Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill

Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Committee of the whole House Part 1 Amendments to Anti-Money Laundering and Countering Financing of Terrorism Act 2009 CHAIRPERSON (Greg O'Connor): Members, we come now to the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. We begin with a debate on Part 1. This is the debate on clauses 3 to 28, “Amendments to Anti-Money Laundering and Countering Financing of Terrorism Act 2009”. The question is that Part 1 stand part. Hon NICOLE McKEE (Associate Minister of Justice) (19:55): Thank you, Mr Chair, and thank you to the members of the House for joining me for the committee of the whole House stage for the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill, which I’ll refer to from here on as the supervisor and levy bill. I’m honoured to be leading the supervisor and levy bill through the committee stage after the broad support it received at its second reading, and I look forward to hearing your views as we debate the bill. This bill will make a range of structural enhancements to the anti - money laundering (AML) system. Firstly, it will streamline the AML supervision by moving to a single supervisor, the Department of Internal Affairs, from the current three supervisors. The DIA has vast experience in intelligence-led investigations, with a current track record in supervising casinos, money remitters, and other high-risk sectors. Under a single supervisor, businesses will benefit from improved and more responsive guidance and reduced cost and complexity where the risk is low. Businesses will be supported to apply risk-based compliance, lighter compliance when the risks are low, and more intense supervision for higher-risk sectors and situations. As our front line of defence, we want businesses more focused on compliance that identify suspicious activities to detect and deter potential crime, rather than spending time on low-risk transactions that do nothing to tackle crime. Second, the bill introduces a new industry levy to improve the functioning of the anti - money laundering countering financial terrorism system. It is estimated that over $1.6 billion is laundered annually through New Zealand’s financial system, money that is tied to serious harm in our communities from drug trafficking, fraud, and organised crime that exploits vulnerable people. Industry is telling us they want better intelligence from Governments so that they can be more effective in helping tackle financial crime. Government agencies have not been resourced well enough to address the requests from industry to improve the system, and this change forms part of these reforms. Finally, the third component of this bill updates some flexible regulation that can result in ineffective use of our resources and undetected crime. Organised crime syndicates are becoming increasingly innovative, using new methods and emerging technologies to outpace regulation. This bill will allow agencies to make regulatory changes through alternative forms of secondary legislation, such as rules and notices. Cushla Tangaere-Manuel: Point of order, Mr Chair. CHAIRPERSON (Greg O'Connor): Sorry, Minister. I believe the point of order will be in relation to which bill we’re talking about. Now, there are two very similar bills, Minister. This is the one we’re on: Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. That’s the next— Hon NICOLE McKEE: My apologies. I was told that this was the first bill that we were debating. CHAIRPERSON (Greg O'Connor): It’s a very understandable mistake; they’re very similar. Hon Dr Duncan Webb: Speaking to the point of order, Mr Chair. If the Minister has skipped over a bill, she’s fully entitled to do that; she just can’t go back to it. It would appear that she’s chosen to miss an item off the Order Paper. CHAIRPERSON (Greg O'Connor): No, she hasn’t skipped over a bill. I read out this bill. She is speaking to another bill and I’m now bringing her back to the bill that she needs to be speaking about, but nice observation there. Just to confirm, we’re now on the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill and the bill that the Minister is discussing will be the next bill. The Minister can stand and speak, as long as she’s in the bill, so there we go. Hon NICOLE McKEE: Thank you, Mr Chair. I may start with a new introduction. This time, I’m going to speak to the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill and I’m very pleased to be leading this particular bill through the committee stage. I’m pleased to say that there was broad support across the House for this bill at its second reading and I look forward to hearing the views of the other parties as we debate the bill. This bill will make a range of targeted enhancements to the anti - money laundering (AML) regime. It focuses on amendments that make continuous improvements and repairs without major policy or system design changes or significant financial implications, ensuring that the anti - money laundering and countering financing of terrorism legislation remains fit for purpose. This bill carefully balances the objective of delivering regulatory relief for businesses and people in New Zealand with the effectiveness of the system. One of the changes in the bill that will make the most difference is relaxing the requirement for businesses to conduct customer due diligence for low-risk trusts. Currently, businesses must apply the same enhanced customer due diligence requirements to all trusts regardless of their risk, even though in New Zealand there are many low-risk trusts like small family trusts. This bill will allow for the application of customer due diligence measures for low-risk trusts that are more proportionate to the risk that they represent. We are also removing the requirement for people to submit a border cash report if they have received cash from someone who physically moved the cash into New Zealand, as this is needless duplication. This change will streamline the process. This bill is a practical demonstration of the Government’s focus on regulatory stewardship. We must progress this bill as it will help to ensure New Zealand’s regulatory systems remain up to date, fit for purpose, and beneficial for businesses and the public. I welcome debate on this particular bill, but I will also mention that there is an amendment paper on the table, Amendment Paper 572. There will also be an amendment paper on the following bill—that will be Amendment Paper 573. Effectively, what I’m looking to do is delete clauses 23, 24, and 28 from this particular bill and then insert them into the bill that we are going to debate next. It’s not gone, it’s just removed from this bill and being placed into the next—that’s what those two amendment papers are about. I look forward to the upcoming discussion. CAMILLA BELICH (Labour) (20:02): Thank you, Mr Chair, and thanks to the Minister for the fulsome introduction. I think these bills do have quite similar names, and then obviously the two amendments are also working between these two bills. We did have them read as one during the last reading, so it is understandable that there is some overlap between the two of them. I did want to go back to the original legislation, the 2009 Act, and just start at the beginning, as it were, with clause 3, which refers back to that principal Act. I’ve got a copy of that here, and I wanted to just check with the Minister—she’s made a few comments around what this bill will do, and I wanted to check with her that it is her intention, through the passage of this legislation, to make it more difficult and the systems to be more robust in order to prevent money laundering in New Zealand. The reason that I ask that question is when you look at—it happens to be clause 3 of the principal Act as well—the purpose of the primary bill which is being amended, and there isn’t a subsequent amendment to the purpose, as I understand, in this bill. The main purpose of the primary piece of legislation is to detect and deter money laundering and the financing of terrorism and to maintain and enhance New Zealand’s international reputation by adopting, where appropriate in the New Zealand context, recommendations issued by the Financial Action Task Force and to contribute to the public confidence in the system. It’s also got subclause (2) there that I won’t read out. The Minister, in her opening comments, made comments regarding the proportionality of