Information for the public

What is money laundering and financing of terrorism?

Money 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.

Who does what?

The agencies who supervise the AML/CFT regime and the businesses (known as reporting entities under the Act) they monitor are:

The Reserve Bank of New Zealand supervises banks, life insurers, and non-bank deposit takers. (See also: Financial market infrastructure oversight)

The Financial Markets Authority supervises issuers of securities, licensed supervisors, fund managers, brokers and custodians, financial advisers, derivatives issuers, DIMS providers and peer to peer lending and equity crowd funding service providers.

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 Ministry of Justice is responsible for drafting and administering the AML/CFT Act and regulations. The Financial Markets Authority took over the AML/CFT functions of its predecessor, the Securities Commission of New Zealand, on 1 May 2011.

The New Zealand Police Financial Intelligence Unit collates and analyses information relating to suspicious transactional activity.

What do businesses need to do?

section 5 of the Act you need:

  • 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
  • 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 have been released to help you determine what your obligations are and how you can meet them.

Providing Proof of Identification

As a customer of a business that has to comply with the AML/CFT Act you may be asked to provide proof of identification.

To find out why you are being asked to provide proof of identification, see the below fact sheet.

Customer Due Diligence information sheet: proof of identification

This information sheet is available in three languages - English, Chinese and Samoan: