Follow the money

Written By: - Date published: 8:21 am, October 30th, 2016 - 30 comments
Categories: capitalism, Economy, tax - Tags:

shush money

What do auctioneers, bullion dealers, precious metal and stone dealers, motor vehicle and boat dealers, antique and art dealers, second hand dealers and pawnbrokers all have in common? They exchange things for lots and lots of cash, and they aren’t banks.

This makes them particularly attractive to drug importers and other organised crime syndicates, tax evaders, and others for whom we need to Follow The Money.

So before Christmas, we are likely to see introduced into the House, Phase 2 of the Anti-Money Laundering and Countering Financing of Terrorism Act (Act).

Phase 1 of the Act came into effect in 2013 and requires organisations such as banks and casinos to conduct customer due diligence. A number of people may through their own personal experiences with their bank, be familiar with the requirements which are to:

  •  Obtain and verify the identity of customers
  • In some circumstances, verify sources of funds
  • Conduct ongoing customer due diligence and monitor account activity
  • Identify and report any suspicious activity

Phase 2 involves extending the Act to cover other professions such as lawyers, accountants and real estate agents. We love them all.

The Government aims to introduce a Bill to Parliament before Christmas, with the adventurous aim of getting it into law by July 2017.

The impact of the coming changes means that lawyers, accountants, and real estate agents will be required by law to:

  • conduct a higher level of due diligence on clients including obtaining identification in a wider range of circumstances than we do currently
  • verify the source of client funds
  • report any transactions that may be suspicious to the Police
  • In addition, lawyers will be subject to the supervision, monitoring and enforcement provisions of the Act. Who will regulate the legal profession is yet to be announced.

Personally, I’d like to see a whole section of the act about regulating trusts who shift big chunks of capital around from one property to the next. Maybe to capture more in the Proceeds of Crime Act.

Would be good to hear from lawyers who are in the tax structuring field on this, and on whether it integrates with the Australian legal framework.

Follow The Money.

30 comments on “Follow the money”

    • Ad 1.1

      I was tempted to put in that link myself. He was my favorite character in that show.

      In one of Bruce Jesson’s earlier books he mapped out how closely a set of fifty companies and shareholder families were very closely related. It may be more diffuse now, but the line still identifies those who hold long term power in New Zealand:

      Follow the money.

      • Anne 1.1.1

        Follow the money said Deep Throat. So they did. And it brought down an American president. This Nat government will do everything to avoid following the money. Based on past experience, it will fiddle around with legislation but the end result will be way short of satisfactory. Why? Well, we know why. Too many of their big donors are – or have been in the past – mixed up in shady deals and tax evasion.

        Quite simple really.

  1. BM 2

    How would a real estate agent go about meeting all these obligations?

    • Draco T Bastard 2.1

      The Market will provide?

      • BM 2.1.1

        Should it really be up to a real estate agent to make the call on who’s dodgy or not?

        I can’t really see how that would work?

        Hey Chinese guy you look a bit suss, so we’re going to check you out, which will cost you an extra $5000.
        White person, no chance you’d be breaking the law, no extra costs for you.

        Obviously for fairness and arse covering every person who buys a house is going to have their finances and background raked through, which will no doubt add extra costs to the purchasing of a property.

        Can’t see that going down very well with people.

        • Draco T Bastard 2.1.1.1

          Obviously for fairness and arse covering every person who buys a house is going to have their finances and background raked through, which will no doubt add extra costs to the purchasing of a property.

          Probably but it will decrease costs for society and thus the house buyer will actually be better off.

          Of course, banning foreign ownership will seriously decrease those costs as well.

        • AmaKiwi 2.1.1.2

          “Should it really be up to a real estate agent to make the call on who’s dodgy or not?

          Real Estate agents won’t have to. They simply won’t take cash. They will require payment through a bank. The bank has already done the investigating because that’s part of what they are required to do.

    • One Anonymous Bloke 2.2

      The right wing ones will have to wait for someone smart to figure that out for them.

  2. Draco T Bastard 3

    This makes them particularly attractive to drug importers and other organised crime syndicates, tax evaders, and others for whom we need to Follow The Money.

    Cashless

    Makes it real easy to do just that as well as helping to ensure peoples privacy.

    Once every country in the world does it crime based around money will pretty much be eliminated.

    • ropata 3.1

      The problem isn’t paper currency it’s the private banks and lack of regulation.

      There are exploitable bugs in any system, paper or electronic or groats.

      • Draco T Bastard 3.1.1

        There are exploitable bugs in any system, paper or electronic or groats.

        True so the one to choose would be the one with the least bugs and greatest advantages. IMO, that would be electronic.

        • One Two 3.1.1.1

          It’s possible you may have thought superficially before arriving at a conclusion…

          “Greatest Advantages”…

          Yes, quite!

          • Draco T Bastard 3.1.1.1.1

            It’s possible you may have thought superficially before arriving at a conclusion…

            Nope.

            Cash lends itself to criminality while an electronic system would help eliminate it.

  3. Ralf Crown 4

    The Nazis and Hitler invented the system, Stalin, Mussolini, Kim Jong-Il, Qaddafi, and a few more used it and loved it, now coming to you in New Zealand.

    • Ad 4.1

      What are you on about?

      • ropata 4.1.1

        he’s implying that monitoring fraudulent activity == totalitarianism

        as if we haven’t already seen several big-brother-style abuses by our wall st. bankster in chief and his pals in the GCSB

  4. Henry Filth 5

    Let’s hope that the compliance burden of this bout of bureaucracy will involve better designed systems than the last one.

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