Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill

Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill Committee of the whole House Debate resumed. Part 1 Amendments to principal Act (continued) CHAIRPERSON (Maureen Pugh): Good morning, members. The committee is resumed. When we suspended last night, we were debating Part 1 of the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill. This is the debate on clauses 4 to 35, “Amendments to principal Act”. The question again is that Part 1 stand part. ARENA WILLIAMS (Labour—Manurewa) (09:00): Thank you, Madam Chair. Last night, we had a really helpful back and forth with the Minister around what kind of transactions would be covered by reporting entities and by people who may report suspicious activity. It was very helpful to hear from the Minister that the provision at new section 40A, I think she referred to, and at 39A(b)(i), amended by clause 7, came from feedback from the industry. I’m interested in this power for people who may report suspicious activity and whether that should be a requirement on them. Section 67A in the original Act is the powers that relate to things like gold, silver, jewellery. You might envision a situation with shops that are trading in physical goods, where a person is transacting large amounts of money but over a longer period of time than one transaction that might give rise to suspicion. My question was, for the Minister—that’s not what I’d anticipated, because the old Act does provide for provisions that relate to trade in gold and silver. But this “may report suspicious activity” wasn’t, I thought, a higher requirement or something that a requirement would be put on the sellers of these to provide information to the supervisor around suspicious activity. Can she just clarify whether her new section 40A steps back the requirement on sellers of these goods to report suspicious transactions or whether that is a new power that provides a way into the scheme, which is I think what she said last night. My other question is around her clause 7. We were on (ii) last night when we were—the questions are around at what point we are capturing the suspicious activity in a transaction that relates to one of these things which is mentioned in the actual legal Act. Any transaction which is covered by those Acts is illegal. The anti - money-laundering provisions step further into those transactions where you might need to report something that is suspicious or you might need to report something which would lead to illegal activity but is not in itself illegal. But the wording of (ii) seems to be now a higher standard than what it was. “Reasonable grounds to suspect”, and just these offences, is a broader definition than simply “a suspicious activity”. The natural meaning of “suspicious activity” is being limited here. The things which you have reasonable grounds to suspect are leading to those illegal activities. “What is the extra power here?”, is the question. Any sort of transaction which you reasonably suspected was to aid transactions which were prohibited transactions under the Misuse of Drugs Act, like dealing, would be illegal in and of themselves, so what is it extra here that is being asked of people who are either reporting entities or these extra people who are dealing in the things which are set out at 67A of the original Act? I think where we got to last night was a little bit of a better understanding about those Acts being the things that will give rise to the grounds for suspicion, but not necessarily what is extra from stepping back into a transaction or stepping after a transaction has occurred for the proceeds of a crime. Both of those parts of the transaction are meant to be captured by international obligations under anti - money-laundering arrangements that we make with the rest of the world. Are our obligations that are owed to the international community being met here by what I think is a tightening up of the definition of “suspicious activity”? CHAIRPERSON (Maureen Pugh): I’m sorry, Minister. I’d just point out to members that we’re not very tolerant of repetition. I note that that member asked a very similar question last night. But if the Minister is happy to take a call—the Hon Nicole McKee. Hon NICOLE McKEE (Associate Minister of Justice) (09:04): Thanks, Madam Chair. I was about to say that I think I did cover this all last night, but I’ll just give a little bit more if it helps the member. There is now the requirement that if somebody presents with over $10,000 to purchase something, a suspicious activity report now needs to be filled out. Now, before that $10,000 limit was put in, a lot of these agencies were already giving suspicious activity reports, but once we had the $10,000 limit, they weren’t required to do so. Effectively, we are putting in the ability for these agencies to be able to continue to deliver a suspicious activity report. It won’t expand on obligations for the current reporting entities. As I’ve mentioned, it was requested by industry. To give examples of some of the businesses that might be caught up in this, it includes auction houses—like Turners, for example—or any dealership for either new or used motor vehicles. But mainly we have changed this purely because industry had asked for it. These people used to be able to give SARs—the suspicious activity reports. We’re basically saying if they want to continue to do that, we’re allowing them to do it. We’re not mandatorily making it that they have to, but they’ve requested that ability. Of course, what comes with that is the anonymity, the ability for them to be able to report but still keep confidential their own reporting system, I guess is what we’re saying. With a suspicious activity report, they can report to the police, to the Financial Intelligence Unit (FIU), to say, “We’ve had somebody come in with $12,000 cash. We think that it might be drug money, but we’re going to report it, and then we will just step back.”, because it will ensure, through SAR, that their details are kept confidential, therefore keeping them safe. This will allow more people, as I mentioned last night, to be able to give those SARs to the FIU. REUBEN DAVIDSON (Labour—Christchurch East) (09:07): Thank you, Madam Chair. It’s good to have the further opportunity today to continue to work our way through this bill, particularly in the context of it being one of two bills and there being the potential for items covered in either to be conflated or confused through the process. It is good, and I thank the Minister for both her time last evening in the limited time we had to get started on working through this, the second of the two bills, but also to continue stepping through that this morning. Appreciating your guidance, Madam Chair, on needing to maintain the forward momentum and moving through the bill rather than duplicating questions. On that note, I’m really keen to move forward down into clause 11, which deals with the amendments to the annual anti - money-laundering and countering the financing of terrorism (AML/CFT) report, specifically looking at clause 11(3), inserting 60(2)(d), where it speaks to providing “any sector-specific information required by the AML/CFT supervisor under rules made under section 156B”. The question here, really, is around the sector-specific terminology and whether there’s a risk or a potential risk here in allowing reporting entities to not, in effect, write their own reports but potentially to create the reporting structure by which they’ll be held accountable. Obviously, if you were dealing only with good operators, then that wouldn’t be a risk at all, or the risks would be far more minimal. But the nature of this bill, which is to comply with those international obligations we have but also to ensure that we are creating a framework that catches and prevents money-laundering and illegal transactions and transacting—then the concern would be that if you’ve got a less than fully honest or a dishonest operator, the ability for them to provide that sector-specific information could potentially unfairly weight the scenario to their benefit. Therefore, it could make it very difficult for the bill to capture their activity with any degree of illegality, because they know their area of operation better than anybody