AML/CFT supervision and support for businesses

More businesses will soon have to put systems and processes in place to help tackle money laundering and terrorist financing. Support will be available to help them understand and do what’s required.

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Under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act, three government agencies act as supervisors to support and oversee the business sectors that have to comply with the law.

To find out if you’ll have to comply with the Act, see the information specific to your sector at:

Tacking money laundering and terrorist financing

Which agency will supervise my business when Phase 2 of the Act comes into effect?

It’s proposed that the Department of Internal Affairs will supervise Phase 2 businesses.

The three existing AML/CFT supervisors – the DIA (external link) , the Reserve Bank of New Zealand (external link) and the Financial Markets Authority (external link) – will continue to oversee Phase 1 businesses.

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Why is supervision required?

Supervisors play a critical role in combating money laundering and terrorist financing by:

  • helping businesses comply with the Act and regulations
  • monitoring and assessing money laundering and terrorist financing risks in their sectors and helping businesses understand these risks
  • investigating potential breaches and enforcing the law when necessary
  • ensuring rules work well and that there’s a level playing field for regulated businesses

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What will my supervisor do?

Some of the things your supervisor will do are:

  • assess the risks in your sector to help you understand how criminals could use your services to launder money or finance terrorism
  • provide support, guidance and feedback to help you comply with AML/CFT laws
  • review your policies and procedures, and inspect your records (this does not apply to high value dealers)
  • investigate and take action if you don’t meet your obligations.

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How will I have to work with the supervisor?

Your supervisor may ask for information and access to your AML/CFT documents and customer and transaction records to make sure you’re complying with the Act.

By law, you must give your supervisor information or access to information when they ask for it.

How often you’ll need to do this will depend on various factors. Supervisors take a risk-based approach. This means they focus more on supervising businesses that provide products and services which are more at risk of being misused by criminals.

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What happens if I don’t meet my AML/CFT obligations?

If your supervisor has any concerns about your systems and processes or you don’t comply with the law, you’ll have to fix issues that need attention.

You might be given a warning, which may be made public in some circumstances.

There are penalties if you seriously breach the law. These include fines of up to $5 million for businesses, while individuals can be fined up to $300,000 or sentenced to up to 2 years in prison.

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