Pugh MaureenMAUREEN PUGH (National): It is my pleasure to stand tonight and speak to the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill in its second reading. This bill was considered by the Law and Order Committee under the careful chairmanship of Kanwaljit Singh Bakshi—Andrew Bayly: Very good chair.MAUREEN PUGH: Very good chair. The current Act is phase one of the changes brought in and applies to the sectors that were at the highest risk of being exploited by criminals. They were the banks the casinos and a range of financial service providers. That was the first step in closing the gaps that had the potential to provide opportunities for criminals to launder their money.This bill is a further step in helping to protect our businesses and also in ensuring that New Zealand's reputation remains of the highest standard and that we maintain our position as one of the safest places in the world to do business. This bill is phase two and it extends the regime to lawyers conveyancers accountants real estate agents racing and sports betting and some businesses that deal in high-value goods such as art jewellery high-performance cars boats etc.The committee heard from a range of submitters and from those in the affected sectors who were generally in support of this bill. However some submitters were concerned about the time frames that are proposed in this bill for them to develop the systems that are required and to have them in place in time to meet these required time frames. We did discuss this at some length and we felt that because the time frames are being phased in over the various sectors it does give those sectors different implementation dates by which time they have to meet their obligations. It provides sufficient time for them to implement these controls and to train appropriate staff.For example the New Zealand Racing Board—its implementation is phased in to be the last of the organisations which is 1 August 2019. Given the number of small racing clubs around New Zealand the committee felt that this sector required more time to implement its systems. Lawyers and conveyancers—their implementation date is 1 July 2018 accountants by 1 October 2018 and real estate agents by 1 January 2019. This phased approach also allows for teams within the ministry to work with the various sectors to help them as they are staggered to set themselves up and to meet their obligations.It was also important to the Law and Order Committee when we were looking at the time frames that New Zealand is not disadvantaged when we are evaluated by the Financial Action Task Force in 2019 because this could have a direct effect on our international trade reputation. This bill means we are able to meet our international obligations and it is important that we remain a good and honest place to do business. The act of laundering money is the way in which criminals clean illegally earned money—dirty money gained through illegal activities like the sale of drugs the sale of stolen property. The estimated amount of these illegally sourced funds is in the vicinity of about $1.3 billion such is the scale of this dirty money being laundered through legitimate businesses in our country. So it means that these criminals are then free to reinvest their clean money back into their illegal activities or terrorism activities. The Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill will make it much more difficult for criminals including international criminals who may have looked to New Zealand as a place to launder their money.The businesses and organisations that this bill applies to will be obliged to report suspicious activity or cash transactions over a level set by regulation—for example cash transactions of $10000 or for the New Zealand Racing Board bets of $6000 cash. Lotto is even restructuring its business to meet a $6000 threshold. There is also a requirement for relevant entities to conduct due diligence and the degree of due diligence is determined by the level of risk. There are three levels of due diligence: simplified standard and enhanced. So for example a State-owned enterprise Crown entity bank licensed insurer local government or any other low-risk entities would require simplified due diligence. This bill is a big step in protecting our businesses here in New Zealand. It certainly helps to prevent criminal activity and to prosecute those criminals. It tightens the systems used by criminals in the cleaning of their illegally sourced money. This bill protects New Zealand's integrity and I commend it to the House.