else, and they have, effectively, structured the rules and guidelines around how they’re going to operate, but also, more importantly, how that’s going to be monitored or measured for breaches enforced. Really, the question to the Minister on that is: what thought has gone into preventing that happening around that provision of sector-specific information by the sectors affected by this clause in the bill? Is there a monitoring or review provision there to keep a watch on that specific element of this bill? Was there any specific advice received around whether that was adequate framework to not just detect, because that would be a retrospective step, but to actually stop people being able to evade this component, this function of the bill by creating, in effect, their own report card that they can comply with but that allows them to continue activity that would be legal or less than desirable? Hon NICOLE McKEE (Associate Minister of Justice) (09:11): Thank you, Madam Chair. The reporting structure is going to be set by the Department of Internal Affairs (DIA), and the annual reporting requirements are currently prescribed within regulations. This amendment is going to allow greater flexibility for the supervisor to issue rules in areas where it’s different or better information might be required. The DIA may add in sector-specific rules depending on what that sector is. For example, if we think about the virtual currency area, that’s always evolving, so it’s allowing the DIA to be able to set rules as things change. The reporting entities themselves cannot pick and choose what they will be reporting on; it will be set by the DIA, and they may alter those requirements by sector. They might say the banks, for example, might have one rule that they have to abide by, and a lawyer might have something else because their dealing with it is a little bit different. It’s allowing the DIA to be able to move these rules as things around us, the modernisation of organised crime, and how quickly they manoeuvre also changes. CARL BATES (National—Whanganui) (09:12): I move, That debate on this question now close. CHAIRPERSON (Maureen Pugh): That’s very optimistic of you, Mr Bates. We’re not quite there yet. REUBEN DAVIDSON (Labour—Christchurch East) (09:12): Thank you, Madam Chair. I’ll confess to being an optimist too, and an optimist who wants to continue the forward momentum through the bill, but, at this stage, as far as Part 1, clause 13, replacing section 64, which is where we get into the subject matter around the “chief executive of AML/CFT supervisor may make codes of practice”. Specifically, I wanted to look at subsection (3)(a) and (b) of the replaced section 64, in clause 13. What we’ve got here is, for context, “The purpose of a code of practice is to provide a statement of practice that assists reporting entities to comply with their obligations under this Act, regulations, notices, and rules.” Then we step into (3), where it says, “Before making a code of practice, the chief executive must consult”, and then struck out is “any persons, or representatives of the persons, that the chief executive thinks will be substantially affected by the code of practice.” That has now been replaced with 3(a), which reads “the persons or bodies that the chief executive considers may be affected by the proposed code of practice;”. The shift from “thinks” to “considers” in and of itself, is arguably immaterial, but it is a change. I’m curious to know what the thinking is behind the change of shifting that from “thinks” to “considers”. Is that something that came through in official guidance? Is that, in the Minister’s opinion, a weakening or a strengthening of the regulation or the new clause? Also here, there’s the addition of 3(b), which lists “The Minister.” It adds the Minister—the chief executive must consult the Minister. For me, that’s an interesting change because, it could be argued, that that puts the Minister in a position—depending on the number of codes of practice—of needing to, I wouldn’t use the words “micro-manage”, but potentially needing to be consulted a lot more than they would have under the previous terminology. It also puts the Minister in a position of needing to be across all of the detail all of the time, because it’s spelt out in black and white in the legislation that they have to be across that. That also runs the risk of slowing that process down, and the issue there would be, as the Minister has explained in previous answers this morning, the need for this legislation to be nimble and efficient and effective to keep pace with the speed of change that we’re seeing both in trading and in technology. Adding this extra step and this additional ministerial responsibility does, in my mind, pose the risk that the legislation is therefore less nimble and less able to pivot to meet the rapid pace of change that we’re seeing and likely to see an increase in. The question to the Minister there is: does the Minister think that will slow down the ability for legislation to be match fit in a rapidly changing environment? More broadly, I guess, where did the notion of adding the Minister into the list of entities that needed to be consulted come from? Was that a thought of the Minister’s, or was that something that came through in official advice? A detailed question but a drafting question here is why (3)(a) and (b) needed to sit separately, and whether or not the Minister could simply have been added as an addition to the list of (3)(a). By singling out the Minister and making it separate and standalone, it certainly caught my eye when I worked my way through questions in the legislation. I’m curious to know why that needs to sit out and separate from (3)(a) where it could simply have just been an additional word at the end. So those are my questions on that clause. Hon NICOLE McKEE (Associate Minister of Justice) (09:17): Thank you, Madam Chair. I think I’ll just take this opportunity, first of all, to speak to Amendment Paper 573, which is on the Table. It’s the only Amendment Paper that I’ve put in place here. I just want to explain that this Amendment Paper is taking some clauses in the bill that we discussed last evening out of that bill and placing them into this bill. It was a transfer of clauses from one bill into another, and, effectively, it’s removing some aspects that are in regulations, because we are putting them into the Act. I thought I’d just explain Amendment Paper 573 that’s been put up from the Government. Speaking to the member’s question on clause 13: having a Minister involved with oversight is not an unusual thing. I think, most importantly, this is about the codes and the guidance. The guidance is not going to be binding on people; it is just guidance. These are the codes of practice, and they’ll remain in secondary legislation; they won’t come forward into the Act, because they need to be moveable. Where did this come from? I’m advised that the Economic Development, Science and Innovation Committee amended consultation requirements in order to make it consistent and simpler, as the codes are not binding instruments, then they are closer to the guidance. Amendments that you will have seen within this paper actually came out of the select committee and I thank them for their consideration and for making the bill simpler as a result. ARENA WILLIAMS (Labour—Manurewa) (09:19): Thank you, Madam Chair. I appreciate the Minister bringing the committee’s attention to her Amendment Paper slotting in new clause 17A. The censures—she’s right. I’ve had a look at where they were in the creature of regulation—where they might have been if you were a body like the Financial Markets Authority. Obviously, one new supervisor needs a legislatively empowered single exercise of its soft power to give instructions. What that’s like, though, is really different across lots of different public entities, and I’m keen to understand that from the Minister. What were these modelled on? Are these like Inland Revenue’s powers? Are they more like the Privacy Commissioner’s powers? Because they’re not censures that have an associated enforcement infringement fee or a fine. They don’t seem to have a public record element, either. Often, a feature of censure notices or advice-finding guidance is that it is public