Shared learnings from High Value Dealers getting on board with AML/CFT Act

27 September 2019

High value dealers who buy or sell goods using cash transactions at or over $10,000 have been covered by the Anti-Money Laundering and Countering Financing of Terrorism Act since 1 August.

We spoke to two high value dealers in the motor vehicle sector about what they did to be regulation ready.

Working together to stop criminals

Every year about $1.35 billion is laundered through New Zealand businesses to disguise the illegal origins of money from crimes such as drug dealing, fraud, tax evasion or theft. Criminals often target high value dealers to turn illicitly earned cash into assets.

HVD sector peak bodies have been supportive with informing their members about AML/CFT obligations.

"We are a large corporate business and we have the same standard of AML requirements across all our branches. Protecting our reputation and the reputation of NZ business is paramount as is upholding the laws of NZ. We are bound by legal obligations to seek specific information from our customers in certain circumstances. We are playing our part by investing a lot of time and effort in making sure that our business remains compliant at all times," said Lisa Collins, Compliance Manager at Turners Automotive Group.

Joe Walklin, Financial Controller at Rutherford & Bond Toyota in the Wellington region shared "We want to be a good corporate citizen and fully compliant with NZ law and AML/CFT rules. We want to assist in combating money laundering by following the new requirements."

Preparing for compliance

"First, we assessed what we were already doing prior to 1 August in terms of accepting cash transactions, customer due diligence (CDD) and then we looked at what would need to change to comply with the Act. The High Value Dealers Guideline helped me gain an understanding of what the rules were about," said Joe.

"And we registered for the goAML portal to ensure we were set up to submit prescribed transaction reports (PTR). There was a bit of confusion in the beginning as I read cash to include cheques and was reporting cheques to goAML but was informed that cheques didn’t require a PTR."

Only physical cash transactions (NZD and foreign currency) at or above $10,000 require a PTR to be submitted using the goAML portal.

 Updating existing business practices

"As NZ’s largest buyer and seller of second-hand vehicles we have 33 branches and have had to invest in training and resources to educate our teams on the correct process and procedures to follow. We engaged our staff 12 months beforehand about AML/CFT in general with a high-level overview of what to expect. Once the HVD guideline was published we ran training sessions about how we would communicate with customers, what was required and what system changes would be needed," said Lisa Collins, Compliance Manager at Turners Automotive Group.

Learnings to share with other high value dealers

"Understanding the AML/CFT obligations and reading the guidance is important. You need to make sure you have a process for anyone that’s handling funds and make sure all your staff understand the obligations," said Joe. The CDD information sheet and guidance for high value dealers is available on the DIA website.