of Terrorism Bill — In Committee 
[Volume:658;Page:6947] 
TODD McCLAY (National—Rotorua) 
: 
 I rise to speak on Part 3 of the Anti-Money Laundering and Countering Financing of Terrorism Bill. Part 3 deals in particular with enforcement. I want to focus on two provisions concerning civil penalties. 
Clause 72A is about the protection of supervisors of anti - money-laundering and countering financing of terrorism and the obligations of those supervisors. I believe that this is particularly important because it means that no civil or criminal proceedings may be brought against supervisors when they are conducting their duties. This means that when there is an issue before a supervisor—the supervisor is investigating something—those whom the supervisor is investigating cannot spuriously put obstacles in the way to stop the supervisor’s work. It means that the supervisor can go about his or her duties without fear of interference from civil prosecution. However the bill also states that where the supervisor has acted in bad faith then he or she can face censure or penalty. 
I also want to talk about Subpart 2. In particular it is directly relevant to civil liabilities. Clause 76 states that where the anti - money-laundering and countering financing of terrorism requirements are not met by a reporting body then it could be liable for prosecution. This means that when it fails its due diligence when it has not done enough work it can be prosecuted. In particular when we look at this provision we see that it suggests that a reporting body’s due diligence must be done in such a way that it can be assured of the nature of the person whom it is conducting business with. 
Subpart 1 deals with the issue of what reasonable due diligence is and I think that this is also important to look at. It means that reasonable due diligence would not be intrusive or unnecessary and could be risk-based. We know that a number of New Zealand banks and Australian banks have adopted a risk-based approach to their consideration of this. 
To summarise I want to draw attention to what this really means. If someone has had a relationship with a bank for quite some time and that relationship has not changed then the changes to the bill mean that a bank would not have to do additional due diligence on that person and I think that that is reasonable. But in the case where the relationship does change then it would be upon the bank as a reporting body to do additional due diligence. Let us say that someone has had a bank account for quite some time and has small amounts of money going through that account such as a few hundred dollars a week. And let us say that all of a sudden we find that person might have a patch on his or her back have a new motorcycle and have thousands and thousands of dollars going through the account. One could assume that that person was involved in P and selling P and may be a gang member. 
In such a case the bank would not merely be able to say that it has known the person for a long time that the person has had an account with the bank and that therefore the bank does not need to do any more due diligence. Should the bank not conduct further inquiries and report it could be liable for prosecution. I support this part of the bill along with the rest of the bill and cannot wait for it to enter into law. Thank you.