Power Simon: Anti-Money Laundering and Countering Financing of Terrorism Bill — In Committee 
Power Simon: Anti-Money Laundering and Countering Financing of Terrorism Bill — In Committee 
[Volume:658;Page:6940] 
Hon SIMON POWER (Minister of Justice) 
: 
 It is worth making a few introductory remarks in respect of Part 2. I will not be making any further remarks about Part 2 other than those matters that I am about to share with the Committee. 
Effectively Part 2 sets out the obligations that will be imposed on reporting entities and the new requirements for the cross-border transportation of cash. The intention of the bill is that reporting entities will take a risk-based approach to their anti - money-laundering and countering of terrorism obligations and this is the part of the bill that enables that to happen. Part 2 is large. It has six subparts and there have been a number of changes to note in Subpart 1 which requires reporting entities to satisfy themselves that customers are who they say they are and that their financial transactions are legitimate. Simply put this process is known as customer due diligence and the bill sets out different levels of customer due diligence depending on the type of customer the nature or circumstances of the transaction and broadly speaking the level of risk that is involved in that transaction. 
The changes to the bill’s customer due diligence requirements recognise some of the operational difficulties and unnecessary costs in conducting customer due diligence on low-risk existing customers. The changes also recognise that it would be difficult for reporting entities to be required to identify a customer as a politically exposed person at the point of first contact. The changes also give reporting entities discretion around verification requirements. Subpart 2 contains the detail on the reporting of suspicious transactions. It is through those reports that financial institutions and casinos will be providing the police with intelligence on possible criminal activities. There are no important changes to note in that subpart. 
Hon Trevor Mallard 
: The Department of Internal Affairs is involved and Ministerial Services. 
Hon SIMON POWER 
: I say to Mr Mallard that we should not start talking about individuals who have been or are in Parliament in that regard. 
Subpart 3 sets out the requirements for a reporting entity to keep relevant records. There are no important changes to note in that subpart. Subpart 4 concerns reporting entities’ internal policies and procedures. It requires reporting entities to have programmes for detecting and managing the risk of money-laundering and the financing of terrorism to carry out risk assessments and to review audit and report on risk assessments. There are no important changes to note in that subpart. 
Subpart 5 provides for the preparation approval and publication of codes of practice. The inclusion of codes of practice is a way to provide regulatory certainty. Again there are no real important changes in that regard. Subpart 6 replaces the cross-border transportation of cash regime in the Financial Transactions Reporting Act to include unaccompanied cash as well as bearer negotiable instruments such as traveller’s cheques. Again there are no important changes. 
I will respond to one remark made by Mr Hodgson in respect of Part 1 and I seek the Committee’s indulgence in that regard. Had he heard my preliminary remarks in respect of Part 1 he would have heard me note the contribution that new clause 3A makes to this legislation.