Power Simon: Anti-Money Laundering and Countering Financing of Terrorism Bill — First Reading 
Power Simon: Anti-Money Laundering and Countering Financing of Terrorism Bill — First Reading 
[Volume:655;Page:4768] 
Hon SIMON POWER (Minister of Justice) 
: 
 I move  
That the Anti-Money Laundering and Countering Financing of Terrorism Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Foreign Affairs Defence and Trade Committee that the committee present its final report on or before 15 September 2009 and that the committee have authority to meet at any time while the House is sitting except during oral questions and during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 187 and 190(1)(b) and (c). 
Like the recently enacted Criminal Proceeds (Recovery) Act 2009 the Anti-Money Laundering and Countering Financing of Terrorism Bill is an important part of the fight against organised crime. This Government recognises that those who reap profits from crime are not always the ones who are arrested and held to account by the courts. Conservative estimates put the proceeds of domestic crime at between $500 million and $1 billion every year. This bill will work in concert with the Criminal Proceeds (Recovery) Act by giving law enforcement agencies the right tools to detect and trace criminal profits. Organised criminal groups in New Zealand use sophisticated commercial and financial tools as part of their criminal offending. 
Every member of this House is aware of the destruction caused by the production and sale of methamphetamine—P. This bill will reduce the impact of drug-related crime on our communities by giving authorities more stringent powers to deal with money-laundering in the illegal drug trade. Some may argue that money-laundering is not a problem in New Zealand but unfortunately this is not the case. Last year I am advised New Zealand was used by an offender to launder almost $120 million from Australia through New Zealand and into Vanuatu. 
The Anti-Money Laundering and Countering Financing of Terrorism Bill is also about enhancing New Zealand’s standing on the international stage and increasing confidence in our financial system. As a member of the Financial Action Task Force New Zealand is committed to having a world-class anti - money-laundering and counter financing of terrorism system. Now more than ever our trading partners are looking for stable safe economies. The G20 leaders stated in February that they expected countries around the world to implement adequate anti - money-laundering and counter-terrorist financing systems. 
The bill’s new powers penalties and law enforcement improvements will allow our law enforcement agencies to tackle sophisticated transnational organised crime head on. We are also able to contribute to international intelligence gathering by reporting suspicious transactions through the global network of financial intelligence units. The bill works by requiring businesses that deal with the public to put in place systems that prevent or detect transactions made by those seeking to launder crime-related money. It sets out a number of “know-your-customer” requirements and record-keeping obligations for financial institutions and casinos and obliges the financial sector to report all suspicious activity to the Financial Intelligence Unit. 
For the bill to be a true success New Zealand’s financial institutions and casinos need to work alongside law enforcement agencies to fine-tune their anti - money-laundering systems. The bill provides a flexible and risk-based set of obligations so that businesses can use their discretion to direct resources to the greatest risks. The Government recognises as I know the previous Government did that the bill will place additional costs on New Zealand businesses at a time when many are coming under strain. However without this bill we could face increased costs for Crown borrowing and higher thresholds for New Zealand businesses trying to access international capital as well as the higher interest rates that may follow such increased scrutiny. 
The Financial Action Task Force has been given a new strong mandate by the G20 and is aggressively pursuing its goal of compelling compliance from reticent States. New Zealand stands in real danger of being publicly criticised for its lack of progress to date. This bill will demonstrate New Zealand’s dedication to global anti - money-laundering and counter-terrorism financing efforts. The obligations set out in the bill are based on international best practice and standards developed by the Financial Action Task Force and the Basel Group of bank supervisors. This bill will help protect and enhance New Zealand’s reputation as a stable and preferred place to do business. I commend this bill to the House.