Concerns over anti-money laundering and Terrorism Bill details

A solicitor representing the pawn broker industry got several laughs when appearing before the committee. Photo: Getty

The potential ability for chief executives to exempt organisations from proposed measures to combat money laundering have been questioned.

Both the Privacy Commissioner and the Legislation Design and Advisory Committee voiced concerns about the proposals, saying that such a power should only be held by a Minister.

The Law and Order Select Committee is considering the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill, which would extend requirements to verify customers and keep detailed records to lawyers, accountants, real estate agents, and businesses trading in high value goods such as pawn brokers.

The first phase of the bill introduced the requirements, which also require a transaction report to be sent to the police, to the Reserve Bank, Financial Markets Authority, and the Department of Internal Affairs.

Under the proposed legislation, a Government chief executive would have the power to approve an exemption to the law.

But Privacy Commissioner John Edwards said this was dangerous, as it allowed a chief executive to set aside privacy rights by administrative order.

A similar issue had been considered the recent Customs and Excise Bill, and was deemed not appropriate.

When asked by Labour MP Stuart Nash whether an included clause that noted the Privacy Commissioner should be consulted beforehand was adequate to allay his fears, Edwards said it was not.

"I can be consulted but my views can be ignored, which does happen."

The appropriate place to decide an exemption was Cabinet, he said.

Megan Richards, a member of the Legislation Design and Advisory Committee's external subcommittee, agreed.

“It’s not uncommon where matters are of minor technical details or with little or no importance to the rights of individuals, now in this scenario it is important detail and there is impact on the rights of individuals so in our view we consider the CE in this case is not the appropriate decision maker.”

Nash again asked whether it could be unwieldy and time-consuming for the decision to go to a Minister, but Richards said that was a minor point to consider.

“There may be administrative efficiencies but the question is is that the appropriate reason to grant such a wide power?”

During the dense hearing there was a moment of humour when it came time for the New Zealand Licensed Traders' Association to appear.

Representing the pawn broker industry, who will have to conform to the new rules when transactions are more than $15,000, solicitor Rae Nield received several chuckles when introducing herself.

“Today we’re here mostly to talk about pawn, and I have to say I like pawn very much, as long as it’s spelt with a W.”