Tackling money laundering and terrorism financing

A programme of legislative reform is overhauling New Zealand’s system for tackling money laundering and terrorist financing. The reforms aim to provide regulatory relief for businesses, detect and deter criminals from our financial system, and protect our international reputation as a trusted place to do business.

The main initiatives are:

provide immediate regulatory relief to businesses
introduce structural changes to improve system efficiencies. This includes moving to a single supervisor, and developing a National Strategy and work programme, including a new funding model
make regulatory improvements to provide further regulatory relief to New Zealanders, and to uphold our international reputation as a safe country to invest and do business.

Read the announcement by the Associate Minister of Justice, Hon Nicole McKee:

Government to overhaul anti-money laundering regime(external link)

On this page:

What is money laundering and terrorism financing?

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 terrorism financing?

How does the AML/CFT system currently work?

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 currently responsible for supervising and providing guidance to businesses and industries who are required to comply with the AML/CFT Act:

Reserve Bank – supervising banks, life insurers and non-bank deposit takers. Anti-money laundering and countering terrorism financing(external link)
Financial Markets Authority – supervising derivatives issuers, brokers and custodians, equity crowd funding platforms, financial advisers, managed investment scheme managers, peer-to-peer lending providers, discretionary investment management services, licensed supervisors, and issuers of securities. AML/CFT(external link)
Department of Internal Affairs – supervising casinos, lawyers, conveyancers, accountants, real estate agents, sports and racing betting agencies, businesses that provide trust and company services, or trade in high value goods, and other financial service providers that are not covered by the Reserve Bank or Financial Markets Authority. AML-CFT Homepage(external link)

Other government agencies involved in the AML/CFT regime include:

The Ministry of Justice is responsible for policy development and administration of the law. It also handles all matters related to exemptions from the Act.
The New Zealand Police financial intelligence unit receives and analyses suspicious transaction reports. It issues guidance to reporting agencies and supervisors about compliance under the Act and provides information on money laundering and terrorism trends and methods. Financial Intelligence Unit (FIU)(external link)
The New Zealand Customs Service enforces the Act’s cross-border cash reporting scheme. Border Cash Reports review(external link)

Why is a single-supervisor model being implemented?

From July 2026, a single AML/CFT supervisor (the Department of Internal Affairs) will supervise reporting entities, with a new focus based on the risks of AML/CFT activities to businesses. Increased guidance, training and support will also be provided to reporting entities. This will reduce compliance costs and provide a system-wide view of risks.

Why are the supervisory model and levy changes being progressed now?

Changes to the system structure and funding model must be progressed before substantial legislative changes are implemented. Moving to a single supervisor provides necessary structure to enable successful implementation of the regulatory reforms.

Many aspects of the AML/CFT work programme (such as improving Customer Due Diligence (CDD) requirements) will require guidance and codes of practice to be updated.  

What legislative changes are being progressed?

The Government is amending the Anti-Money Laundering and Countering Financing of Terrorism Act (2009) to make the system more risk-based, efficient, and effective.