Services › Anti-Money Laundering and Countering Financing of Terrorism
- Who does what?
- What will businesses need to do?
- How will it affect consumers?
- Ministerial Exemptions
- Supervisory Framework
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OverviewMoney laundering is how criminals disguise the illegal origins of their money. Financers of terrorism use similar techniques to money launderers to avoid detection by authorities and to protect the identity of those providing and receiving the funds.
The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act) places obligations on New Zealand’s financial institutions and casinos to detect and deter money laundering and terrorism financing.
The Act will ensure that businesses take appropriate measures to guard against money laundering and terrorism financing. This enhances the reputation of individual businesses, and of New Zealand as a safe place in which to do business.
The Act will come into full force on 30 June 2013.
Who does whatThe agencies who will supervise the new AML/CFT regime and the businesses (known as reporting entities under the Act) they will monitor are:
- The Reserve Bank of New Zealand supervises banks, life insurers, and non-bank deposit takers.
- The Financial Markets Authority supervises issuers of securities, trustee companies, futures dealers, collective investment schemes, brokers, and financial advisers.
- The Department of Internal Affairs supervises casinos, non-deposit taking lenders, money changers, money remitters, payroll remitters, debt collectors, factors, financial leasors, safe deposit box vaults, non-bank credit card providers, stored value card providers and cash transporters, and any other reporting entities not supervised by the Reserve Bank or the Financial Markets Authority.
The New Zealand Police Financial Intelligence Unit investigates suspicious financial transactions.
What will businesses need to do?If you operate a business that falls within the definition of reporting entity under section 5 of the Act you will need:
- A Risk Assessment of the money laundering and financing of terrorism that you could expect in the course of running your business
- An AML/CFT Programme that includes procedures to detect, deter, manage and mitigate money laundering and the financing of terrorism
- A Compliance Officer appointed to administer and maintain your AML/CFT programme
- Customer Due Diligence processes including customer identification and verification of identity
- Suspicious Transaction Reporting, Auditing and Annual Reporting systems and processes.
Codes of practice and guidelines will be released to help you determine what your obligations are and how you can meet them.
How will it affect consumers?If you are a customer of financial institutions and casinos you may experience more stringent identity checks than you did prior to the AML/CFT Act coming into effect. However, by verifying your identity you will be helping protect New Zealand businesses from being misused for the purposes of criminal activity.
The types of documents you could be asked to provide to verify your identity may vary for different transactions or services. They may also vary across different service providers. You may also be asked for additional information about your identity or your transactions as part of a businesses ongoing monitoring of customer activity.
Note: All personal information collected under the AML/CFT Act will be handled in accordance with The Privacy Act 1993.
Ministerial ExemptionsThe AML/CFT Act provides for two types of exemptions – Regulatory exemptions and Ministerial exemptions. Regulatory exemptions will be set out in the AML/CFT regulations.
The Minister of Justice may grant a Ministerial exemption from any or all provisions of the Act. Exemptions may be granted for businesses, transactions, products, services or customers and may be subject to conditions.
The Ministry of Justice is now inviting applications for Ministerial Exemptions under the AML/CFT Act. For further information and a copy of the Ministerial Exemption Policy go to the Ministry of Justice Website.
Supervisory FrameworkThe AML/CFT Supervisory Framework sets out the AML/CFT framework and outlines the shared objectives, functions, powers and guiding principles of the three AML/CFT supervisors and the compliance tools and techniques available to them.
Approach to Compliance and EnforcementThe Department's approach to compliance and enforcement in this area is set out in the document:
QuestionsSee the Ministry of Justice website for answers to frequently asked questions (FAQs).
If you cannot find an answer to your question please email the Department's Financial Integrity team at email@example.com
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