Adams AmyANTI-MONEY LAUNDERING AND COUNTERING FINANCING OF TERRORISM AMENDMENT BILLFirst ReadingHon AMY ADAMS (Minister of Justice): I move That the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill be now read a first time. I nominate the Law and Order Committee to consider the bill and at the appropriate time I intend to move that the bill be reported to the House by a date that is 4 months and 1 day from the date the bill receives its first reading.Money-laundering is the lifeblood of many types of crime. By exploiting unsuspecting businesses and channelling money through different layers of the financial system money-laundering allows criminals to fund their lifestyle and fuels their criminal ventures. People who finance terrorism use similar methods to channel money to violent causes. We are changing the law to improve our ability to detect and deter money-laundering. This will mean less crime and fewer victims. It will help protect legitimate businesses and it will help preserve New Zealand's international reputation as being corruption-free and a good place to do business.Currently the Anti-Money Laundering and Countering Financing of Terrorism Amendment Act applies to banks casinos and a range of financial services providers. When the Act was being developed those sectors were considered to be at the highest risk of being targeted by enterprising criminals. However criminals change their laundering techniques over time and establishing controls in one sector often increases risks in others where there are fewer checks and balances.This bill is an important step in protecting our businesses' and our country's good reputation. It will extend the regime to lawyers conveyancers accountants real estate agents racing and sports betting and some businesses that deal in high-value goods such as jewellery motor vehicles arts and antiquities. Now that more traditional laundering methods are less available since phase one of the Act came into effect these phase-two sectors are increasingly at risk of being targeted by criminals seeking new ways to launder proceeds of crime according to analysis from the Police's financial intelligence unit.This Government recognises that law changes in this bill will however affect everyday business and law-abiding New Zealanders. Our goal is to make sure the regime is as effective as possible while minimising the impact on businesses and their customers. We need to address the real risks money-laundering and terrorist financing impose while also ensuring compliance costs are as low as possible. This is why we have consulted with affected sectors and have released an exposure draft of the bill to see how the proposals would affect business. We have heard that the incoming sectors broadly support the reform but they need assistance from the Government to comply. The Government has been listening and it is committed to investing in support for these new sectors so that they can battle money-laundering and terrorism financing.The sectors also had concerns about the cost of compliance. Initial estimates had placed business compliance costs at $1.6 billion over 10 years. My officials conducted workshops across New Zealand gaining a better understanding of the various sectors in order to work with them to reduce compliance costs. This has significantly reduced the estimated business compliance costs. The original estimate of up to $1.6 billion over 10 years has been lowered to now being between $800 million and $1.1 billion over 10 years.I would like to touch briefly on a number of key proposals that the bill makes. The implementation period will be staggered for the different sectors initially focusing on those highest at risk of being used by criminals. A phased approach will ensure businesses are well prepared to comply with the regime. The bill will also enable greater flexibility to share information to meet the purposes of the Act including ways to facilitate information flows between the Government and the private sector. Improving information sharing addresses recommendations made in the recent Government inquiry into foreign trusts by John Shewan.The Shewan report also highlighted some gaps in the reporting regime. The Act currently requires businesses to report only suspicious transactions. This bill extends the reporting requirements to include when entities notice suspicious activities even if the customer does not make a transaction. This change will ensure that valuable information for detecting crime is passed on to the Police's financial intelligence unit.The Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill is also important as it will implement the international standards set by the Financial Action Task Force on Money Laundering an international Government forum of technical experts on anti - money-laundering and countering financing of terrorism. Our system will be assessed for effectiveness by the financial action task force in 2020 and the results of the assessment are likely to have an impact on New Zealand's international reputation. I commend this bill to the House.