reporting requirements, indicating that some—and I’m interested to know if this was her intention—of the reporting that is required at the moment may be, and this is my interpretation of what she said, more arduous or more stringent than necessary in terms of the use of the word “proportionate”. I want to know: is it her intention to water down this purpose in the primary legislation at all, or not? The other thing that the Minister mentioned was the need for reports and the fact that this bill will remove a need for a report to be done in certain instances. I wanted to check with her, in terms of the primary piece of legislation which I’m referring to in clause 3, will that support these goals—which are, I think we can agree across the House, important. It’s important that we have public confidence in the financial system; it’s important that we detect and deter money laundering; and, of course, financing terrorism is obviously something that we have to be very, very concerned about. I just wanted to allow the Minister to answer those questions, especially with those initial opening comments, which did indicate, perhaps, a lessening of the stringent nature of this regime. In terms of my opening question, I just wondered if the Minister may be able to respond to that. Hon NICOLE McKEE (Associate Minister of Justice) (20:05): Thank you, Mr Chair, and I thank the member for asking for some clarity around what this regime change will actually do. Quite rightfully, you’ve asked, “are we lessening or weakening some of these holds?” and my answer, hand on heart to the member, is no we’re not. What we’re looking to do is ensure that when we go after the dirty money, so to speak, that we’re going after it in the right place—that we’re not targeting every single person who is moving money as that potential organised crime prospect. To give you an example of that is looking at the trusts, for example. We do have, I believe, around 700,000 trusts in New Zealand, and—I might have this transposed—400,000 are high risk and 300,000 are low risk. It’s making those low-risk trusts—basically, your standard family trust—to not have to go through the same rigmarole that some of those higher-risk trusts do. It’s allowing the agencies to be able to determine what is their risk factor. Another example would be, say, buying and selling a house. You’ll be interacting with a real estate agent, with a lawyer, and with a bank, and at the moment, all three of those entities are asking you to provide the same information. We’re basically saying if it’s the one transaction, let’s have one entity get all of that information and confer to the rest that it’s all OK because they have already received that information. This will cut costs. It will enable people to just be able to move on without having to jump through the hoops. In that respect there is some relaxing, but it’s not relaxing on behalf of organised crime or our ability to chase organised crime—we very much will continue to go after the dirty money and protect as many people as we can within New Zealand. Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (20:07): Thank you, Mr Chair. Just moving deliberately through the legislation, just looking at clause 4. It inserts a new definition of “beneficial owner”, and on my reading of it, paragraph (a) is the existing definition—so there’s no change there—but paragraph (b) is, in fact, new. I’d invite the Minister to explain why the additional paragraph (b) is needed, because it would seem that paragraph (a) is fairly broad. The one that does the work is a beneficial owner, so the definition of “beneficial owner” is a person—individual—*“who has effective control of the customer or person on whose behalf a transaction is conducted”. That’s a broad test but it’s a clear one, and it’s not any particular, it’s just effective control. In paragraph (b), we’ve got, essentially, a repetition of that: *“and (b) includes an individual (i) with ultimate ownership or control of the customer … or”—and then you’ve got this really odd clause which just seems to muddy the water—“(ii) who is a customer of a customer, and on whose behalf a transaction is conducted, but only if the individual meets the requirements set out in subparagraph (i)”, so it goes up again to ultimate ownership. It seems to be a really convoluted way of saying “effective control”, because it doesn’t matter if you’re a customer of a customer or not if you’ve also got to have ultimate ownership or control, which is effective control. I’m not sure if there’s a case out there which triggered this or there’s some notional gap in the law, but I must say, I find it really frustrating when the law seems to just populate itself—it breeds, and words just multiply before our eyes. And so, I’d be really interested to know what the thinking behind this one is. Also, just whilst we’re here, I’m interested to know, because new paragraph (a)(ii) talks about “prescribed thresholds”—we see that a lot in company law, that if you’ve got 25 percent of a company, you’ve got certain restrictions; 50 percent, other takeover rules apply; and once it gets to, sort of, 95 percent, you get a compulsory takeover framework; and so on and so forth. I get all that. I’m interested to know what the prescribed threshold is, because I’m presuming that that’s in regulations already. Control is assumed when you own such and such of a company. That may change depending on how large the company is, but I’d be interested in that. My real point is simply that one around, why do we need a rule about “a customer of a customer”, which then also includes “ultimate ownership or control”, when you’ve got a very effective test that simply talks about “effective control of a customer or person on whose behalf a transaction is conducted”? I’d be interested to know what’s the gap, what’s the fix—what’s the mischief? Hon NICOLE McKEE (Associate Minister of Justice) (20:11): Thank you, Mr Chair. I think the member was referring to section 5, not section 4, so I’m going to answer it—I’m pretty sure it’s section 5. Clause 4, amending section 5? Hon Dr Duncan Webb: Oh, yes. Clause 4 of the bill, section 5. Hon NICOLE McKEE: OK, thank you. Clause 4, “Section 5 amended”, is amending the principal Act to update the definition of a “beneficial owner”, update the definition of “designated non-financial business or profession”, replace the definition of “trust and company service provider”, and insert a new definition of “money or value transfer service”. The reason why we’re making these changes about the “customer of a customer” is because the statutory review found that there was an issue that the definition of beneficial owner in the Act is capturing some people that it shouldn’t, and that referred to the customers of a customer. It also identified gaps in the definition, in that it did not include a person with ultimate ownership or control. The definition was initially amended in the regulations, and this amendment brings those definitions into the Act. The new definition will include “a person with ultimate ownership or control” and exclude “the customers of a customer” unless they’re the ones with the ultimate ownership. Ultimately, this amendment provides clarity and relief by ensuring businesses do not have to undertake the Act’s obligations on customers of customers. In relation to the member’s second point, if the member could, please—he said “(a)(ii)”, but I don’t understand where that is. If the member was able to point me to— Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (20:12): I can do that, if the Chair will allow me. The prescribed threshold is referred to in clause 4 of the bill, “Section 5 amended”: “beneficial owner” means an individual who “(i) has effective control … or … (ii) owns a prescribed threshold”. My question was: what is the prescribed threshold of a company? CHAIRPERSON (Greg O'Connor): Just while the Minister’s taking advice—Dr Lawrence Xu-Nan. Dr LAWRENCE XU-NAN (Green) (20:13): Thank you, Mr Chair. Thank you for joining us, Minister. I have two broader, policy-based questions also in relation to what we’re seeing within the regulatory impact statement as well. I think the first question is: when this bill was first introduced and then when the second bill was introduced, it was supposed to be one part of four, in terms of some of the changes. I just want to check in terms of how this one’s going to be tied into the broader things, when some of these are now—one and two, once