and so there is a precedent-setting element of it that makes it fair and it builds public trust in them. Is that what’s intended here? That could be something that’s intended here, but that would be provided for in the regulation. A second species of question about these censures is: what were they before? Is this tidying up a problem in the regulation in that we did have either the Reserve Bank of New Zealand or the Department of Internal Affairs, but I suspect it was the Financial Markets Authority, providing guidance to businesses that wasn’t necessarily empowered by a piece of primary legislation about anti - money-laundering compliance. In the case which I’ve raised with her, where a fintech was notified multiple times—what were those notifications if they weren’t censures? What was the legal status of those? And are we tidying up a problem in the law here which is real—that if you have an agency giving guidance, somebody on the receiving end of the guidance should be able to clearly see whether that is binding, whether it’s enforceable, whether it constitutes an infringement? We get ourselves into the same sort of issue here, because I can’t see that her new powers create a, sort of, stick element, with the carrot of being offered some helpful guidance. I want her to help me to understand: is that coming in the regulation or are these meant to be a softly, softly, soft power? In which case, which other agency has a similar power that she’s based these on? Hon NICOLE McKEE (Associate Minister of Justice) (09:22): Thank you, Madam Chair. Clauses 17A and 17B set out on Amendment Paper 573 are creating a new supervisory power to censure. This is because we were effectively seeing that we will create guidance and expect the agencies to operate within those guidelines, but if they don’t, then—as the member had pointed out—where was the stick? The stick is the ability to censure, in writing, with those agencies that are not complying. The supervisor would be able to issue a notice of intention to issue a censure, and the person who receives it will have 10 working days within which to respond to that. What formal warnings that we’ve had do not have much of that deterrent impact, but the next layers of the court-ordered enforcement options significantly do. I don’t know so much if it’s more “softly, softly”. I would see it more along the lines of, the Department of Internal Affairs will be coming out, they’ll be issuing guidance; we need to allow the agencies the ability to figure out how to work within that guidance, and if they’re not, issue a censure; and if they continue to not fulfil their obligations, then there can be court-ordered structure after that. It’s more about just helping them get through what it is that they need to do in order to comply. ARENA WILLIAMS (Labour—Manurewa) (09:23): Thank you. Just a quick question on that: is this intended to relate to licensing requirements, then? Is it the case that someone who has been censured might lose their licence to operate, say, the Financial Markets Authority might have already given the fintech in question two different kinds of operating licences? Is it professional conduct rather than infringements that you’re relying on, and so you might assume that the regulations would then tie that to licensing? Or is it the case that someone could have been censured five times in the same year and would still be able to operate under a licensee? Hon NICOLE McKEE (Associate Minister of Justice) (09:24): It’s a very good point that the member raises, and the Economic Development, Science and Innovation Committee raised something similar. They basically said that they had concerns that censures are typically penalties that follow evidential findings on conduct. They wanted the provision amended to instead introduce censure as a separate sanction with a robust process for issuance, and that takes into account the natural justice requirements, but the formal warnings will also still stay in place. We have made these amendments—based, again, on excellent select committee suggestions. REUBEN DAVIDSON (Labour—Christchurch East) (09:25): Thank you, Madam Chair, and thank you to the Associate Minister of Justice for those answers on those previous questions. Continuing to move through and coming to Part 1, clause 20, “Section 131 replaced”, where we go through the functions. Just to step through these, because there are a number of functions that the anti - money-laundering/countering financing of terrorism supervisor needs to take, and I just wanted to step through each of these and have some questions specifically about those. The first, being new section 131(a), is “monitor and assess the level of risk of money-laundering and the financing of terrorism, including through providing risk assessments and intelligence to the Commissioner and reporting entities”. That seems to make sense, but we’re looking at all of this, sort of, shopping list of responsibilities that previously were held by three entities and are now going to be the responsibility of a single entity. There’s kind of, as we step through these responsibilities, two questions—the first being: how do these differ, or do they differ, from the previous responsibilities of the three entities? And secondly, when you merge and reword a number of responsibilities, there is always a risk that some may have failed to be included, or that the rewording or restructuring of those responsibilities and the way in which they are accounted for changes the interpretation or the reality of what is included in the—for want of a better term—shopping list of responsibilities. To move to new section 131(b): “monitor reporting entities for compliance with this Act and regulations, and for this purpose to develop and implement a supervisory programme: (c) provide timely and up-to-date guidance to reporting entities to assist compliance with this Act, regulations, and rules: (d) investigate reporting entities and enforce compliance”— CHAIRPERSON (Maureen Pugh): The member can assume that we can read this. REUBEN DAVIDSON: OK, excellent. That is great. So, then, the questions really are around the inclusions in clauses (a), (b), (c), (d), (e), (f), (g), (h), (i), and (j). The question, to come back to it, which I framed at the top of this contribution, was: how do these differ from what was previously accounted for, given that what was previously three separate functions is now rolled into one? How does that differ? What assurance does the Minister have that nothing has fallen out in that consolidation process? And, also, what wording changes are there that could potentially cause confusion or provide opportunity for someone to claim confusion in their interpretation of what is included in this bill? Hon NICOLE McKEE (Associate Minister of Justice) (09:28): Well, when we’re trying to cut red tape and make things easier, we certainly don’t want any confusion. I feel confident that we have mitigated that within this bill. The status quo still stands within this clause, but there have been three additions that have been made for the single supervisor. The additions include direction that the guidance for reporting entities should be timely and up to date, and assist with their ability to comply with the law; a requirement to engage with industry to identify and mitigate unintended consequences—which the member spoke to before—of the entire anti - money-laundering and coutnering the financing of terrorism (AML/CFT) system; and mandating to assist New Zealand to meet its international requirements under the AML/CFT regime, as well. So just those three additions; everything else is still the status quo, just moved into the single supervisor. REUBEN DAVIDSON (Labour—Christchurch East) (09:29): Thank you to the Associate Minister of Justice for that excellent answer. Moving into clause 21(5): here, it talks about—(5)(ba): “require any person whom the AML/CFT supervisor reasonably suspects has knowledge of a possible contravention of this Act or regulations to attend a meeting”. What we’re talking about here are actions that can be taken for non-compliance. What I’m wanting to, I guess, get a sense of here is what the degree of power that this bill provides is. The first part of clause 21(5)(ba) says this Act compels a person to “attend