Any Government move to quickly extend anti-money laundering laws to include lawyers, accountants and real estate agents is not a solution to dealing with foreign trusts, says an industry expert.
In an effort to stem the flow of dirty money, institutions such as fund managers, derivatives issuers, debt collectors, money changers and casinos must have systems guarding against money laundering.
They must perform due diligence on customers, monitor accounts and report suspect transactions to police.
The Government, however, has been in no rush to widen these rules to include lawyers, accountants, real estate agents and businesses that deal in high-value goods, such as auctioneers and bullion dealers.
But Prime Minister John Key said yesterday afternoon - in response to questions over the Panama Papers - that the second tranche of the law that would cover these professionals needed to be brought forward.
Although indicating the Government would move "as soon as we rapidly can", Key did not give a specific time frame of when it would happen.
However, crime prevention and money laundering expert Ron Pol said today that fast-tracking the law was "almost a complete red herring" when it comes to dealing with foreign trusts.
These trusts have been in the spotlight since the Panama Papers surfaced last month, along with accusations that New Zealand was operating as a tax haven.
Pol, who researches money laundering, said the issue with foreign trusts was not that lawyers, accountants and real estate agents were not covered by the law.
He said that including lawyers and accountants under the regime will make almost no difference, if the foreign trusts regime remains unchanged.
"By all means bring tranche two forward" he added. "That's a good thing for other reasons. But in relation to New Zealand foreign trusts it is, quite simply, not the solution to this particular issue. The way that Kiwi foreign trusts are designed is the issue.
For the same reasons they are attractive to legitimate users, they are also attractive to tax evaders, money launderers, arms traffickers and more. Closing off the bit that is attractive to criminals is the real solution."