New Zealand has progressively implemented a system to tackle money laundering and the financing of terrorism (AML/CFT). On this page you can find information about New Zealand’s work to address the risks of AML/CFT.
In 1991, New Zealand became an active member of the Financial Action Task Force(external link) (FATF). Hosted by the OECD in Paris, FATF has established a set of internationally accepted standards for anti-money laundering and, following the September 2001 terrorist attacks on the United States, standards for countering the financing of terrorism, together known as the FATF Recommendations. More than 200 countries and jurisdictions have committed to implement the FATF’s Standards as part of a co-ordinated global response to preventing organised crime, corruption, and terrorism. Jurisdictions that repeatedly fail to implement FATF Recommendations can be named as a Jurisdiction under Increased Monitoring or a High-Risk Jurisdiction, known as the “grey and blacklists.”
With FATF’s 1997 and 2003 evaluations highlighting shortfalls in New Zealand’s AML/CFT regime the Government began to progressively reform its legal and operational response. Regulatory change involved the establishment of three supervisors and the inclusion in Phase 1 of banks, life insurers, casinos and other high-risk institutions with other businesses and professions to be brought within the AML/CFT regime in Phase 2.
In 2009, Parliament passed the Anti-Money Laundering and Countering Financing of Terrorism Act. The following policy and Cabinet papers were published in 2008 and 2009 and provide background to the first phase of the reform work. Please note these documents have been sourced from the Ministry’s archived website and have not been reassessed against the Official Information Act 1982 (OIA):
To implement the AML/CFT Act, regulations were developed which were subject to extensive public consultation, with Cabinet decisions in 2010 and 2011. The following documents were published at the time and provide background information on the implementation of Phase 1. Please note these documents have been sourced from the Ministry’s archived website and have not been reassessed against the OIA:
Phase 1 of the reforms came into effect in 2013 and applied to banks, casinos, and a range of financial service providers. Three government agencies were responsible for supervising the various businesses and industries the Act applies to:
With the completion of Phase 1, work began on Phase 2. This phase brought into the AML/CFT regime lawyers, conveyancers, accountants, real estate agency, sports and racing better, and businesses that provide trust and company services, or trade in high-value goods. These additional businesses are supervised by the Department of Internal Affairs.
To implement Phase 2, the Anti-Money Laundering and Countering Financing of Terrorism Amendment Act was passed by Parliament in August 2017. The following documents were published in 2016 and 2017 as a part of the public consultation and implementation process.
Development of the Phase 2 laws involved two rounds of public consultation and the publication of reports on the costs and benefits of this phase.
Cabinet considered four Cabinet papers in the development of the Phase 2 laws:
Regulations related to high value dealers were considered in 2018 and 2019:
With an impending review by FAFT and the Asia-Pacific Group on Money Laundering (APG), the New Zealand Government considered its strategic approach to AML/CFT, as well as considering further regulatory proposals:
FAFT and APG’s 2021 evaluation highlighted New Zealand’s success in targeting criminal finances. Among the report’s findings were that New Zealand has a robust understanding of its money laundering and terrorist financing risks and that our law enforcement agencies regularly use financial intelligence from the AML/CFT system. The reports also noted that the New Zealand Police have a strong focus and have developed world-leading expertise in targeting and confiscating of proceeds of crime and the sound cooperation and coordination between the Police’s National Security Group, Financial Crime Group, and other relevant agencies. New Zealand was also found to be a highly effective international partner contributing to foreign investigations and tenaciously pursuing money laundering globally.
However, the reports highlighted some technical shortcomings in legislation, and these were considered in the statutory review of the AML/CFT Act by the Ministry of Justice in 2021 and 2022. This review was tabled in Parliament in November 2022 and resulted in further changes to AML/CFT regulations and the legislative work now underway. More information can be found here:
Changes to AML/CFT Act regulations
Key documents related to these and other changes in 2022 and 2023 are publicly available:
As a result of this work, FAFT upgraded New Zealand’s compliance levels regarding several recommendations.
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