a meeting (including via an audio or audiovisual link)”. That could be as simple as a telephone call—or a Teams or Zoom or whatever is the video format of the day—with the supervisor to answer any of their questions that they have around the records and documents, or to provide the additional information that the investigator would need in this instance to see whether where there’s smoke, there’s fire, or whether this is a “nothing to see here” scenario. One of the questions from me around this point is: what happens and what powers does the bill give the supervisor in an instance where a person is requested to meet and declines that request? What would be the next step, and what power does this bill give the supervisor for non-compliance? Another scenario would be that a meeting is agreed to and attended, but the questions are insufficiently or incompletely answered, and the provision of proper records and documents isn’t met in the opinion of the supervisor. What would the next steps be at that point? In clause 21(5)(ba)(ii), it goes on to say that the request would be to “provide any other information that the … supervisor considers necessary or desirable for the purposes of performing or exercising its functions, powers, or duties”. Again, what would happen if the person being asked to provide that information disagreed and said, “Yes, I have that information, but I’m not prepared to share it.”? If they didn’t attend a meeting at all, or if they didn’t respond to requests for a meeting, what power does the supervisor have? Can they summons that person to a meeting? Is it equivalent to a summons power? Do they need to take proceedings elsewhere to compel that person to come to a meeting? The question, really, is around what tools and powers does this give the supervisor to make requests for meetings? What steps can they take if those requests are ignored or if those meetings are not attended? And then, what happens within that environment if the person or organisation persons refuses or is unable to provide the information requested? What would a scenario be in that example, where someone says, “Yes, I have that, but I’m not going to provide it.”? Or, if someone is sort of more of a shoebox receipt keeper—and I would hope that not many people are these days, but if this was the example—what would happen if the person had good will and intent but was unable to provide sufficient evidence as requested by the supervisor through a lack of attention to their own accounting records? In each of those scenarios, what powers does this bill give the supervisor to address the questions that I’ve raised around that new section? Hon NICOLE McKEE (Associate Minister of Justice) (09:33): Thank you, Madam Chair. I think, if you look at clause 21, “Section 132 amended”, it’s amending the powers. Of course, there is consequence if you give powers that are not able to be fulfilled, but the scenarios that the member has put to me are operational scenarios that I certainly cannot answer sitting here, because you don’t know what the scenario might be. I think what would be, perhaps, important for the member is the improvements, again, that came from the Economic Development, Science and Innovation Committee in result of this. They were a little bit worried, as well, about people being compelled to have to answer in a situation where a supervisor might just turn up. The select committee requested, and we have added into here, the ability for that individual to have a lawyer present at the meeting and be able to end the meeting at any point. That sort of speaks to what the member was asking about what if a person just says, “No, I don’t want to give you that information.” Well, we’re allowing them to end a meeting; we’re allowing them to have a lawyer so that they can be represented, but I can’t speak to exactly what the scenario will be, because I don’t know what the situation is. It won’t be a one size fits all, but the powers allowing the supervisor to be able to request the meeting—this needs to happen very fast. We are all aware that dirty money moves very quickly through our systems and can leave the country very quickly, as well. Allowing these powers allows the supervisor to be able to, hopefully, stop money leaving the country, especially if it’s been taken out of people’s bank accounts. How they work within that will depend on the actual scenario that they’re facing and what information has or has not been garnered. ARENA WILLIAMS (Labour—Manurewa) (09:35): Thank you, Madam Chair. Useful contributions about the search powers that start here, from clause 21 through, and there are a few questions about this. The Minister is right to point to the work of the select committee on this. Getting this right will be really important to the longevity of the scheme. One of the difficulties in this is that the codes do the bulk of the work, so you’ve got search powers that are associated with codes. Any contravention of the code—anything that, later, unelected people can decide is in contravention of the Act—then gives rise to requirements powers. They’re not summons powers, but they’re requiring someone to come to a meeting and then to be searched. That is something that we should legislate for. Every party in the House agrees that we need a very robust regime, but we should do it in full cognisance of what we are creating here, which is a regime where codes give rise to search and to seizure. That is why we are particularly interested in this and why a good going-over with the Minister is called for. On clause 21(8), the new (3A) inserted after section 132(3), I want to understand what the extent of the access to records and documents mentioned there is. Firstly, any person can be required to hand over documents, but does that mean any person who is reasonably connected to those documents? To whom does this apply in, say, a banking situation where you have some staff who are professionally engaged in compliance with anti - money-laundering? They are one category—obviously they are included. Then you have one category of staff who are engaged in client-facing work where they collect records. They are probably included. Then there are staff who are not engaged in either compliance or client-facing work. They are probably not included. What is the scope of who can be requested to requisition documents? My next question is around the regulation-making powers. I just want the Minister simply to answer: can the regulations also prescribe a punishment? The regulations can set out very, very broad categories of things—we’ve gone over that with the Minister; it’s her section 64. There is no punishment for not coming to a meeting and there is no punishment for not making available these documents in a timely fashion in the primary legislation, but the codes do allow for the setting of rules in relation to the rest of the Act. That’s important, because they’re not specifically set out in the primary legislation as something we anticipate the codes to do, but the general, catch-all nature of the codes means that you can anticipate what might happen if this did become a problem in future. You can imagine, if it became market practice not to come when required to come to a meeting, or if it’s just something that slipped, as in the situation the Minister has outlined where money is moving fast and time is off the essence, the requirement sort of lagging in market for two or three days when we’re actually talking about minutes and hours. Would it be the case that the regulator, the Department of Internal Affairs, could establish in the code either hard punishments, related to not coming along to these meetings or answering the phone, or soft punishments that were more associated with a higher administrative burden for other, positive access to the scheme that is required for licensees? Hon NICOLE McKEE (Associate Minister of Justice) (09:39): Thank you, Madam Chair. In answer to the member’s first question, require any person reasonably suspected—that is any person. That is any person at all that the supervisor feels may have some knowledge of transactions or what’s occurring. The reason why it’s any person is that you might have a business, and you might have an outside business—such as a law firm or an accountant or someone else who may