past third reading, will be in effect, and then, you know, just checking with the Minister if there’s any intention around when the subsequent bill is going to be introduced. The second question I have is: a lot of the things we’re seeing here are the result of the Financial Action Task Force recommendations, as well. I’m noting in the regulatory impact statement that it mentions there were some limitations around the ability to consult because of the mutual analysis between the Financial Action Task Force and, also, in terms of the bill being introduced with a 2028 limit. I just want to check with the Minister, again, with some of the things we’re seeing here, how that would then be implemented and, in terms of that potential, whether that’s a review in 2028 again by the Financial Action Task Force. If you wouldn’t mind just elaborating on what that interaction is going to be like. On to the bill: I’m actually going to talk about clause 4, “Section 5 amended”, but subclause (3). This is the definition of “trust and company service provider”. Again, noting what the Hon Dr Duncan Webb mentioned before, what we’re seeing with new paragraph (a) is that (a) is the existing definition, but new paragraph (b) is what the Minister mentioned is the new thing. I totally understand in terms of, let’s say, you have a single transaction and you have three people asking the same thing—it’s easier if it’s just one person. But, in this particular case, when we’re looking at the definition of “designated non-financial business or profession carried out by the financial institution”, I’m interested to know, if it’s one point of contact, who, then, out of the three—the example that Minister gave—would then be responsible for getting that, or is it going to be transaction based? If the client is, in this case, having that single transaction, that means the client will provide the same document to all three, so where would the onus for that be? I don’t know if I’m making any sense, but if the Minister understands it, that would be great. I guess the context for that is: I remember when the Anti-Money Laundering and Countering Financing of Terrorism Act got a major update in 2018, and one of my previous jobs, when it comes to working in international education, was helping students open a bank account. One of the challenges we hit over there was the requirements that were needed for students, as a client, trying to go to a bank and open a bank account, because there was a potential worry that international students were using the same system to launder money from various locations. I want to check, in this case, with the single source, if it’s a single transaction and now we’re reducing, for example, from three to one, would the same, I guess, compliance lens by all of these agencies be able to be placed on the client to make sure that there’s nothing going on in the background? Again, if I’m making sense. Those are my questions for the time being. Hon NICOLE McKEE (Associate Minister of Justice) (20:17): Thank you, Mr. Chair. I’ll start by answering Hon Dr Duncan Webb’s question, The prescribed threshold set out in section 5 of the anti-money laundering (AML) definitions—it says “R5 of AML definitions regulations 2011”—is greater than 25 percent, if that makes sense. Moving on to the member from the Green Party’s questions: the first question the member asked was around the four AML bills that we have going through. The first one’s already done; we’ve passed that. This one and the one that we’re debating directly after this are two more, and then the fourth one will be under way this year. It won’t be completed this term, but the most important parts of what we need to do to meet our Financial Action Task Force obligations for the evaluation, which starts to take place in 2027 and finishes in 2028—we need this to go through in order to be able to say to them that we have addressed the issues they raised at their last mutual evaluation in 2021 and that this is what we have put into place. They may turn around and say, “Well, you haven’t done it fast enough.” or they might say, “Actually, this looks really good. We want to see what is occurring as a result of that.” By the time we get to that evaluation, we would be 12 months, possibly even 18 months, into a regime to be able to actually show some outcomes for the changes that we’ve had. We won’t know until we actually get to that evaluation point. That’s one of the reasons why we are putting through four AML bills and three of them in this term: so that we can look to meet those Financial Action Task Force obligations, which would benefit everybody in New Zealand—including every political party, as well. I’m grateful for that cross-party support there. The member asked me about who does what when I gave my examples. You’ve got three entities collecting the information; who’s going to be doing that? One of the main confusing aspects about AML is that people don’t know who has to do what, and this is partially because we’ve had three supervisors who couldn’t agree on the type of information that needed to go out to the different regulators or agencies. From 1 July, we will have one agency. It will be up to them to give advice to all the different users of the anti – money-laundering to tell them what their obligations are and help them to work within the new regime that we’re putting in place. If I were to say, today, that it’s the banks that are going to do it and not the real estate agents, well, there may be an area where the supervisor might say, “Actually, we may need someone to capture this, and someone else to capture that.”; or it may be fine for one entity to capture the lot, but they need to work it through and, more importantly, they need to work it through with industry. This is where the national strategy comes in as being so important—and that’s in the following bill—because we need to understand from industry what it is that they might have an issue with or what it is that is being duplicated that shouldn’t be, so that we make sure that our response doesn’t create more issues for them and actually just gets to the crux of the problem that we’re trying to address, which is the money-laundering and the organised crime within New Zealand. I hope that one made sense. CAMILLA BELICH (Labour) (20:21): Thank you, Mr Chair, and thank you to the Associate Minister of Justice for her engagement and for her answers to members’ questions and to my previous question. As the Minister has alluded to, this has received support throughout the House. It’s good to have that assurance around the stringent requirements and the fact that we’re not diverting from the purpose of preventing money-laundering, or weakening or watering that down. Thank you for that reassurance. I just wanted to, as colleagues have also been doing, stick to the initial clauses that we’re looking at and stick to the definitional clauses and the interpretation that had been changed. We’ve had a couple of questions on that, but I wanted to bring up a few questions which haven’t been covered yet. There are a few of these, and they’re small things, but I might just go through them, and then if the Minister wishes to respond to them or get some advice, that would be excellent. The first one, if we’re looking at the clauses, is clause 4(2)(b). In this particular change, there’s a change from “engaging in or giving instructions” to “carrying out, preparing to carry out, or giving instructions”. I just wanted to query with the Minister—and apologies, I wasn’t on the Justice Committee when this was being debated, so it may be that there’s an obvious answer—what the effective intention from that change was. It appears to be a little bit similar but also has the intention of, I think, “carrying out”, as well, “preparing to carry out”, which is maybe the fundamental change. I just wanted to clarify with the Minister if that was her intention in that clause. The next question I have, in relation to the definitional section, is that because the select committee, I understand, has deleted the clauses in relation to a specific definition of “life insurer”. I just wanted to understand how, following that change, if the Minister agrees to that change from the select committee, and where those obligations would otherwise be reflected in the bill. The third definitional question that I wish to ask is in relation to, I think, clause 4(4)(a)(ii), and that’s just under that “life insurer” section in the bill. It