by Sonia Speedy
ISI chief executive Vance Arkinstall says he was encouraged by the amendments recommended by the Foreign Affairs, Defence and Trade Select Committee on the Anti-Money Laundering and Countering Financing of Terrorism bill.
This included changes around adopting a more risk-based approach; harmonisation with Australia; and acknowledgement that adequate time is needed between the enactment of the legislation and implementation to give firms time to prepare.
However, the committee did not look to have moved on "carving out" life insurance from the anti-money laundering legislation, which was the ISI's fourth key concern. The Bill passed its second reading in Parliament last week.
"It's a bit of a shame that we don't appear willing to adopt a carve out like Australia, which effectively removes the Mum and Dad type of policies which really contain no possible element of money laundering. But for reasons that are not entirely clear, they seem to have overlooked that," Arkinstall says.
While the ISI was pleased to see many of its points had been listened to, it was not "jumping over the moon" with encouragement for the legislation, he said.
"It is going to be a huge cost to the financial industry," he says.
A report by Deloitte for the Ministry of Justice last year put the start-up cost for affected firms in complying with the requirements at around $111.8 million.
"The reality is that we have no option, we have to be part of the global community and anti-money laundering legislation. We have to meet our obligations to the international community and we accept it on that basis," Arkinstall says.
"But we are pleased that the changes have gone some way towards just making the obligation or responsibility that much lighter."
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