Locke Keith: Anti-Money Laundering and Countering Financing of Terrorism Bill — Third Reading 
Locke Keith: Anti-Money Laundering and Countering Financing of Terrorism Bill — Third Reading 
[Volume:658;Page:7104] 
KEITH LOCKE (Green) 
: 
 The Green Party supports the Anti-Money Laundering and Countering Financing of Terrorism Bill. We were part of a very thorough select committee process that dramatically transformed the content of the bill to use a risk-based approach. We worked closely across all parties and with the banking sector and the final result is a risk-based system that is fairly close to that applied by Australian banks. In the final analysis that means that instead of banks having to run around getting multiple sources of identification from low-paid workers beneficiary customers and people who are more transient and wasting all their time on people who would not even have the resources to be money-launderers they are now able to concentrate on the people who really are a problem. 
This legislation will reduce money-laundering. In the Foreign Affairs Defence and Trade Committee we were presented with examples of the ways in which people shift money around from country to country from the Pacific Islands to Australia and New Zealand. Those people get a big tax advantage and other advantages by shifting the money around through dummy accounts. This bill will improve that situation and increase tax receipts for the New Zealand Government the Australian Government and Governments of the Pacific Islands in our region. The implementation of such procedures as a result of the Financial Action Task Force proposals has reduced money-laundering corruption and funny-money sorts of dealings in some of the smaller Island States including in the Pacific. 
The bill probably has not gone far enough to really deal with one of the problems that is at the core of the current financial crisis which is the huge amount of money in tax-haven countries attracting not much tax at all and in fact denying the home countries of the particular investors the deserved tax take.  
New Internationalist 
 magazine estimates that $11.5 trillion or $11500 billion are in tax havens which equates to a huge amount of tax that could be of benefit to those home countries particularly poorer countries. But it is disappearing into the private pockets of multimillionaires or billionaires. I am not sure that the Financial Action Task Force referred to in this bill will fully deal with that situation partly because the Financial Action Task Force itself is an organisation of rich counties. It is specifically not a UN organisation; it is an OECD or rich-country organisation. There is probably some way to go before we really deal with that problem that is hitting the world in terms of the financial crisis. It is true that the work of the Financial Action Task Force is reducing corruption internationally and I suppose one of the aims from a rich investor’s point of view is to make countries safer for investment to reduce the overheads in terms of corruption in particular countries. It is a good thing that corruption is being reduced. 
The other element to the bill which is in the title of the bill is countering financing of terrorism. Exactly how that will work is a bit unclear. We do not have a large number of terrorists in New Zealand at the present time and one of the problems when I asked— 
Hon Trevor Mallard 
: Depends if you ask the Chinese or not. 
KEITH LOCKE 
: Ha ha! Yes. I asked the officials which terrorist lists are used to filter the banking transactions and they said that basically the American lists are used. The American list is pretty big; there are hundreds of thousands of people on the list. We had a case a few years ago of a chap up in Auckland Mohammad Abbas who was sending money to his sick relatives in India from Auckland through Western Union. Somehow it all got checked in America on the way through and he had a hell of a job getting the money to his relatives because there was somebody else on the list called Mohammad Abbas. It is a fairly common name in the Muslim world. That is an illustration of some of the problems that one can come up against. 
One of the other aspects that we were talking about in the select committee was the way financial transactions are done internationally. They all pass through what is known as the SWIFT system which is a system that has two very big data-processing centres one in Europe and one in the United States that mirror each other for 124 days before the information is stored in a back-up facility. The European Governments had a problem with SWIFT—and they have partly solved it now. There was a big battle between the US and the EU over what happened at some of the data centres sitting in the United States. The US Treasury asked for information from SWIFT on this that and the other thing and they were doing what was described by the Europeans as carpet sweeping. They were getting a whole array of information on transactions without particular targeting of people who they could prove were a terrorist danger. Some of the information they were seeking was not related to US transactions—that is transactions originating or finishing in the US—sometimes it was related to internal transactions within European Union countries. The European Union countries were a bit upset that some of their internal transactions were being demanded by the United States Government through the SWIFT system. 
Most of New Zealand’s banking transactions and reconciliations go through the SWIFT system with all the details—the name the amount etc.—attached to them. There are still possibly a few problems to be worked out there in terms of privacy and in terms of which terrorist definition one applies when one filters the financial transaction information etc. The Green Party despite concerns about that dimension of it does support this bill as a good way of combating the scourge of money-laundering and the criminal activities that go with it.