McKelvie IanIAN McKELVIE (National—Rangitīkei): It is a pleasure to take a call on the Anti Money-Laundering and Countering Financing of Terrorism Amendment Bill at its second reading. The select committee stage of this bill was very interesting in that we all I guess concurred on the eventual outcome of it; it was how we got there that was very interesting. The thing that interested me most was the different questions that were asked by different members of the Law and Order Committee. One who was particularly active in the course of that select committee process was Barry Coates. He spent a lot of time raising issues that were quite pertinent as it turned out to the course of the select committee process. So the select committee process for me was an interesting one. It was quite a long one actually and our chairman Kanwaljit Singh Bakshi did a great job of chairing that committee and taking those submissions through their process.But I want to talk about a couple of submissions specifically and one of them is the submission from the racing industry. If you think about money-laundering it is one of the oldest crimes known to man—or woman for that matter—and the racing industry throughout its history has been one of the places that was a very easy place to launder money in that it was one of the earliest forms of gambling that we had in this country and one of the earliest forms of bookmaking that we had in this country. So there were two forms of gambling that took place in the racing industry: the legitimate one and the illegitimate one. The legitimate one is easy to track; the illegitimate one is almost impossible to track.But none the less the thing that interests me most about the racing industry is that you or I—sorry Mr Deputy Speaker—anyone in this House could go along and put a small bet on a racehorse and could come away with a return in excess of $10000. If you did that—and you could actually do it if you were fortunate enough if you think about it for $5; you could put a $5 bet on a racehorse and come out with a $10000 dividend. In the event of that you would end up being subject to this Act. You would then be part of the disclosure scheme and you would for ever be part of the records or the history of this country. I guess that that is one of the things that concerned me the most—that from a racing industry perspective the Act picked up people when they were paid out as well as when they paid in. If you put $10000 on a horse for example you would expect to be picked up in the course of this legislation; if you put $5 on it and took $10000 out you would not necessarily expect to be. I think that was an interesting issue for me.The other thing that was raised in the course of this submission was the amount of time that is allowed in order to comply with this bill. That is very challenging for the industry because if you think about its technology the only way you can monitor those bets—and there is a large number of them—is through its technology system. It needs time to bring that technology up to date and to be able to get it to comply so it was concerned about that.The fortunate thing about the industry's situation and I think a number of other situations is that the Minister of Justice does have the ability to grant exemptions around the time-scale of this thing. He or she also has the ability to grant exemptions around other bits of this bill too. I do not think for a minute we should be giving exemptions out too freely but I do think it will be necessary in the course of the implementation of this bill for some exemptions to be made to enable organisations and businesses to comply because it is a very complicated thing.I want to get on to another submission that I thought was equally as interesting actually from Farmlands Co-operative Society Ltd which is a large farmer cooperative and which made quite a compelling submission although a little bit of that submission was outside the context of the bill. Its submission was based around customer due diligence and the fact that its shareholders because they are the owners of the company became part of the compliance of this bill. It was very concerned about that. If you think about the conservative old person who might be a member of Farmlands they are not that keen on having themselves exposed to some kind of Act that may well eventually involve them in some kind of perceived criminal activity. That was an interesting submission. The select committee got through that and in fact it again is not altogether relevant to the bill. But it was an interesting submission that Farmlands made and it also has I think the potential to be part of any exemption that might be granted in the future.There were a number of other submissions that were very interesting including one from an accountant in South Auckland who explained at length a whole lot of alternatives to the bill—Andrew Bayly: Pukekohe.IAN McKELVIE: He was from Pukekohe. Exactly. One of yours I think. He must have been one of Bayly's—he was very complicated. He made a number of submissions around the fact that he thought there were alternatives to this that could very easily short-circuit the system and save the country a lot of money—or save the accountant a lot of money I think. But that was also ruled out.A lot of the submissions we heard reminded me very much of a film called The Sting. For those of you who have seen The Sting I thought it was an amazing film. It was one of the most exciting ones I have ever seen really. But it is a little bit like what this is all about. Whilst I realise the serious side of this—and as the two previous speakers pointed out there are a lot of challenges around how we are perceived internationally and the fact that if we enable people to effectively launder money in any way through this country it is not in our best interests or in the country's best interests. But none the less it sort of brings connotations of these kinds of those things like The Sting for me and whilst I realise the seriousness of it it is a bit interesting.The bill really is designed to halt criminal activity in every way. We had a lot of discussion around the alternative forms of criminal activity. Amazingly for me it involves everything from buying artwork for half the price of what it is worth and moving it on—you can get involved in anything like that. I was quite surprised actually at some of the lengths people go to launder money.The other thing that was apparent through the course of this bill was the fact that the Police have a financial intelligence branch. I guess its role is to investigate all of this sort of stuff and pick up the issues that create the most difficult challenges for it. It was interesting to think of some of the ways it might look at this and it was a very challenging situation for the Police. Obviously this money-laundering allows criminals to fund their lifestyles. It is very difficult for them I think to get away with a lot of these things but none the less this bill will bring it into line.I think the bill strikes a balance between combatting crime minimising the cost of compliance and meeting international obligations. While I do think there are initially some onerous obligations put on things like the racing industry and you could argue even on our accountants and lawyers on the whole it enables us as a country to meet international obligations and to get on top of—[Bell rung] that is fortunate—the potential for crime and the potential for our international reputation to be damaged. I think we have done a pretty good job at the select committee. I think the chairman has done an outstanding job of chairing the select committee and getting the bill to this point. I look forward to the discussion as it moves on through the House in the next two stages. Thank you.