hold information—and not even realise that there is crime occurring. We need to be able to access any person. The ability to compel a meeting is common and it has similar regulators—for example, the Financial Markets Authority in section 25 of the Financial Markets Authority Act 2011; also, the Commerce Commission at section 98(1)(c) of the Commerce Act 1986 has it that the supervisor must inform any person questioned under the new power of their right not to answer as well. Of course, we put in those other pieces around it, allowing a lawyer and a person to be able to end a meeting. The member asked whether or not punishment could be put in the regulations. The answer to that is no. Punishment will not be put into guidance either. It’s an expectation; it’s guidance. It’s guidance telling industry how they can operate within the law, how they can cut some red tape, mitigate risk, and what risk it is it they’re able to mitigate. It’s not coming in over the top and saying, “And if you don’t do this, you shall be punished.” That will be set out somewhere else and, of course, the punishment can be anywhere. The punishment could also be under the Crimes Act, and New Zealand Police may enforce that. That’s why it’s difficult for me to answer absolute specifics, because we have a wide variety of avenues for the supervisor to go down, including the newly acquired censure that they will be able to issue. Instead of going straight to police, they’ll be able to work their way through and give knowledge to the industry as well. REUBEN DAVIDSON (Labour—Christchurch East) (09:41): Thank you, Madam Chair. Moving through into clause 23, inserting new section 133A, there’s a heading here: “Power to enter dwellinghouses”. This one really is interesting to me because it says that “supervisor must not enter a dwellinghouse to conduct an on-site inspection except”—and it goes on to explain the circumstances in which that would be possible: with the consent of the occupier or with the granting of a warrant. That’s not the part that I’m really questioning; the part that I’m questioning is around the use of this term “dwellinghouse”, and that’s for a number of reasons. I’m not a lawyer, but, to me, “dwellinghouse” would suggest you’re talking about a place of residence. If we look at conventional and established business practice, then we could rightly argue that people work in offices and live in houses. I’ve lived in all sorts of different houses; I’ve never called any of them a “dwellinghouse”. I’ve also at times worked from home. So I’ve often been based at home doing any number of different roles or jobs, at which point you could have argued that there was as much resource material and information in my possession in my “dwellinghouse”, if that’s what we decided to call it, as there would have been in my office. At times, there’s, in fact, been more information available about what I’m doing and what I’m working on in my home than there has been in what would conventionally have been called my office or my workspace. Now, the other thing that this doesn’t account for is that in a world—and in a country—where we have a huge number and massively high proportion of small and medium enterprises, businesses, and start-ups, there will be a number of people who live and work in the same space, either because they’re working from home or because, in some cases, they may buy or rent a facility that provides a space to work downstairs and a space to live upstairs, or vice versa—it doesn’t matter which floor they live and work on, but that can be a cohabitated space. So is that a dwellinghouse or is that an office or is that a factory or is that a plant? The other thing is that in a world where we increasingly can carry around in our pocket access to and as much information as you could potentially need to mount an investigation, you could also argue that, at times, someone’s car or someone’s backpack has as much information and as much access to the kind of information you would want to be investigating or prosecuting as a potential breach of this Act. The Minister has spoken about the speed at which this happens, and I don’t think any of us are in any doubt about the need for speed—to use that terrible slogan—but in instances like this, the need to be able to move quickly. Now, dwellinghouse to me doesn’t say futureproofed legislation; it feels to me like a very clunky old-fashioned term, which risks excluding a number of locations, sites, and opportunities to be able to access and find the information that could be key to being that the handbrake—to use another word often used in this House—on that speedy process of transacting. The concern for me would be that the term “dwellinghouse” doesn’t sufficiently capture the number of places and spaces that information may be readily available and could be the missing piece in the puzzle. So, really, the question is: why the choice of the term “dwellinghouse”; whether the Minister gave any consideration or whether there were any other recommendations for better terminology or language; and whether you could argue that a car could be a dwellinghouse if you are potentially living in your car or working out of your car. As one of my colleagues has pointed out, there are a number of working people living in cars in New Zealand at this point in history, so would that be counted as a dwellinghouse? Would their car and the contents of their car be excluded under this legislation? By what I’m reading, you could argue that it is. So, really, the definition and whether there’s any consideration to how many environments this definition excludes from the reach of the supervisor. Hon NICOLE McKEE (Associate Minister of Justice) (09:46): Thank you, Madam Chair. Dwellinghouses are known throughout several pieces of legislation, so we use “dwellinghouse” because it’s already used and it’s therefore consistency. But it would only be used after other approaches have been tried—for example, if a request to produce documents is then denied, there would be the ability to go into the dwellinghouse. It would not be reasonable if the same information was available at a non-residential location. There has to be reasonableness about entering into a dwellinghouse. All other locations except marae are already included. The dwellinghouse previously had been excluded and it shouldn’t have been. So this makes it clear that the only exception now is actually a marae. That’s the only exceptional place. I do note, once again, that the Economic Development, Science and Innovation Committee actually looked into this, queried about whether or not they needed to make it more robust, and decided that they were happy with where it landed and there was no need to change it. Dr LAWRENCE XU-NAN (Green) (09:47): Thank you, Madam Chair. I want to move on to the next section, which is clause 26. I think this particular part is quite a meaty chunk of the legislation and this is to do with the national strategy and work programme. I want to check with the Minister first that with the new system, the Minister in the chair is the Minister in charge of anti – money-laundering and countering the financing of terrorism (AML/CFT), but the ministry in charge is the Department of Internal Affairs (DIA). What I couldn’t see in the definition of Minister and ministry of AML/CFT is what happens when the Minister, for example, is not the Minister of the DIA. How would that work in terms of—are you the Minister that’s referred to in clause 26, new section 149A, “(1) The Minister must adopt a national strategy AML/CFT”, and how would you then interact with DIA if the Minister relevant to the AML/CFT is not the Minister of the DIA? So that’s my first question. The second question is in—I’ll stick to this one because I have questions later on around the levies, which is also a big part of this bill, but for the time being, my second question is in new section 149C, inserted by clause 26. It talks about “Duty to review national strategy after Financial Action Task Force evaluation”. We’ve spoken about this briefly and then, in the regulatory impact statement, there is the idea that the next mutual evaluation is in 2028. Would I then assume that the review is after that particular period—so after 2028? Hon NICOLE McKEE (Associate Minister of Justice) (09:49): Thank