The Anti-Money Laundering and Countering the Financing of Terrorism Act 2009 came into effect on 30 June 2013, replacing reporting obligations under the Financial Transactions Reporting Act for reporting entities, which are defined as financial institutions (including money remittance, financial leasing and funds management) and casinos.
The Act is widely recognized as a response to international expectation that New Zealand meet international best practice to combat financial crime and terrorist funding.
Reporting entities must establish, implement, maintain and regularly audit an AML/CFT risk assessment and programme.
They must have processes for conducting customer due diligence, including enhanced due diligence in respect of particular types of customers and transactions when establishing customer relationships, as well as having ongoing due diligence and account monitoring procedures. All reporting entities must appoint an AML Compliance Officer who must report to senior management.
Any transactions that are identified as suspicious must be reported to the NZ Police Financial Intelligence Unit using the prescribed goAML system. As of 1 November 2017, reporting entities must also submit Prescribed Transaction Reports in respect of international wire transfers and domestic physical cash transactions.
Expansion of Act’s Application
Following publicity from the Panama Papers around the use of trusts, the extension of the legislation to additional industry sectors including lawyers, accountants, real estate agents, and the vendors of luxury items was prioritised and these sectors are or should be in the process of establishing and implementing compliance programmes with it being anticipated they will all need to be compliant within the next two years.