Wood MichaelMICHAEL WOOD (Labour—Mt Roskill): It is a pleasure to take a call on the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. Like my Labour colleagues before me I am rising to speak in support of the bill and I will try to make my contribution a little more fulsomely than members opposite have made. We have had some marathon speeches stretching up to nearly a minute from the members opposite but I actually think the provisions within this bill are important enough that this House reflects upon (a) the reason why we are talking about this issue and (b) the mechanisms within the bill to achieve the objectives that we want to get to. Let us start off by talking about the raison d'être—that is to deal with the scourge of money-laundering that has afflicted our country over recent years and not just our country but many jurisdictions around the world. There are pretty serious international estimates that put this pool of black money that washes around the world in the hundreds of billions of dollars. It is money that is often from the proceeds of crime fraud and the drug industry that is looking for bolt-holes—looking for places to go that are not particularly transparent so that that money can be washed clean and then used for further criminal enterprise. As of course the title of the parent Act points to often that money can land in some pretty dark places including the funding of terrorism and pretty appalling events in difficult parts of the world. The problem was brought to our attention pretty starkly last year by the revelations that came out of the Panama Papers particularly the machinations and the behaviour of Mossack Fonseca. After a lot of delay and a lot of pressure form the media the public and the Opposition the Government did act on that issue and what is really encouraging for me is that after we finally got legislation to deal with the foreign trust issue to open it up and to apply a level of transparency that has some compatibility with what is in this legislation we actually started to see organisations such as Mossack Fonseca leaving the country. Those have gone now because this House after delays that went on for too long finally did act and put some transparency into that foreign trust sector. That was to the benefit of this country and that is what we are looking to do in this bill. One of the core issues in this area for New Zealand is our international reputation as well because this is a Western democracy that prides itself on the rule of law prides itself on good relationships with other countries and prides itself on behaving in essentially a moral way. Yet we cannot stand up and say that we are holding to those things if we leave ourselves open to that wash of dark money coming into this country potentially being cleansed and then heading back out into the world to do goodness knows what. So dealing with this area is extremely important. Hon David Parker: Why don't they ban foreign buyers? MICHAEL WOOD: Why do they not ban foreign buyers? Well there are lots of things we could do Mr Parker but this Government is making a start here. It is making a start and I am sure the next Labour Government will do even more. The original legislation which we are amending here did make a start. It brought certain sectors under the microscope but it left a lot that did not have any transparency. What John Shewan said when he reviewed the activity and the rules in this area was that we should as soon as possible implement phase two of the anti - money-laundering recommendations. The Government promised that that would be done by the end of the last year—that we would bring these other sectors in—because the thing about this area is that as soon as you close off one avenue the dark money looks for other avenues to go down. In fact when we did half of the job last year there were experts in the sector who sort of said: Well what you're actually doing is just creating a road map. You're saying to the bad guys 'You can't put money here.' but it pretty obviously can go over there." So these areas that have been brought in which are real estate agents lawyers accountants conveyancers the New Zealand Racing Board and that whole area of high-value dealing do need to be covered off if we do not simply want to see the dark money that we started to remove from the trust sector the banks and the casinos—although I am sure there is still work to be done on that last one—washing into there. One of the things that I think we need to examine very closely when we get to a select committee is that we have in fact covered off all of the bases. As we stand here today we can see that list and they all seem like pretty obvious targets and obvious things to be included within this bill but we need to check very carefully that there are not other avenues that that money will simply spill over into. What the bill does is set up some core obligations for these areas including the development of risk assessments the undertaking of customer due diligence account monitoring and then—really importantly—the submission of suspicious transactions to the police and the financial intelligence unit. Something I want to touch on in this area—and this spills over a little from my colleague David Parker's comments—is that whenever we are setting up new regulations we have to be very clear about their intent but we also have to be extremely careful that there are not unforeseen things that happen as a result of the legislation we are putting forward. What I want to draw to the attention of this House in this respect is that the original law the parent Act—which is supported by both sides of the House—has had some of those unforeseen effects. In my constituency and I know in a number of others there are people from the Somali community and other communities who can no longer send remittances overseas because they have unwittingly been caught up in the provisions of the Anti-Money Laundering and Countering Financing of Terrorism Act. So the quite legitimate purpose of the Act which was to prevent the sending of money to fund terrorism overseas has actually caught within it people who are actually doing no wrong—people who simply want to send remittances back to support their families and support their communities and who have quite peaceably been doing that for many many years. That is something that if there is a way I would like to explore as this process carries on. Whenever we make law we have to be extremely conscious of that. The issue of compliance costs—one raised by my colleague David Parker—is one that we should be exploring as well. There are large institutions in these sectors that can probably pretty comfortably bear those compliance costs but we have also got to be conscious that it is not just the big boys. There are potentially other players in this area and we do not want to be overburdening them with compliance costs that are not in proportion to what we are actually trying to achieve. There are some other public comments that have arisen in relation to this bill that I think we want to explore as well as we go through this process. The Law Society has made some comments about the phase-in period too. The bill proposes a 6-month phase-in period. I am not prejudging this but it is actually a pretty quick phase-in period given that there will have to be some pretty rigorous requirements and processes embedded into the practice of the organisations that will now be caught within the net of the Act. The Law Society suggested that maybe that should stretch out to 2 years rather than the 6 months that has been proposed. I think we owe it to the sector—owe it to the people who will be affected by this regulation—to give that some full consideration. Before I finish I do just want to comment about the lack of urgency we have seen on this issue. This is really important. This goes to our reputation. This goes to how New Zealand is seen in the world. The Government has sat on this issue for a very long time. It took the Minister of Justice Amy Adams over 1 year after she was briefed by the police on this issue to commence policy work—over 1 year. At the same time the media and the Opposition had been raising this issue along with the police so it was not that it was not known. When she was asked about it—and I have got the quote here I think—the Minister said that there were priorities that the Government had to juggle that that was not her responsibility and that she was not the Minister at the time so she could not really speak to it. Well the Minister of course at that time was I think Judith Collins but the responsibility rests on the Government for the fact that we have dragged our feet on this issue and that really is not good enough when these issues are of such serious import in respect of our reputation. What I might also say is that with these issues to me it also goes to the obligation we have to the law-abiding businesses in our country. They go about their business. They pay their tax. They behave ethically. We should not be leaving the net wide open for the wide boys to come in and to slosh their money around wash it and recycle it back into illegal or unethical enterprises. Having said that the Labour Party certainly is pleased to support this bill. We do think that there are issues to be explored during the select committee process and we will look forward to doing that constructively as the bill makes its way forward. Thank you."