Nash StuartANTI-MONEY LAUNDERING AND COUNTERING FINANCING OF TERRORISM AMENDMENT BILLThird ReadingDebate resumed.STUART NASH (Labour—Napier): I stand in support of this bill. Labour will support this bill for a number of reasons mainly because this is about our international reputation. It is about the integrity of our financial system and making sure that the bad guys cannot do business here—that is the bottom line—but I will elaborate a little bit on that.The concerns we do have—and I will express these concerns—are not about the substance of the bill; they are about the process that we have gone through to get to this stage. The thing about this is that in July 2015—it is a couple of years ago now more than 2 years ago—officials actually advised the Minister of Justice Amy Adams to begin work on policy to implement these reforms. The thing is that the Minister went against that advice. I have absolutely no idea why. When officials say Hey this is really important. This is something we need to get up on the legislative agenda." you would think the Minister would take that seriously. But no she went against that advice.Then what happened is we had the Panama Papers and we all know the story behind that. We were exposed—well we were not so much exposed but in the global financial market place whether it is reality or perception we can argue about whether we were corrupt or whether we were not but the bottom line is that it was reported in the global press that we were an easy target.Hon David Parker: And we were.STUART NASH: "And we were." says Mr Parker and he knows. He is one of the lawyers who has been dealing with this—not in setting them up but in exposing this. [Interruption] Ha ha! I just need to get that on the record. But the thing is what was happening is that lawyers involved in setting up these trusts were actually going overseas and saying: "We can hide this for you. We can do this. We can make it happen." Whether that was the reality or not it was reported globally that we were an easy touch and that is a really bad thing. That is a really bad thing. This was significant and it should have been absolute high priority. We all know—and those who have followed this debate will know—that this was subject to serious questions of the then Prime Minister John Key for about 2 months. We went hard because this was wrong—not only Labour but the Greens and New Zealand First as well—and because of the exposure it got in the media he came out and made promises about this. He said he would do it. Then there was another scandal involving one of the other Ministers and it sort of slipped off the agenda. It sort of slipped out of the public consciousness and like most things John Key did it sort of slipped away under the radar and something else came up. But that is wrong.Then what happened is that the Government or the Prime Minister or the Minister of Finance appointed John Shewan to have a look at this and he came up with—The ASSISTANT SPEAKER (Lindsay Tisch): Tie it back into the bill.STUART NASH: Well I actually—OK I will. Thank you very much Mr Assistant Speaker.The ASSISTANT SPEAKER (Lindsay Tisch): I have not heard about the bill yet. I have heard about other things but it would be really good to hear—STUART NASH: I am just—I am nearly there. But John Shewan who has a formidable reputation suggested that this legislation must be passed by 2016. He said that this was important to New Zealand's global reputation—that we get it out there. But when I say "global reputation" it is important to the integrity of our financial and non-financial system. Well 2016 came and went. And where we are is we are within 2 weeks of rising in 2017 and now we are doing it. In fact it is rushed through. We did the Committee stage last night. We did the second reading on Tuesday. This should have been here earlier. One thing that I would like to say is that this is—you know I am not doubting it—complex legislation; of that there is no doubt. It is complex and it does take time but that does not mean that it slips off the agenda in the way that it seems to have done. It needed to be in the House earlier—but anyway here we are and we are doing this.So whom does the legislation apply to? It applies to lawyers accountants real estate agents the Racing Board and other high-value dealers. Why are we doing this? Well as mentioned it is to preserve the integrity of our financial and non-financial system. What is the issue? How broad is this issue? Well I can say that in 2016 police research showed that loopholes were responsible for about $1.6 billion in laundered money per annum—$1.6 billion. That is a lot of money coming into New Zealand and being laundered. Twenty-six percent of the cases that the police identified involved accountants and more than 50 percent of the cases involved property deals. So in essence what was happening was the bad guys were coming in here with their dirty money and they were buying houses commercial properties and laundering money. It was very easy to do and we have got to stop it. We have got to stop it and this is what this legislation does.So how are we going to stop it? There is a set of regulations that are being drafted at the moment. The Ministry of Justice the New Zealand Police the Department of Internal Affairs the Reserve Bank and the Financial Markets Authority are working on a set of regulations that will—well technically they will begin to be drafted even though they are working on them once this bill receives the Royal assent which is after the third reading today. So today it will receive the Royal assent. Regulations will begin to come into place; they are being drafted now.The concern we have and the thing that came up a lot in the Law and Order Committee is the time frame that these organisations—you know lawyers real estate agents high-value dealers and accountants—had between when the regulations came into force and when they had to comply. A lot of the submitters said that they just did not have the time. We thought long and hard about this. We thought that the Racing Board was probably hard done by and the reason I say that is that it was informed. The Racing Board was informed in 2014 that this was coming up so it knew about it. When it approached the Ministry of Justice and said "What's this going to look like?" the Ministry of Justice said: "Hold tight tai ho—we'll let you know sooner. We'll let you know what it's going to look like but don't worry about it." The thing is that it waited because it knew this was coming. I mean this has been signalled; do not get me wrong. This coming in is no surprise but the Racing Board did not know what the regulations were going to look like.I was actually in favour of a Supplementary Order Paper to extend this for the Racing Board. It has been hit with health and safety and it has been hit with earthquake-strengthening costs. So this will impose quite a strong cost on the Racing Board and my personal view is in fact that we should have extended this for it. But for lawyers and accountants and real estate agents—it is a different game for them. My understanding is the Law Commission has gone around the country and advised its members what to look out for and what to expect. But what we are requiring is these non-financial professionals—you know lawyers and accountants—to put in suspicious activity reports. In essence what that is is to inform officials when they see suspicious activity. There is a definition of suspicious activity in here. We talked long and hard about—Jono Naylor: Go on. Read it to us.STUART NASH: —client privilege and all this sort of carry-on. Mr Naylor if you are keen to know what they are I am more than happy to give you about 150 pages worth of submissions to read—and go hard; go hard.But the thing is we are putting the onus on these organisations and individuals to be diligent when deals come across their desks that look dodgy. And even though we have preserved the right of client professional privilege we have outlined when privilege exists and when it does not exist and when it can be used and when it cannot be used but also when that can be objected to and that is by going to court.There is also something that we looked long and hard at and we debated about it in the Law and Order Committee and submitters were very eloquent in their objection to it. This was the sharing of information. In the way the bill was initially drafted we gave officials the right to share information across jurisdictions and across agencies. In the end we withdrew officials' right to share information and elevated that right to ministerial level. The reason we did that is we felt that if we were going to allow the sharing of information across agencies it needed to be done at the ministerial level; it needed to go to the Privacy Commissioner just to make sure that it was done correctly; and it also needed to go to other agencies that may be affected—we did not say "shall be affected"; we said "may be affected"—to make sure we had got this right. The bottom line is we need to stop the bad guys from doing dirty deals in here but we also need to preserve the right of people who are not doing dirty deals to have their information protected. This is fundamental to the financial system in this country—of that there is no doubtIn my last 20 seconds what I would say is what a 24 hours—what a 24 hours. What a week in politics. What a game-changer. We came here the Government was bubbly it was ready to go and what happened? It ends the week—it is flat. It is flat because Labour has got a new leader the game has changed and we are in the game again and we are going to take it back and the Government knows it. Bring it on! Bring on the election I say.Debate interrupted."