The Government has decided to overhaul the system to make it more agile and responsive to industry and community needs and to take a more risk-based approach.
The main initiatives are:
Read the announcement by the Associate Minister of Justice, Hon Nicole McKee:
Government to overhaul anti-money laundering regime(external link)
On this page:
Money laundering is the process criminals use to ‘clean’ the money they make from illegal activities such as fraud, drugs, and tax evasion. They do this by buying, selling, and channelling funds through things such as property, luxury goods and financial services. Criminals launder money so it looks like it comes from a legitimate source, to cover their tracks and avoid being detected. They then spend the money or use it to fund criminal activities. People who finance terrorism use similar methods to channel funds to violent causes. For more information, see:
What is money laundering and terrorist financing?
The foundation of New Zealand’s system to tackle money laundering is the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009 and associated regulations.
Three government agencies are responsible for supervising and providing guidance to the various businesses and industries the AML/CFT Act apples to:
Other government agencies involved in the regime include:
Establishing a single AML/CFT supervisor will support industry and consumers by providing consistent and up-to-date guidance and support, reducing compliance costs, and realising opportunities (such as digital identity and open banking). The guidance will enable proportionate implementation and enforcement of AML/CFT obligations for all reporting entities, that are based on the risks inherent in their business rather than a one size fits all approach.
A multi-agency statutory review of the Act, conducted in partnership with industry, identified that the existing supervisor model:
The AML/CFT system requires the supervisors to work together to meet the objectives of the legislation and implement a system-wide approach to supervision. The review found that, as each supervisor is funded differently, resources are not effectively shared, and emerging issues are not always adequately prioritised.
Changes to the system structure and funding model must be progressed before substantial legislative changes implemented. Moving to a single supervisor structure provides necessary agility that will enable successful implementation of the regulatory reforms.
For example, moving to a single decision-making organisation will ensure the supervisory system can be more agile in providing guidance and support to businesses. This is particularly important, as many of the aspects of the AML/CFT work programme (such as improving Customer Due Diligence (CDD) requirements) require the updating of guidance and codes of practice. Making these changes now will mean the single supervisor will be established two years before New Zealand’s next mutual evaluation by the Financial Action Taskforce (FATF).
As well as these structural changes, the Government is progressing the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill improve New Zealand’s anti-money laundering and terrorism financing regime to make the system more risk-based, efficient, and effective.
The Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill(external link)
Read the announcements of the Associate Minister of Justice, Hon Nicole McKee:
More AML relief on the way for Kiwi businesses(external link)
Kiwi businesses to face reduced AML burden(external link)
Cabinet papers, minutes and Regulatory Impact Statements: Proposals for an AML/CFT legislative work programme [PDF, 7.5 MB]
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