McClay Todd: Anti-Money Laundering and Countering Financing of Terrorism Bill — Second Reading 
McClay Todd: Anti-Money Laundering and Countering Financing of Terrorism Bill — Second Reading 
[Volume:657;Page:6896] 
TODD McCLAY (National—Rotorua) 
: 
 It gives me pleasure to rise to speak on the Anti-Money Laundering and Countering Financing of Terrorism Bill. Before I do as it is the first time that I have had an opportunity to speak today as the member of Parliament for Rotorua I mention how greatly saddened I was to learn of the death of Sir Howard Morrison. Sir Howard was a great great man and his passing will be felt widely not only in Rotorua but also I believe around the world. He was an exceptional entertainer a real statesman and a man who led by example. Rotorua has lost one of its proud sons today. Along with other members of the House my thoughts feelings and sympathy go out to Sir Howard’s family at what must be a very difficult time.  
The bill before us today after having come back from the Foreign Affairs Defence and Trade Committee is very different from when I first stood in the House to speak about it at the first reading. That is because the committee took the position and the approach that the legislation should not be overly prescriptive and it should not provide additional burden and cost upon those who would implement it. We asked whether there could be a better approach. There has been a lot of soul-searching but in a very short time frame we came to the position we see before us today and I recognise the work that all members of the committee put in.  
I noticed that there was a lot of self-congratulation from the Opposition earlier. I would say that if it was as simple as Labour members suggested they might have introduced such legislation. Indeed as the Minister said they might have drafted legislation before the last election put it in adopted it and of course we would have already been meeting some of these obligations. Having said that I point out that our chairman John Hayes worked very hard as did all members of the committee. There was quite some consensus. I would say in relation to the Opposition members of the committee who have just spoken that we worked well together. They have a very good understanding of the issue and where we ended up and it was good to hear them speak tonight in comparison with those who spoke earlier who perhaps did not spend as much time focusing on the issues and therefore there was a lot of rhetoric as opposed to forward movement.  
What does this legislation do? What did the committee decide in the end? Well it decided that it must be future-proof. We do not want to change it again in a hurry. It should be risk-based so that we can minimise compliance cost and so that a great cost is not imposed not only on financial institutions but also on those they serve—their customers. As far as possible it should be similar to the Australian legislation. Our approach was not to reinvent the wheel but to look at the good things that are happening in Australia and where our laws and systems were similar to see whether we could emulate them and there were a lot of areas where we could.  
I want to touch very briefly on a number of issues. I do not want to speak on this bill at great length tonight. I believe that the sooner we get it into law the better we will be and the safer we will be from people who would launder money—in particular drug dealers and others who prey on those in society who are more innocent.  
We looked at a risk-based approach and I will give one example that showed the committee very clearly why it was important for us to make these changes. Let us say that a bank has a relationship with a customer who is say a lady in her 70s or 80s who has always banked with that bank perhaps for 40 years. As the legislation was drafted when it came into force the bank would have had to do additional due diligence on that elderly person. She would have needed to prove who she was where she was living and so on. A cost would be involved in that and it would mean that possibly every single bank customer in New Zealand would receive a letter asking for additional information. The bank knows who that lady is; it has had a relationship with her for 40 years. Therefore if all she does is get a pension and pay her rent and nothing greatly changes how would she be a risk? The risk-based approach that will be possible under this legislation allows a bank to do additional due diligence and collect more information on that lady only if her relationship with the bank substantially changes. So if instead of having just the pension she shows up with $1 million in cash from having done really well at the casino or something like that then it would do additional due diligence on her. I think that is a very good approach.  
I too would like to recognise the officials who worked closely with representatives of the banking sector to help us get it right. It is a very good piece of legislation. We have changed it greatly. It was good to have the Opposition onside. I am sure that my colleagues and I worked harder than they did although they worked very hard none the less. I am glad we have brought the bill here and I am happy to support it. Thank you. 
Bill read a second time.