you, Madam Chair. Thanks to the member for his first question for the morning. Yes, the Minister in charge will be the Minister in charge of AML/CFT and that currently sits under the Ministry of Justice. Those that are doing the operational work will sit under DIA. They are the group. It’s just the same as when there were three supervisors—the Financial Markets Authority, Reserve Bank, and the Department of Internal Affairs—it still sat under a Minister who was involved in justice, because we are talking about dirty money here; we are just utilising a different agency to enforce the law. With the mutual evaluation, yes, and the reason why we’re going to review it is because, once we’ve had that mutual evaluation, there may be considerations that we have to make changes, so we want to have a look at what the evaluation will tell us—that we’re on the right pathway or that we could improve it by doing something else. That’s why we will have an evaluation of the strategy and how it’s working, based upon the mutual evaluation that the Financial Action Task Force gives us. That begins—2027-28 is when we will have that evaluation. Once we’ve received it, that’s when we will start to look at the strategy and say, “Have we nailed it?”, “Have we met our international obligations?”, “Is there anything we need to change?” Dr LAWRENCE XU-NAN (Green) (09:50): Thank you, Madam Chair. Thank you, Minister, for that response. Can I just check, because one of the things the Minister mentioned yesterday is the fourth piece of legislation that’s coming—before the mutual evaluation 2028, but it’s coming, possibly, next year. Will there be sufficient time for the strategy to be implemented and embedded and then the mutual evaluation? Hon NICOLE McKEE (Associate Minister of Justice) (09:51): I’m advised that, yes, there will be, as long as we don’t muck around and actually get these passed—any time really soon would help the country with their mutual evaluation. TOM RUTHERFORD (National—Bay of Plenty) (09:51): I move, That debate on this question now close. CHAIRPERSON (Maureen Pugh): I think there are still some areas of this bill that can be explored. Dan Rosewarne: Madam Chair. CHAIRPERSON (Maureen Pugh): Sorry—brain fade. Hon Members: Dan Rosewarne. CHAIRPERSON (Maureen Pugh): Dan Rosewarne—sorry. My apologies to the member. DAN ROSEWARNE (Labour) (09:51): Thank you, Madam Chair. It’s my first question in the Chamber since being sworn in again, and it’s definitely interesting not being worried about closure motions but actually going through this bill. I want to thank the Minister for her detailed questions and rounding out the understanding of the bill. Now, clause 26 prompted my interest, especially with the Green contribution over there, so I have a similar line of questioning. Introducing sections 149A to 149D, essentially, creates a new strategic backbone for the anti - money-laundering and countering the financing of terrorism (AML/CFT) regime. It’s a national strategy adopted by the Minister, followed by a regulatory work programme issued by the ministry. This is significant overdue reform. For too long, AML/CFT settings have evolved in a piecemeal fashion, often driven by external evaluations or operational pressures rather than a coherent domestic strategy. A published national strategy provides clarity of direction and prioritisation of risks, which is good for holding agencies to account. The requirement to consult affected persons before adopting the strategy and issuing the work programme is particularly important, in my view. It acknowledges that the AML/CFT obligations have real economic and social impacts and that effective compliance depends on early engagement. However, the success of this framework will depend on substance, not form, and a strategy that is aspirational but vague will not provide any meaningful guidance. Likewise, a work programme that lists activities without timelines, ownership, or cost implications will not deliver that transparency. There’s also an important constitutional dimension. While the national strategy may direct agencies, it must not undermine the statutory independence, particularly of the Commissioner of Police, as explicitly recognised in section 149A(4). In my mind, the committee should therefore view these provisions as accountability mechanisms. If done well, that will anchor the supervisors’ expanded powers in a publicly visible plan that Parliament, reporting entities, and the public can actually scrutinise. My questions are around what level of detail the Government expects the national strategy to contain, regarding priorities and sequencing, and how progress against the regulatory work programme will be reported to Parliament beyond the summary publication requirement. Thank you, Madam Chair. Hon NICOLE McKEE (Associate Minister of Justice) (09:54): Welcome back to the member, and thank you for your first question back in the Chamber. The national strategy is done in such a way that, because we are levying industry, we want them to be a part of the solution. We’re basically saying, “We’re going to levy you, but what do you need to make it work well for you?” These new sections—149A, D, E, F—are all setting out the fact that we need to have a national strategy that is agreed to by industry in order to move forward. Section 49D requires the Ministry of Justice to issue a regulatory work programme in order to implement the strategy. New section 49E requires the Ministry of Justice to report annually on their work programme and the levy and to set key elements of each annual report. I will again go back to the select committee and thank them for the work they did here. They actually wanted to have a clause within the bill that details where the money is being spent and how it’s being spent, so that there is accountability. New section 49F requires the ministry to review the levy funding three years after the levy regulations are made or significantly amended so we can see whether or not we’ve landed in the right spot, that the contributions from different industries are the right amounts, and, more importantly, that we’re able to, together, combat organised crime. REUBEN DAVIDSON (Labour—Christchurch East) (09:56): Thank you, Madam Chair. Continuing to move through the bill, and thanking the Minister for that last answer, which was great—it got us to where we are now, which is clause 26, inserting new section 149B. This is around the publication of a national strategy. Now, really, I’m looking at this in the context of the Minister’s earlier answer around the need to cut red tape, and that’s a term we hear a lot from certain parts of the House. The concern I have with that statement, in the context of section 149B, is that it talks about adopting a national strategy under section 149A, and then it talks about amendments or replacements to the strategy and what the Minister is compelled to do. Paragraph (a) talks about presenting a copy of the strategy of the House—that’s pretty straightforward; notifying the adoption, amendments, or replacement in the Gazette—once again, that makes the information available; and publishing the strategy on the internet site maintained by or on behalf of the ministry. All of these talk to making that information available for people to find. That’s good. People do need to be able to find what the national strategy is. But what it doesn’t speak to and what it seemingly omits—and so my question to the Minister is whether this is the case—is that there doesn’t appear to be a consultative process there. If your objective is to cut red tape, surely those who would understand the frustrations, or the supposed frustrations, with the red tape best are those affected parties who the red tape gets in the way of. Without spelling out in law that those communities need to be consulted with, the risk is that, with the best of intentions, the red tape may remain; may, in fact, get worse; might get better. There’s really no formal consultative process with community or stakeholders that I can see spelt out in this bill that ensures that, whilst the strategy is able to be published, is able to be shared, is able to be widely discoverable, it necessarily reflects—or, certainly, no one is compelled to ensure that it reflects—the needs, the