specifies here that payments can be in “a corresponding sum in cash or in other physical forms.” I’ve looked at the primary piece of legislation in relation to whether that is, in fact, defined in the definition section of the principal bill. Therefore, I just wanted to know from the Minister what other physical forms of payments were envisaged. Obviously, we can think of a few that might come to the top of our head—so, for example, gold would be one, I’m interested to know whether that is intended in that physical form; cryptocurrency might be another form. That is something that I just wanted some clarity on in terms of the nature of those types of transactions as to what that might be applied to. I did have some other questions that have been covered by Dr Duncan Webb and Lawrence Xu-Nan—I won’t repeat those. Those are my questions in relation to that definitional section. Hon NICOLE McKEE (Associate Minister of Justice) (20:25): Thank you, Mr Chair. Yes, crypto, gold, precious metals are all to be in there, as well. Just looking at what the member had mentioned about clause 4(2), “definition of designated non-financial business or profession”, and the member was talking about the carry-on provision. The businesses find that the definition of a “designated non-financial business or profession” is quite unclear for them. The amendment will modify the definition to clarify that anti – money-laundering obligations will also apply in those situations when a designated non-financial business or profession assists its client but has no direct involvement. The two specific situations that the amended definition captures are to do with managing client funds and preparing to carry out activities. Managing client funds is an activity that carries anti – money-laundering obligations, except where the client funds are sums paid as fees for services provided by the designated non-financial business or profession, and the updated definition also makes it clear that preparing to carry out certain activities is itself considering an activity and carries the corresponding anti – money-laundering obligations. When it comes to clause 4(4), providing a new definition of a “life insurer”, this amendment was intended to just address a gap that was in the Act. The upcoming changes in the next bill will mean that it’s no longer required. My officials recommended, through the departmental report, that it should be removed, and the Justice Committee agreed to that removal, but it will be removed in the next bill. VANUSHI WALTERS (Labour) (20:27): Thank you, Mr Chair, and thank you to the Associate Minister of Justice for her engagement thus far. I also had a couple of questions in relation to the interpretation section. Just as a supplementary to Dr Duncan Webb’s comment on “beneficial owner”, I do wonder whether there is the possibility for an unintended consequence in terms of the addition to that definition. As Dr Webb pointed out, the initial definition is current legislation is quite broad, with the specificity in amended section 5(1), amended by clause 4, both (i) and (ii), it just seems that there might be a potential risk that that will be seen to be the stretch of the definition. For example, a beneficial owner could be a customer of a customer, but it doesn’t look at whether it’s possible for that chain to be longer. I just want the Minister’s view about whether there’s potential for the addition of that section not to provide more specificity but, actually, to limit the scope of what effective control could be. The other issue that Dr Webb raised was on the prescribed threshold. He asked about what that was. My question is about where that threshold should be—so whether the Minister considered that it may be more appropriate for that threshold to be in primary legislation, as opposed to secondary legislation. My third question is in relation to clause 4(3). This is the one that replaces the definition of “trust and company service provider”. It also uses part of the current definition and adds on a new paragraph (b). My question to the Minister is about the effect of excluding a person that is a financial institution in those additional circumstances, and the rationale for that. My fourth question is in relation to the definition of “money or value transfer service”. Clause 4(4)(a)(i) says “accepts, or is involved in the acceptance of, funds or value”. My question is about the broad framing of using those words “or is involved in the acceptance of”. Is there a risk that that language is too broad, and did the Minister consider either a more defined scope of that to ensure that individuals who shouldn’t be caught in that transfer aren’t caught who might have a very peripheral role but may still be involved in the acceptance? Dr LAWRENCE XU-NAN (Green) (20:30): Thank you, Mr Chair. While we’re waiting for the Minister to get some advice on the previous questions, I do want to move on to—we’re looking at some changes from clauses 6 to 8, particularly when it comes to the replacement of customer with person. Noting the definition of customer within the anti - money-laundering and countering financing of terrorism (AMLCFT) legislation, particularly in section 5 of the principal Act, I want to check: in general, “customer” is referring to a physical person in most cases, but “person”, for example, could include a legal entity. Noting that clauses 6, 7, and 8 amend sections 14, 18, and 22, I want to check with the Minister on what are the potential implications of changing “customer” to “person” and “person” being interpreted as a legal person—ergo, potentially a company. Would that affect how we interpret that particular clause overall? Also, in the same way that we’re changing from customer to person, yet I don’t see the cross-heading being changed. What is the implication, then, of not having the cross-heading updated to say customer or person, regarding any of those sections as well? Hon MATT DOOCEY (Minister for Mental Health) (20:31): Thank you, Mr Chair. Just in response to the member, Dr Lawrence Xu-Nan, why are we replacing the word “customer” with “person” in the sections of the Act dealing with customer due diligence requirements? Why is it not appropriate to use “customer”? The word “customer” is defined in section 5 of the Act as “(b)(ii) a person conducting or seeking to conduct an occasional transaction or activity”. Customer due diligence requirements refer to a customer seeking to conduct an occasional transaction or activity—well, this creates a circular and confusing requirement as a person seeking to conduct an occasional transaction is already a customer. Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (20:32): Thank you, Mr Chair. Keen to just ask a couple of questions of the Minister. The first relates to the amended section 5(1), inserted by clause 4, in particular clause 4(a)(ii) of that. It’s been touched on, but I want to raise a different matter, particularly the section that talks about a service that “pays, or arranges for the payment of, a corresponding sum in cash”—this is the definition of “money or value transfer service”. Now I’m just concerned about the word “corresponding” in there, because if I give you $1,000 worth of gold and then you transfer to someone else $1,000, that is a corresponding amount of value—that’s what corresponding means. But, in fact, that’s not how money-laundering works. The way money-laundering works in nefarious places is you give me $1,000 worth of gold and I give the person you nominate $800 worth of cash. In fact, by definition, the number doesn’t correspond because I skim my money-laundering commission off the top. So “corresponding” is the wrong word. Now, there might be some relationship between the amount of gold I give you and the amount of cash you pay to a third party, but it’s not a corresponding amount. I would hate to see someone get off because they say, “Oh, no, I wasn’t doing money value transfers services because I took a 50 percent commission and it didn’t correspond with it.” That’s the first point—a really narrow point about why are you using the word “corresponding” when money-laundering numbers don’t correspond with each other. They’re always taxing it on the way through. The second one is new section 24(4), inserted by clause 9. This is customer due diligence, and the Minister in charge of the bill has made clear that she wants to make it easier for people who are low risk. But my concern is that this clause