Flavell Te Ururoa: Anti-Money Laundering and Countering Financing of Terrorism Bill — Third Reading 
Flavell Te Ururoa: Anti-Money Laundering and Countering Financing of Terrorism Bill — Third Reading 
[Volume:658;Page:7105] 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker. Kia ora tatou katoa. The Maori Party is pleased to support the Anti-Money Laundering and Countering Financing of Terrorism Bill at its final reading. We welcome the move of the House to do so in time for World Poverty Day which is coming up this Saturday 17 October. The 2009 observance of the International Day for the Eradication of Poverty focuses on the plight of children and families living in poverty which is a goal that we in the Maori Party keep very close to the heart. In the relationship agreement we signed with the National Government just over 11 months ago was a commitment to achieve significant outcomes in whanau ora through eliminating poverty. The question that we come to this bill with is how the law that we pass today will make a difference to lifting people out of poverty. 
In the context of Aotearoa the failure of many investment companies the possibility of fraudulent banking and investment practice and the lack of confidence in our financial system have robbed investors of savings and that in itself is a very good reason why this bill has surfaced. But probably the most direct impact on reducing poverty is at a global level and some other speakers have spoken about that already. An International Monetary Fund estimate back in 1998 placed the value of global money-laundering including that of corrupt funds at between $8 billion and $2 trillion annually. We are talking about huge amounts of funding resulting from the practice of bribery and corruption. That estimate is from a decade ago so we can only imagine the extent of the damage that happens now. When we start talking about trillions of dollars it all becomes a bit of a Beagle Boys operation manufacturing wads and wads of illegal notes. 
In its most basic form money-laundering transforms what we might call dirty money—that is money from crime—into clean money. Clean money has nothing to do with the crispness of the notes of course. It is all about whakapapa. You see clean money to all outsiders’ eyes looks like it comes from a legitimate source which thereby makes it almost impossible to trace the criminal origin of the money. By using this form of changing money this process of transformation criminals are able to benefit from their crimes and it becomes extremely difficult to develop a case for prosecution. It becomes even more complex when we find the menu of ways in which money-laundering can take place. I found this to be quite a matter of interest. 
The helpful Ministry of Justice website against money-laundering shows almost a beginner’s guide to money-laundering. There is something called smurfing which is the process of depositing cash across a range of institutions in amounts that do not need to be reported to the Government and then eventually transferring it all into a central account. Then there is currency smuggling which is when funds are moved across borders by mail courier or body packing as a form of disguise. There is exchanging transactions where foreign currency is bought that can be transferred to offshore banks. Alternatively prospective money-launderers could purchase assets with bulk cash which is building up an inventory of assets such as cars boats and real estate and then selling them to deposit the funds. If all else fails there are the casinos where a pile of gambling chips can be purchased and then redeemed for a big huge fat cheque. 
The more we read about it the more complex and the more sophisticated the whole industry of money-laundering becomes. Initially that seems a pretty good reason for passing legislation to make it easier to detect and investigate money-laundering activities. 
One the issues that interested us when this bill came before the Foreign Affairs Defence and Trade Committee was an observation made by the National Council of Women. It suggested that the claim that the bill will contribute to public confidence in the financial system seems contrived. Its view was that in the absence of hard evidence that our banking system is threatened by money-laundering or terrorism it is difficult to know whether the public will feel more confident if this bill is passed. Instead the National Council of Women of New Zealand saw the reason for this bill being indirectly in the public interest in terms of complying with international obligations. 
Basically the Government is obliged to pass this legislation to maintain the viability of our economy in global eyes. It is about keeping faith with the Financial Action Task Force on Money Laundering which is a body to generate the political will to combat money-laundering and terrorist financing. That last part is the real reason why so much momentum is focused around this particular bill. It is driven by American legislation such as the Patriot Act which amended the Bank Secrecy Act in response to the attacks of September 11 2001. The Patriot Act is intended to strengthen measures to prevent detect and prosecute international money-laundering and the financing of terrorism. Here ends the lesson of whakapapa. 
Having established the source and the context of why we are rushing this legislation through today in this third reading I will return to the specific impact of this legislation for us. The briefing paper from the Reserve Bank puts this bill into the context of being an essential component of the Government’s programme to tackle organised crime. That paper estimates the profits from methamphetamine and cannabis at between $1.4 million and $2.2 billion per annum. The anti - money-laundering framework will allow the flow of such funds to be tracked and seized. 
I raise a note of caution that emerged from the paper written by Dr Jackie Harvey and published in the  
Money Laundering Bulletin 
 a publication from the Newcastle Business School. It stated: “Without facts legislation has been driven on rhetoric driving by ill-guided activism responding to the need to be ‘seen to be doing something’ rather than by an objective understanding of its impact on predicate crime. The social panic approach is justified by the language used—we talk of the battle against terrorism or the war on drugs.” 
I think that this advice is useful to bear in mind when we talk about things such as money-laundering so that we focus on the crime at hand which is the fraudulent use of funds rather than on promulgating fear. As we return to the Maori Party focus on the most effective ways to eradicate poverty I cannot leave this debate without noting that our adoption of the recommendations will increase business costs to customers which will be passed on to ordinary bank customers. This is at a time when as the Finance and Expenditure Committee report makes clear banks have already been shown to be overcharging their customers. We are concerned that this legislation will place additional costs on businesses and customers when they are under the most strain. There is little clarity in the bill about the extent of these costs but it will cost and there is no doubt about that. 
The Maori Party will continue to speak out about the absolute need to address the matter of poverty. If addressing bribery and corruption will help to make life easier for the working poor and the poverty-stricken then we will certainly support that aim. We do not believe that this bill goes anywhere near an effective response to the problems of income distribution but it does make an honest attempt to ensure that we are aligned with cleaning up the international financial system. As global citizens we are pleased to support this third reading of the Anti-Money Laundering and Countering Financing of Terrorism Bill.