The Department of Internal Affairs

Te Tari Taiwhenua | Department of Internal Affairs

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    Services › Anti-Money Laundering › AML/CFT News - July 2011

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    Welcome to the first edition of AML/CFT News. This is a quarterly newsletter of AML/CFT updates and issues for reporting entities, published by the Department of Internal Affairs and the Financial Markets Authority.

    In this issue:

    AML/CFT Regulations 2011 are here!

    On 30 June 2011 Regulations and a Commencement Order for the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 were gazetted, which bring the Act fully into force on 30 June 2013.

    Businesses now have two years to establish and implement their AML/CFT programme and comply fully with their obligations under the Act.

    The AML/CFT regime is a vital part of the global fight against organised crime, and will enhance our ability to detect and trace illegal money through the financial system. It aims to ensure that New Zealand is not a safe haven for criminals.

    There are four sets of AML/CFT Regulations:

    The Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011 commence on 28 July 2011 and will:
    • include certain financial advisers and trust and company service providers as reporting entities under the Act
    • exclude reporting entities that would otherwise be reporting entities under the Act, but only perform relevant services that are exempt from all provisions of the Act
    • exclude accommodation providers that provide guests with safety deposit boxes, lawyers, conveyancers, accountants, real estate agents, pawnbrokers, financial institutions that are in liquidation, and government departments
    • establish thresholds for occasional transactions, cash transactions in casinos, travellers cheques, money or postal orders, currency exchange and certain stored value instruments
    • prescribe a 25 % beneficial ownership threshold
    • extend eligibility for designated business groups to money transfer service agents and sub-agents, and certain bodies corporate overseas
    • establish the procedure for electing to be a member of a designated business group.
    The Anti-Money Laundering and Countering Financing of Terrorism (Exemptions) Regulations 2011 commence on 30 June 2013 and will:
    • exempt some transactions and services from the Act or parts of the Act.
    Reporting entities that are exempt from some parts of the Act must ensure they comply with the remaining obligations. For example, many reporting entities with exemptions under this Regulation still need to fulfil obligations regarding suspicious transaction reports.

    The Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Regulations 2011 come into force on 30 June 2013 and:
    • require standard customer due diligence to be carried out on anonymous accounts
    • require information to be collected about beneficiaries of trusts that are customers of reporting entities
    • expand the scope of entities to which simplified due diligence can be applied
    • prescribe the information that must be included in a reporting entity's annual reports to its AML/CFT supervisor.
    The Anti-Money Laundering and Countering Financing of Terrorism (Ministerial Exemption Form) Regulations 2011
    • prescribe the form in which the Minister must make Ministerial exemptions.
    More information on Ministerial exemptions can be found on the Ministry of Justice website.

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    2 year countdown has begun!

    Important AML/CFT documents

    The supervisors will be providing information to help reporting entities understand their obligations under the Act and implement their AML/CFT programme.

    Documents will be published regularly in the lead up to full commencement of the Act. These important documents are accessible on the Internal Affairs and Financial Markets Authority websites.

    Documents that have been published so far include:

    Sector Risk Assessment

    Each supervisor has published a Sector Risk Assessment. The Sector Risk Assessment is a review of the characteristics of certain sectors of the financial system. It assesses the risk of money laundering occurring in that sector and outlines any particular risks within that sector.

    Reporting entities should use this document to help determine the risks to their business. They should then incorporate any relevant risks in their own businesses risk assessment.

    Risk Assessment Guideline

    This guideline is designed to help reporting entities conduct their own risk assessment, as required under section 58 of the AML/CFT Act. A risk assessment is the first step a business must take before developing an AML/CFT programme.

    A risk assessment involves identifying and assessing the risks the business reasonably expects to face from money laundering and financing of terrorism. Once completed, a business must then put in place a programme that minimises or mitigates these risks. This guideline is not mandatory. Reporting entities may choose to carry out their risk assessment using alternative AML/CFT Act compliant methodologies.

    AML/CFT Supervisory Framework

    This document 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.

    AML/CFT roadshow coming soon

    In late August and early September this year, representatives from the Department of Internal of Affairs, the Financial Markets Authority and the Police Financial Intelligence Unit will be travelling around the country to meet reporting entities, present important information about the Act and discuss the obligations placed on reporting entities.

    The roadshow will provide a good opportunity for you to meet with your supervisor and ask any questions you might have.

    We will be sending out invitations that include details of locations, dates and times soon. Please forward us any additional email contacts who would like to receive the invite.

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    Contact us

    Internal Affairs is your supervisor if you are a casino, money service business, payroll remittance business, non-deposit taking lender, financial leasor, safe deposit/cash storage provider, non-bank credit card provider, trust and company service provider or any other financial institution not supervised by the Reserve Bank or Financial Markets Authority.

    Please email if you have any questions.

    The Financial Markets Authority is your supervisor if you are an issuer of securities, broker, financial adviser, trustee company, collective investment scheme or futures dealer.

    Please email if you have any questions.

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