essentially enables a person to be low risk if they think they’re low risk, because what it says is: “[the] reporting entity is not required to comply with subsection (1)(b)”—which is the upgraded disclosure requirements—“if the customer or person is a trust described in [such and such] section and the reporting entity is satisfied”—the “reporting entity” is the person who’s regulated by this legislation—“that any risks have been mitigated by conducting [certain due diligence]”. So the test is not whether there is a risk; it’s whether the reporting entity thinks there’s a risk. It’s not objective at all. It’s entirely subjective and it’s subjective depending on the mind of the person whose subject to these regulations. If you if you think—mistakenly or unreasonably or stupidly—that any risks have been mitigated by standard customer due diligence, then you don’t have to do this next enhanced step. Now, that can’t be right because there are plenty of stupid entities out there that will make mistakes about that. The test should be an objective one, so why has the Minister introduced a subjective test into something that is as black and white as money-laundering? CAMILLA BELICH (Labour) (20:36): Thank you, Mr Chair. I’ve got some questions that follow on from the sections that Dr Duncan Webb was referring to. The Economic Development, Science and Innovation Committee in this case has decided to delete the originally proposed clause in relation to “politically exposed person”, however, no need to panic, that is retained in the existing piece of legislation under section 26. The question I had was—and it may be a similar issue to the one that the Minister mentioned before, that some of that is going to be included in a new piece of legislation, but if the Minister could elucidate on whether the Minister agrees with that or not, that would be helpful. I do have some questions in relation to the following subclauses. I believe that it might be subclauses 10(2) and (3), which essentially talk about changing the wording from “established” and “conducted” to “establishes” and “conducts”. That indicates a move to look towards something that is actively happening as opposed to something which has happened in the past. I wanted to understand that in terms of the nature of the bill and, obviously, in wanting to understand if there’s any retrospective element to the bill, why that particular language has been chosen. The next two points I want to make are more substantive to the purpose of the bill—sorry, I did have a question in relation to clause 10(1), and it is an important one because in clause 10(1) it amends section 26(1): after “reasonable steps”, “according to the level of risk involved” is added. That has been added by the select committee, but it does have the effect of probably slightly watering down the impact of section 26(1). Rather than just having “reasonable steps”, it’s “according to the level of risk involved”. So “reasonable steps according to the level of risk involved” is obviously a little bit weaker than “reasonable steps” in and of itself. The Minister has said that the intention isn’t to water that down, and so I just wanted to probe that further with that question. The second question I had is in relation to clause 11 and this is along similar lines to my previous point. In clause 11, there is a proposal to look at the primary section 29(2)(c) and to delete “and effective”. Essentially, at the moment, we have a requirement that—I’ve got the primary Act here—“the anti - money-laundering and countering financing of terrorism controls to ascertain that those controls are adequate and effective”; this bill deletes “effective”. So I would really like to know why “effective” is being deleted, because it does strengthen the requirements of this bill. In fact, does the Minister agree with that, given the comments that were made earlier about the fact that, obviously, we want a proportionate bill. We are supporting this bill, we want it to be a good piece of legislation, but it does appear that that’s been weakened. I think especially those last two questions in relation to clauses 10(1) and 11 are quite important to the purpose and the functionality of making sure that this is still consistent with the purpose of the primary piece of legislation. I’d be grateful if the Minister could address those. Hon MATT DOOCEY (Minister for Mental Health) (20:40): Thank you, Mr Chair. I just thought I’d gather up a few questions there. There was a question around thresholds. I’ve been advised that the threshold in place is 25 percent in 2011, amended to be more than 25 percent in 2013. Not identified as problematic in the statutory reviews—they haven’t looked to change. I’m comfortable that this remains in regulations. The question was asked about why other enhanced customer due diligence checks are still required for low-risk trusts. Low risk is not the same as no risk. Completely removing the requirement for enhanced customer due diligence for trusts does not align with the risk-based approach. The intent is to remove the requirement to verify the source of fund or wealth, not to remove the requirement to collect the information on the source of funds or wealth. The question that was asked: why is it not practical for banks to confirm whether banks they correspond with have effective anti - money-laundering and countering financing of terrorism controls? To effectively carry out this requirement, a bank would need to complete an in-depth assessment on whether the controls are functioning as intended. That requires access to the other banks’ internal information. The final question—I think it’s clause 10(1)—what is “politically exposed person”? Politically exposed persons are people who hold or have held important public roles in another country—for example, presidents, senior politicians, top Government, military, or court officials, heads of State-owned companies, or key political leaders. The definition also includes their immediate family members and beneficial owners. It allows business to apply the requirement proportionately to their level of risk. Dr LAWRENCE XU-NAN (Green) (20:42): Thank you, Mr Chair. I’ve got a couple of questions for the Minister, also noting that the question might be quite specific. The Minister can feel free to take some advice around that as well. On to clause 9—and after clause 9, I’m going to move on to clause 13. In terms of clause 9, I note that the Minister mentioned before in terms of synthesising from, potentially, three different supervisors to one supervisor, and that particular supervisor will be the Department of Internal Affairs (DIA). I want to check with the Minister: in the regulatory impact statement, both the Reserve Bank of New Zealand (RBNZ) and also the Financial Markets Authority (FMA) actually do not support the changes that are being proposed. I do note the Minister of Justice’s response to the RBNZ and FMA, but I want to specifically focus on a couple of things in paragraphs 136 and 137 of the regulatory impact statement. This is on page 28. The three areas I want to address are, first of all, that the RBNZ’s concern is around the depth of the analysis. I just want to check, because that’s not part of the response by the Ministry of Justice, whether the Minister believes that the level of analysis or depth of analysis for this change has been met. The second question is around the suggestion by both the RBNZ and FMA that there should be legislative improvements at the same time, prioritised over the structural changes, such as reducing from three supervisors to one. Noting that this is a series of bills, does the Minister think that that legislative improvement has also been met, alongside the structural changes that are being proposed? My final question, again, was that in the response from the Ministry of Justice to the RBNZ and FMA, in paragraphs 140 to 143, the RBNZ specifically mentions costly and disruptive structural changes. I just want to check with the Minister what is meant by “costly”. With the changes we’re looking at, how costly would that be? Have there been any figures that the Minister has received from officials on that? On to clause 13—this is “Section 52 amended (How records to be kept)”. I know this is something that, as a select committee, we did discuss, but I want to check with the Minister. For this particular one, I’m assuming that the person who is required—I can’t remember if this is something we discussed in select committee, and it definitely is not in the commentary of the select committee. The person who is meant to producing that record or is keeping that record—is that record being kept now by DIA as the single agency, the single supervisor, that’s responsible for all of that? That’s my final question around clause 13. I’m happy, based on the Minister’s response, to move on to subsequent sections. CHAIRPERSON (Greg O'Connor): I call the honourable Minister. But, just before that, can I just say that the noise and the volume of the attempts to close down do bear no relationship to the chance of getting it—can I just remind members. Sorry, Minister. Hon MATT DOOCEY (Minister for Mental Health) (20:45): There is excitement in the Chamber. CHAIRPERSON (Greg O'Connor): There is—perhaps because you’re in the chair, Minister. Hon MATT DOOCEY: Understandably with this legislation—very excitable. I do want to acknowledge Dr Lawrence Xu-Nan with his persistent and detailed questioning. It’s always important to keep Ministers on their toes—always impeccably dressed. When I think of the member Dr Lawrence Xu-Nan, I think of someone who’s ahead of his time in a way, and that’s because the questions he’s just asked are about the bill that will come after this one. Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (20:46): Thank you, Mr Chair. I wonder if I can move ahead a little bit to a concept that’s been troubling me. That is in new section 67B, inserted by clause 17. I know I’m jumping ahead, but I really want to give officials an opportunity to have a think about this, because it’s got this concept of a stored value instrument, and it’s got this bizarre phrase. It says it’s a “portable device”. Now, I would have thought my iPhone or Game Boy was a portable device, right? But the use of the word “portable device” bears no relationship to what it then goes on to say, because it’s “for example, a voucher or a casino chip” or something else “that can be redeemed for cash”. It might include, in the old days, a cheque or a promissory note as well. It includes gold, silver, precious metals, but doesn’t include a debit card or a credit card. Now, with “portable device”, there’s a real danger, it strikes me, using the phrase “portable device”, where it just seems to be a random, made-up phrase that bears no resemblance. What it seems to me is it means “personal property, including documents and tokens which can be redeemed for cash.” Now, if that’s what you mean, that’s what you should say, but a “portable device” just doesn’t mean that. The risk is when you get something which isn’t one of the named things, such as precious metals—when you get, for example, a cash-bearing card which isn’t a recognised debit card; an Air New Zealand travel card, for example, which carries cash on it. Is it a portable device? Well, I don’t know, because I don’t know what a portable device is. If we really mean “personal property, including documents which can be redeemed for cash”, I think that’s probably what we should say, rather than this made-up phrase there. Going backwards, if I can, to clause 13, amending section 52, which sets out time limits for reporting, there are some strange things that go on there. If I look at the new subsection (2)(b), it says you’ve got to report or provide records “(i) by any specified date given in the notice that the person who requires the records considers reasonable…”. Now, why does it have to be that the person giving the notice requires? It should just say, “that is reasonable”. Once again, we’ve got this “What the regulator thinks becomes the rule.” Either it’s reasonable or it’s not. The thought processes of the regulator should not affect whether it’s reasonable or not. The other point is this: that you’ve got this strange thing going on, because you’ve got any specified date that is reasonable in subsection (2)(b), and when you go to subsection (3), if the production is a matter of urgency, you can require them to be produced as soon as possible. Now, “as soon as possible” might be different from any specified date, and it might be later than a specified date. You’ve got a bizarre situation where, if it’s urgent, you’ve got to do it as soon as possible but not on a specified date, whereas if it’s not urgent, you can provide a specified date, which could be tomorrow. The whole section is, frankly, a bit of a mess, but the worst thing about it appears to be that, when you’re giving a particular date, it has to be reasonable in the mind of the regulator, and there’s no place for the subjective views of the regulator as to what is reasonable or not in such a situation. I’d appreciate some clarity on both of those things. CUSHLA TANGAERE-MANUEL (Labour—Ikaroa-Rāwhiti) (20:50): Tēnā koe, Mr Chair. I know we’re stepping through this quite well, but I do want to revisit one of the responses from the Minister in the chair earlier, Matt Doocey, which—I believe he was referring to clause 9, which talks about enhanced customer due diligence. The reason I’m revisiting it is because, frequently, I get feedback from people involved with Māori incorporations—post-settlement governance entities—about the requirements. While the intention of this bill is to streamline the process, often Māori governance entities are still encountering the barrier of the onboarding process—i.e., they still all have to attend in person, they’re still fulfilling extra identification requirements because they’re perceived as being high risk, etc. My question to the Minister tonight is, number one: because, ultimately, it’s still at the bank’s discretion, will there be a move to streamline processes specifically around Māori governance structures, and will there be a move, whatever decisions are made at the completion of this bill, to enforce these with banks rather than make them at their discretion? VANUSHI WALTERS (Labour) (20:52): Thank you, Mr Chair. My question for the Minister in the chair, Brooke van Velden, is around clause 18, the amendments to section 68. This is “Reports about movement of cash into or out of New Zealand”. New subsection (4) says, “For the purposes of this Act, a person is to be treated as having moved cash or stored value instruments out of New Zealand if the person—”, and then there are a number of defining sections: “intends to leave New Zealand on an aircraft craft or a ship … goes towards an aircraft or a ship through a Customs-controlled area … [or] takes cash or stored value instruments into [that] controlled area … or has cash or stored value instruments in their baggage;”. My question to the Minister is whether there was consideration of the fact that this section might be drafted too narrowly and that it could be possible for someone to be moving such cash or stored value instruments either through another person, with or without their knowledge, or in another person’s luggage. The section itself appears to me to be drafted quite strictly. I just want to have the Minister’s views on that. I just also did want to make the point that, when the Minister in the chair spoke earlier about the replacement of “customer” with “person”, I do agree with that change, because I do think that it recognises that they can be secondary beneficiaries. But, again, it goes to the point that I made earlier: anything in the Act that talks only about “customers” or “of customers”, effectively, limits that chain, whereas it would be much more beneficial to just leave it open to “persons” more generally. I don’t know if the Minister wanted to reflect on that as well. In terms of new section 52, inserted by clause 13—this is the one about how records are to be kept—there are some specifics around making records available urgently, and there’s a process in the existing legislation about the individual required to produce the information being able to respond within, I think, 10 working days, but there’s nothing specific about the decision maker needing to consider the response. Just in terms of due process, I’m wondering whether the Minister considered having a more robust process to ensure that the decision maker was considering the response for the production of information before making a decision. Thank you. CARL BATES (National—Whanganui) (20:55): I move, That debate on this question now close. CAMILLA BELICH (Labour) (20:55): Thank you, Mr Chair. There are a few questions which I think have still not been responded to and, I think, a few more clauses in Part 1 to go. In respect of the ones that