Putting the heat on money laundering
From 1 July, new laws are coming into force to help prevent criminals from laundering money and financing terrorism.
It’s estimated that over $1 billion a year comes from drug dealing and fraud, and can be laundered through New Zealand businesses.
The changes – which bring in "Phase 2" of New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act – put in place measures to protect businesses, detect crime and deter criminals from abusing New Zealand’s financial system.
What is money laundering?
Money laundering is the process criminals use to hide the money they make from crimes like dealing in illegal drugs, fraud and human trafficking.
They do this by exploiting legitimate businesses to buy, sell and channel their funds through things such as property, expensive goods and financial services. People who finance terrorism also use these methods to send money to violent causes and to disguise who’s providing and receiving the money.
Learn more about money laundering and terrorist financing in New Zealand. See also this educational video about money laundering(external link).
What’s changing?
New Zealand has had AML/CFT laws since 2013. They’ve applied to banks, casinos, financial advisers and some trust and company service providers.
Over the next 13 months, the laws will extend to include lawyers, conveyancers, trust services, accountants, real estate agents, sports betting and dealers in high value goods.
These businesses will need to have systems in place to ensure that they can identify their customers and detect suspicious financial activities if they occur.
How does this help prevent crime and money laundering?
Asking all customers basic questions deters criminals from trying to launder money through legitimate businesses. When laundering is detected, it makes it easier for authorities to find out where ‘dirty’ money came from, prosecute criminals, seize illegally earned money and assets, and stop crime.
When do the law changes take effect?
The law is coming into effect in stages for different sectors.
- Lawyers, conveyancers, and trust and company service providers from 1 July 2018
- Accountants and providers of accounting services from 1 October 2018
- Real estate agents from 1 January 2019
- Dealers in high value goods and the New Zealand Racing Board from 1 August 2019
If you’re unsure if the law changes will affect your business, check what services Phase 2 of the (AML/CFT) Act covers.
You can also find out how the AML/CFT Act may affect customers and the public.