Politicians targeted under new anti-money laundering bill

Heads of government departments and high ranking council officials should be included in the list of “politically exposed persons” who come under extra supervision under new anti money-laundering laws, a parliamentary select committee has been told.

The Anti Money Laundering and Counter Terrorism Bill, which is being brought in to comply with international obligations, includes a provision targeting politically exposed persons (PEPs) and their families, as people whose position means the opportunity for money laundering or other corrupt practices is unusually high.

The list includes the prime minister, ministers of the Crown, the Reserve Bank governor, Supreme Court judges, the Chief of the Defence Force, and top executives in govt owned businesses, as well as ambassadors and high commissioners.

“The list doesn’t really address areas where corruption and the potential for money laundering, are most likely to exist,” Transparency International’s senior lawyer and director, Trevor Roberts, told parliaments foreign affairs and defence select committee yesterday.

“The upper echelons of local government” and “senior executives of government departments” are not included by the clause, he said, and “one has to ask whether members of parliament should be included themselves as politically exposed.”

The legislation also stipulates that the families of those who are deemed “politically exposed persons” are also covered by the law’s higher level of supervision.

Precisely what “poetically exposed persons” will have to comply with is not made clear in the bill.

The law defines the group and states such persons must perform extra due diligence for any persons or transactions which fit certain criteria, but also must “meet any other requirements prescribed by regulations and that apply to politically exposed persons.”

What will be contained in those, and other regulations, is not yet known. While this is not uncommon with legislation, the extent to which this bill has provisions allowing for undefined regulations to be brought in at a later date has been a consistent criticism of the law change.