New Zealand Law Society - Committee’s concerns over AML/CFT results in proposed change

Committee’s concerns over AML/CFT results in proposed change

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A committee that scrutinises parliamentary processes has raised concerns over parts of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (AML-CFT).

The Regulations Review Committee analyses delegated legislation and draws attention to issues that it considers should be considered in making regulations.

In its review of the year to the dissolution of Parliament, the committee, which is chaired by the Labour Party MP David Parker, found some issues with AML-CFT, notably with clause 38, which it then raised with the Law and Order Committee.

“This clause sought to replace section 139 with two new sections relating to the disclosure of information. The provision as introduced appeared to suggest that the regulations could extend the purpose for which information may be disclosed,” its 2017 report says.

“In particular, the regulation-making power did not require recipients of information under a specific section to have a “proper interest” in receiving the information, seemingly inconsistent with requirements elsewhere in the bill. To address these issues, we recommended that the committee amend clause 38 so that it sets out clear limits on the regulation-making power relating to information sharing, and retains the “proper interest” requirement.”  

The committee’s report notes that the Law and Order Committee acknowledged that “the framework provided for information sharing under clauses 38, 40, and 48 is unduly broad” and noted its “concerns about the breadth and implications of these provisions” with regard to the new sections that would be inserted by clause 38.

That committee has recommended amending clause 38 to delete clauses 139 and 139A of the bill. It also recommended the addition of clause 38A to insert new section 139A in the Act, which would allow regulations relating to information sharing to be made by Order in Council. It would impose additional safeguards such as that, before making regulations, the Minister must consult with the Privacy Commissioner, among other people.

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