I’m still waiting for an answer on, the Minister did respond to tell the committee about the definition of “politically exposed person”, but I didn’t receive a response to the reason “according to the level of risk” is inserted by clause 10(1), which I think was when the Minister replied to the other response. Also, in clause 11, the deletion of “and effective”—I’m still waiting for an answer on that, and that goes to the desire to not want it to be watered down. I will skip forward, obviously, because the debate has moved on since I asked the Minister those questions. I just want to check—in respect of clause 19 of this bill, which amends section 69 of the primary Act, there’s an institution here of new subsection (2) and also a reference back to new subsection (1). Now, when I look at the primary Act, there doesn’t appear to be a subsection (1) in section 69. Sometimes, there are subsequent amendments; I think there were, when I was looking at this bill, maybe some unincorporated amendments. That might be why. It would be good to just clarify that, because, if not, it might be important to insert, before (a), a subsection (1) in there to make subsection (2) make sense. If the Minister could get some advice on that. It’s a drafting matter, really. It might be that there’s been an unincorporated amendment from a more recent bill—I think this version was 2025 that I was looking at. That would be helpful. I also wanted to just go back to—and I know my colleague Vanushi Walters has touched on this slightly in terms of the specificity of new subsection 68(4), inserted by clause 18, but just the purpose here. I mean, it is quite an illustrative subsection, 68(4). You’re imagining a money launderer kind of walking towards an aircraft and they’ve got cash on them and they haven’t made a report. It does seem quite specific, so what I just want to clarify with the Minister is: is the intention here to ensure that before someone actually completes the actual act of that cash or similar value moving outside of New Zealand—is the intention with this clause really to kind of provide for the commission of a crime, I suppose, or for this Act to be breached prior to that actually occurring? The intention of the mischief itself, I suppose, in this particular section appears to occur before the actual act of removing the money or stored value instrument from New Zealand. Some clarity around that would be good. I do have some further questions in relation to clause 20 about accompanied cash, but I’ll just see if the Minister has an answer to some of those questions. Hon BROOKE VAN VELDEN (Minister of Internal Affairs) (20:58): Thank you, Mr Chair. Look, I’ll respond to a couple of the queries that have come through from the floor. Firstly, there was a question in regard to Māori governance structures, from Labour. Māori trusts are already exempted under Class Exemption Notice 2018 Part 2. There was also a previous question in regard to record keeping. Record keeping is required for reporting entities and not supervisors. Dr LAWRENCE XU-NAN (Green) (20:59): Thank you, Mr Chair—I will be quick. I guess we do have quite a few quite specific questions, and, again, both this and the next bill are quite technical bills, and I do apologise to the Minister for getting the two bills muddled up, because—well, to be honest, the Minister also did that, so I feel like it’s OK for me to mix the two bills up. I have a question around clause 17, which is “New section 67B inserted”. The Minister before has mentioned that when it comes to stored value instruments, which is the new insertion that we’re looking at here, it does include non-physical currency—bitcoin, for example, and cryptocurrency is something that is mentioned. The question I want to ask specifically is around, for example, non-fungible tokens (NFTs). Now, NFTs are an interesting case study because of the way that it got hyped up and then went away just as quickly. Particularly when it comes to the way that economists explained it, people bought into the hyping up, the inflation, the financialisaton, and it’s very much unmoored from the physical economy. The question with that is: when you have something that gets pushed up, like NFTs, quite significantly, how would we consider that in the context of money-laundering, or using NFTs for the purpose of money-laundering? Again, cryptocurrency and NFTs, like bitcoin, operate quite distinctly, even though some of the underlying technology is similar. I just want to check with the Minister, specifically in the case of the phenomenon that we saw with NFTs, how that would work and what happens when people use that for money-laundering purposes. Moving on to clause 20, which is “Section 70 amended”—I know that my colleague Camilla Belich also has a question on that. I want to check specifically with the replaced paragraph (d) when it comes to “Unaccompanied cash”—this is subparagraphs (iii) to (v). It’s the same question I had before regarding when we’re looking at cryptocurrency or when we’re looking at NFTs. I want to check, in terms of the underlying blockchain technology that underpins cryptocurrency but also NFTs, how would that work in conjunction with the reporting requirement that we see here, and at what point of that blockchain, if it can be described as such, would we start seeing some of the requirements there? The follow-up question from that is: when we see things like cryptocurrency and when we see things like NFTs, and, potentially, things overseas could develop quite fast, is what we’ve done here in terms of reporting requirements or any other kind of compliance requirements agile enough to anticipate new forms of stored value instruments? That is my final question to the Minister. Hon NICOLE McKEE (Associate Minister of Justice) (21:02): Thank you, Mr Chair. My apologies, colleagues, for having to leave the chair, but upon my return, I have a whole lot of notes. I’m going to read these notes out, having not heard the question, and invite those members who do not understand my answer to ask the question again. I don’t know who asked these questions. I’m going to refer to new section 67B, inserted by clause 17. CHAIRPERSON (Teanau Tuiono): I only got here 15 minutes ago as well, so we’re in the same boat on this one. Hon NICOLE McKEE: Ha, ha! A portable device captures cards and objects that are not related to debit or credit card mechanisms. The latter includes many of the systems used by cell phones and mobile devices, so are already captured by the Act. Clause 17, NFIs can do the same with shares, not in and of itself money-laundering. It is for other regulators. Clause 19(3) does not exist. Hon Members: Ha, ha! Hon NICOLE McKEE: Just saying! Section 69(a) does exist and contains the word “cash”. It’s a drafting error that can be picked up at proof assent. The error is in clause 19(4): 68 should be 69. CHAIRPERSON (Teanau Tuiono): I can confirm that clause 19(3) doesn’t exist, so congratulations to whoever asked that question. Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (21:04): Thank you very much. I just want to ask a couple of questions. I think they might be my final questions for the night. The new section 90A, inserted by clause 25, is the first question: the court must order that recovery from pecuniary penalty be applied to the supervisor’s actual costs. This is a little confusing, because I had a look at some of the cases when I was preparing for this, and the court already orders costs. The court orders court costs at a given rate, which won’t be exactly the costs incurred, but that is in addition to the pecuniary penalty. They get penalty and court costs, and now you’ve got this strange situation where you’re going to take court costs from the pecuniary penalty, so the court might not award additional costs. Has the department, the Associate Minister of Justice, considered the relationship between court-awarded costs, which are routine when these cases are won, and what the relationship will be when you’re saying we’re taking full costs from the penalties imposed? My second point relates to the amendment to section 132 in clause 26, which adds a power to cooperate with foreign counterparts conducting inquiries. Now, this is very tricky, because we have a comprehensive framework for cooperating with foreign Governments on investigations, and it’s the Mutual Assistance in Criminal Matters Act 1992. That Act is an important one, because we cooperate with particular Governments