wants, the requests of the sectors that the strategy is actually for. The question to the Minister is: if that is not part of the process in section 149B, is it hidden somewhere else in the bill that I’ve missed? There’s a very good chance that it is. If it’s not hidden somewhere else in the bill, is she concerned that there isn’t a facility within this bill for industry and operators to inform a strategy that is the national strategy for them? If that’s the case, is there a risk that, actually, the best of intentions to facilitate and make easier the administrative and compliance process for organisations and entities could, in fact, be more difficult by way of a national strategy that doesn’t reflect the hopes, desires, dreams, requests, demands of the sector? What facility is there for community and stakeholder engagement in the shaping of the strategy; and, I guess, also, out of interest, what requests, and via what mechanisms, have asks for change come to the Minister so far? I imagine it would be interesting to know if it’s feedback from industry that is compelled this change, then, what is the ongoing mechanism to capture the feedback from industry about: (1) whether the change is working, and (2) whether the change needs to change more in the future to be more reflective of creating a safe but de - red-taped environment for those organisations and entities to operate. Hon NICOLE McKEE (Associate Minister of Justice) (10:00): Thank you, Madam Chair. I can assure the member that the consultation groups involved in the national strategy have been very wide, very broad. This has been ongoing for a while. We don’t usually put in legislation who exactly it is that you’re going to be consulting with. I’ve never seen that in legislation—where it’s actually detailed. And if it was, I would not want it detailed on there because we have, like I have mentioned many times, emerging technologies, emerging groups. So you want to be able to capture everybody who could be involved and need to have a say. I’m really proud of the way that the Ministry of Justice have conducted their engagement on the national strategy plan. They have finished their consultation with industry; they, now, are preparing what they think a national strategy will look like. Of course, this has been worked with industry in order to remove that red tape and, by goodness, we’re certainly going to do it. And it’s going to relieve a whole lot of red tape for so many New Zealanders out there who don’t even realise that they’ve been caught up in the anti - money-laundering system. And, at the same time, strengthening those agencies to be able to conduct business and open it up a bit better for them. So they are involved—well and truly involved. I would like to just give my appreciation to those industries, the banks, the real estate agents, the lawyers, the accountants—all those that have been involved in what will, ultimately, be New Zealand’s best anti - money-laundering strategy that we’ve had since we’ve been in this regime. TODD STEPHENSON (Whip—ACT) (10:02): I move, That debate on this question now close. CHAIRPERSON (Maureen Pugh): I think we are getting towards the end of this debate, but I will take some further questions, as we move forward, from Lawrence Xu-Nan. Dr LAWRENCE XU-NAN (Green) (10:02): Thank you, Madam Chair. I did indicate to you, Madam Chair, before, that I want to move on to the levy sections. I’m looking at clause 30, “New sections 155A to 155D inserted”. Now, I just want to check with you, Minister—this is the first time I’m actually seeing a new acronym: CRIS; I have not seen a “cost recovery impact statement” before. I want to check a couple of things with you. Noting in 155A(3)(a), (b), and (c), it talks about “a portion of the costs incurred by the Ministry” and “a portion of any additional costs” and “the full costs of collecting the levy money.”, which I understand. Can I just check if that is consistent with what we’re seeing on page 5 of the CRIS, which is the recommendations for a partial cost recovery for the regulatory system rather than full cost recovery, citing that a lot of this is part of public good, which should be factored into a budget line for an agency. I want to check with the Minister if there’s any work that’s being done on—I know that will fluctuate—but has there been any work done on what would be considered recoverable where that portion would be considered recoverable from a private sector levy and will be considered as a baseline for the agencies itself? Now, Minister, you mentioned before that there’s also going to be a different, sort of, tiered system. I think, yesterday, you mentioned that banks that have the highest risks, will, potentially, incur the greatest levy. Can I just check if that is to be interpreted under new section 155A(6)(a), which, for example, is “the regulations may specify class or classes of reporting entities that are required to pay a levy.” I wanted to check if that is also consistent with what we’re seeing on page 10 of the CRIS, on high-level cost recovery models, which talks about individual levy amounts will be set by revenue risk band. Is that something that is, although not stated explicitly—those words—in the legislation, is it still the intention of the regulation that, potentially, is proposed on those individual levy amounts based on revenue risk band rather than fixed percentage? Last one. This is just purely, purely, out of interest. It’s new section 155D, which says the Minister must consult the persons in 155D(1), but in 155D(2) it says, “A failure to comply with this section does not affect the validity of the regulations.” I’ve seen that particular phrase come up a couple of times in other legislation around the making of regulations, but I want to check, Minister, from a drafting perspective: what would be the difference of having (1) say “Minister must consult” and if it failed to consult it doesn’t invalidate the regulations; then, if (1) just says the “Minister may consult”, and leave it up to the Minister’s discretion on whether consultation will happen or not? I don’t know if it’s simply semantics or drafting preference, but I thought that was an interesting observation. Thank you. Hon NICOLE McKEE (Associate Minister of Justice) (10:06): Thank you, Mr Chair. In speaking to clause 30, new sections 155A to D—the setting of the levy and what’s recoverable. Yes, in answer to the member’s question 155A(6)(a), “the regulations may specify the class or classes of reporting entities that are required to pay a levy:”, that is where you’re quite right. It’s to set out exactly what industry will be paying; what percentage of the levy. What is well-known, I think across the Chamber, was, in the past, the three supervisors were unable, they didn’t have the resource to be able to really capture or interrogate where dirty money was flowing—the anti - money-laundering system. What’s become very clear, in consultation, is that industry have told us, effectively, that they are very keen to pay a levy if it reduces red tape on people; it stops them having to do the same things. But they also said to us: “Could you, please, ensure that you fund the Financial Investigation Unit, because having them and the ability for them to prosecute, will also make life easier for industry. How this is going to look? I’m still waiting on that advice—who’s paying what? What amount? How is it going to work? What amounts are going to what cost recovery? What’s very important, though, is that the cost recovery is reasonable, that it’s not excessive, and it is on the part of the public good. I think what’s very important for the member to understand is that the agencies or the levy is not paying for the entire system. Government’s contribution is still there. Government will still be paying for the amounts that are for the public good as well. So it’s not that we’re taking everything from industry and expecting them to pay—Government will continue to pay their fair share. ARENA WILLIAMS (Labour—Manurewa) (10:08): Thank you, Mr Chair. Great to be discussing the levy, which I said was the guts of this bill. Congratulations to the Minister for bringing in these new powers for levying the industry to pay for a service which is really valuable to them. I want to ask her about new section 156E. I appreciate that she is in the process of consulting on who pays and who doesn’t, but this is a very broad power about when she has decided who pays and who doesn’t, then the chief executive being able to exempt people who would otherwise be caught by her net. I want to bring the Minister to that section, particularly because it is useful for the committee to understand how broad that power is. In this Act, there are no provisions in the primary legislation that govern the chief executive, in terms of either a purpose or value statement, about why the chief executive would make an exemption or a class of transactions as an exemption. So this is not only who pays but what kind of transactions are within the anti - money-laundering net is also being provided for as an exemption power here. That’s a really broad power because you would usually either have a class of persons who were operators within a system or you would have a class of types of activities, and those are usually, you know, the types of activities that you would prohibit in criminal sanctions, is the way that we draw the net there. But, in this case, you’ve got both kinds of powers for the chief executive to cut out of the system at a later date. That seems really broad. Is the intended design here that the chief executive—is this merely futureproofing? If it was just futureproofing, then that’s really useful for us to understand, because if the operating environment doesn’t change too much in five years, then you might say, well, we wouldn’t expect lots of uses of these exemption powers, particularly the class exemption powers. But if they’re not about futureproofing—if they are, say, because you would anticipate larger entities behaving in different ways to smaller entities or more kinds of political pressure being exerted on a given industry, say, like real estate and more political attention being provided for real estate—is that the intention of the class exemptions? That would be different because, you know, it’s up to any given Government of any given day to look at a particular industry and say, “We think there is a real risk here and a systemic risk to our national reputation, and so we want to focus on this.”—but you wouldn’t usually do that via a class exemption. We’ve had some useful debate in this House about how you would set that national strategy to do some of that, sort of, values-based decision making, not via this mechanism, which is the exemptions powers. So if the Minister could give some attention to that, that would be very helpful. I also want to ask her about new section 156G, inserted by clause 32. This also relates to the exemption powers, but it’s making notices around, then, parts of transactions. I want to ask again about what the status of those notices is. Are they secondary legislation? Are they part of the code? What are they and what is their enforceability? I have some more questions about the rule-making powers further for the levy, but will stop there for now. Hon NICOLE McKEE (Associate Minister of Justice) (10:12): The ability to issue an exemption has always been there within the law. The reality is that without guidance on how these entities are to operate, a lot of exemptions haven’t actually been issued. However, since I’ve been in the chair as the Minister in charge of anti – money-laundering and countering financing of terrorism (AML/CFT), we have now started to issue some exemptions. To give the member an example, just off the top of my head—a class exemption that was given recently was to the insurance industry, for example. It’s unlikely that you’re going to see dirty money laundered in trying to pay for the car insurance or the house insurance, so they had asked for an exemption for certain parts or certain activities that they have. This is just allowing the status quo, which is to allow an exemption, either as a class or, perhaps, for a single business, but that requirement must be met by ensuring that there are certain qualifications that are met within the application that would allow an exemption to take place. If they don’t meet those requirements, they will not be eligible for an exemption. CARL BATES (National—Whanganui) (10:13): I move, That debate on this question now close. CHAIRPERSON (Greg O'Connor): The member has suggested she’s got some more questions. I would suggest she put them all into this. ARENA WILLIAMS (Labour—Manurewa) (10:13): One contribution? All right, Mr Chair. I’ll prioritise the question I had about the matters which relate to rules. Are the matters that relate to the rules, Minister, that you’ve set out at your new section 156H, inserted by clause 32, then intended to apply to the exemption notices? You have helpfully given us that it’s not just about futureproofing; it is about our values judgments and based on risk. Say, at any given time, the insurance industry is not in the gun. We accept that; that makes sense. So are, then, the powers that set out the values judgments that you’d make—and I’ll bring your attention to new section 156H(e) at the top of page 23, which is unfair advantages for reporting entities and disadvantages to others; those are the sorts of value judgments that are made, which are in the primary legislation, for the setting of your codes and your national strategy. Do they relate to the exemption notices? Because the exemption notices look to me like they don’t have any sort of values-based propositions for how you would grant an exemption, and yet you have access here to a set of values judgments for the codes, which are helpful. I also want to ask you about the transitional provisions. The movement from the three regulators to one regulator would always have encountered some administrative difficulty—not only in terms of staff but also of data. Can we just focus on the use of the data and processes for gathering information? Is it the case, in these transitional provisions, that all of the data held by the Financial Markets Authority and the Reserve Bank of New Zealand move over to the Department of Internal Affairs (DIA) and don’t trigger any oversight from—that would otherwise trigger provisions from in the Privacy Act or the Policing Act? Does information that the Police hold in the Financial Intelligence Unit also get shared in this way at transition, and is it necessary for the data held by DIA in its former capacity as regulator for a part of the anti – money-laundering system to also transition its data? The reason I ask is because all of that probably gives rise to obligations under other Acts. Does this transitional provision for data exempt any other provisions arising, or is it the case that there is still potential liability arising at that point of transition? Hon NICOLE McKEE (Associate Minister of Justice) (10:16): The member points out, I think, paragraph (e) and paragraph (h) in new section 156H, inserted by clause 32, which is processes for making rules and notices. While there’s some about exemptions, it’s actually all about making rules and notices within that particular section. When it comes to data sharing, I mean, there is already data sharing that occurs. As I’ve mentioned earlier, members from the Financial Markets Authority and the Reserve Bank are on the Department of Internal Affairs team, so not only will there be information but there’s a lot of knowledge up in these heads that will still be contributing to a really robust anti – money-laundering and countering financing of terrorism system that’s going to cut red tape and make it easier for Kiwis to operate. STUART SMITH (Senior Whip—National) (10:16): I move, That debate on this question now close. A party vote was called for on the question, That debate on this question now close. Ayes 68 New Zealand National 49; ACT New Zealand 11; New Zealand First 8. Noes 55 New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5; Ferris. Motion agreed to. CHAIRPERSON (Greg O'Connor): The question is that the Minister’s amendments to Part 1 set out on Amendment Paper 573 be agreed to. A party vote was called for on the question, That the amendments be agreed to. Ayes 68 New Zealand National 49; ACT New Zealand 11; New Zealand First 8. Noes 55 New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5; Ferris. Amendments agreed to. Part 1 as amended agreed to.