whom we trust, and we don’t simply allow our enforcement agencies to be the arm of any foreign Government, for obvious reasons. But here it doesn’t appear that there’s any checks on that. It’s also the case that the Mutual Assistance in Criminal Matters Act identifies that some civil proceedings can be treated as if they are criminal. This regime is a classic example where, essentially, you have civil penalties, but it’s a quasi-criminal regime. My question is: does the new supervising agency have just unlimited powers to cooperate with North Korea or Russia in money-laundering matters, or is it subject to the Mutual Assistance in Criminal Matters Act, which has a very careful regime about how we deal with foreign Governments? I hope it’s the latter, because I wouldn’t want to see decisions about what foreign Governments we cooperate with, essentially, in the hands of people within departments—bureaucrats, for want of a better word—because it’s actually a matter of high national importance. Hon NICOLE McKEE (Associate Minister of Justice) (21:08): Thank you, Mr Chair. To the member from the Greens, Dr Lawrence Xu-Nan, I actually meant to say “NFTs”, not “NFIs”, when I mentioned before that you can do the same with shares—not in and of itself money-laundering. It was meant to be NFTs that I said, which apparently was the question from that member. To Dr Duncan Webb, the pecuniary penalties, the supervisors looking to recover penalties and costs—this provision just clarifies that supervisors can bring recovery proceedings to those penalties. In other words, it’s also saying that they themselves are entitled to receive their penalties that have been awarded to them and allowing that. It’s, effectively, bringing the Anti-Money Laundering and Countering Financing of Terrorism Act into alignment with similar Acts, such as the Financial Markets Conduct Act, where they too are able to look for costs to be awarded to them. Clause 26 is amending section 132. The member spoke about international collaboration, and I guess the thing we’ve all found is that money-laundering is international. It’s coming here. We’ve got drugs coming here, money leaving. We’ve got money transiting through here. In order to stop this worldwide use of the internet, I guess, and other forms of getting money and cash in and out of different countries, we have to collaborate with other countries. This is about improving our international relations, improving our international collaboration, so that we can stamp down on organised crime, stop the illicit trade of drugs and money coming through our country, and be able to work together with other countries to be able to stop that flow transiting through New Zealand. Clause 26, amending section 132, is about improving that international collaboration. There’s a supervisor penalty recovery also in clause 26(2), because it’s not currently clear in section 132 whether the AML supervisors have the power to recover their penalties and costs. We are establishing that in clause 26(2) in order to help with clause 25, providing for court orders—a penalty can be applied to the supervisor’s actual costs that have been incurred, as well. CHAIRPERSON (Teanau Tuiono): I’d just note that we have been moving methodically through the bill and the Minister has been engaging, so there’s not that much left to go unless there are further questions, but I will go to Camilla Belich. CAMILLA BELICH (Labour) (21:11): Thank you, Mr Chair. Thank you to the Minister for her engagement on this. There are a few other bits which I think haven’t been covered to date, which I can move through quite quickly under this Part 1 section. I just have some questions, as I think I indicated earlier, around clause 20, just jumping back there for now. Lawrence Xu-Nan asked some questions about this, so I won’t go into this in too much detail, but I just wanted to check with the Minister that the main purpose of the “accompanied cash” and “unaccompanied cash” definitional changes appears to be the change to the definition to ensure that stored value instruments are covered by the accompanied and unaccompanied provisions there, as well; so just some clarification on that. Then, I just wondered if we could briefly touch on the civil liability changes that have been included in clause 22. These are adding to the existing civil liability definition, and we’ve been talking about the pecuniary penalties that follow from that, but I just wanted to ask the Minister if this meaning of civil liability—it appears to me to be bolstering this, in providing a few other areas in which the civil liability will be met. I just wanted to check that was the Minister’s understanding—that it was, in fact, expanding that definition. The final question I wanted to ask, which I don’t believe has been touched on, is just to look at the censure process which is outlined in detail in section 80A, and that was changed from section 80 by the select committee. I’m just wanting to understand the process, really, for appeal. There’s quite a detailed process about the imposition of a censure and how that would work. Then, of course, there is a provision here in new section 80B to allow that to be appealed to the District Court. There’s no time frame issued here, so I just wanted to check with the Minister if that was intentional, and what date the appeal would need to be raised if there was an appeal against a censure—obviously, the District Court has its own limitations, but if it was intended to be simply from the date they received that censure or if there were any other applicable time frames, because it doesn’t appear to be as detailed as some of the other provisions in this part. Those were the quick questions that I don’t think have been touched on. Hon NICOLE McKEE (Associate Minister of Justice) (21:13): Thank you to the member for her questions. With the unaccompanied and accompanied cash at the border—the border cash report—transportation of cash that’s $10,000 or more needs to have a border cash report that’s done, and it’s currently not specified when this report must be made for unaccompanied cash or stored value instruments. The amendment sets the timing requirements that, basically, say that the report has to be made 72 hours before the cash or stored value instrument is moved. This will clarify that the border cash reporting obligations and improved customs enforcement capabilities will actually happen. When it comes to the civil liability acts that the member mentioned in section 78, all breaches of an obligation are a civil liability act. Section 78 provides a specific list of such breaches. The member asked whether or not we’re making it more rigorous, and we certainly are. The amendment explicitly adds three breaches to the list: failing to submit the suspicious activity report, failing to undertake a risk assessment in accordance with regulations, and failing to submit an annual report to an Anit-Money Laundering and Countering Foreign Terrorism supervisor. Those ones, in themselves, are making it a more robust regime, so that we can capture people. Dr LAWRENCE XU-NAN (Green) (21:15): Thank you, Mr Chair. I have one final, tiny question for Part 1, and that’s to do with the Minister’s Amendment Paper. Now, in the Minister’s Amendment Paper, it actually does transfer clause 24 from this bill to the next bill, but the explanatory note says “to ensure that the provisions relating to censures come into force at the same time…”. Noting we can discuss this a little bit later, those two have got two different commencement dates. But it says, “in that Bill relating to the making secondary legislation.” My understanding is that censures are not secondary legislation. Would that be correct? Or is it secondary legislation? Hon NICOLE McKEE (Associate Minister of Justice) (21:15): Thank you. My understanding is that we have pieces of secondary legislation that are actually coming into the Act, so, effectively, we’ve got regulations—information sitting in regulations—that we will be taking out of regulations and putting into the Act. That’s why we’re doing this manoeuvring. SUZE REDMAYNE (Junior Whip—National) (21:16): 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 54 New Zealand Labour 34; Green Party of Aotearoa New Zealand 14; Te Pāti Māori 5; Ferris. Motion agreed to. CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendment to Part 1 set out on Amendment Paper 572 be agreed to. Amendment agreed to. Part 1 as amended agreed to.