Anti-Money Laundering and Countering Financing of Terrorism Bill

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Anti-Money Laundering and Countering Financing of Terrorism Bill

Government Bill

46—1

Explanatory note

General policy statement

The purpose of this Bill is to enhance New Zealand’s anti-money laundering and countering the financing of terrorism (AML/CFT) framework, and in doing so, progress compliance with the Financial Action Task Force’s (FATF) AML/CFT Recommendations and assure the robustness of New Zealand’s financial system.

The FATF Recommendations, which have widespread support as being the international standard for AML/CFT, provide the reference point for the changes proposed by the Bill. The FATF was created in 1989 by the then G-7 group of countries in response to the threat that money laundering posed to the international financial system. New Zealand has been an active member of the FATF since 1991. Member countries are routinely assessed via a Mutual Evaluation process for compliance with the FATF Recommendations. New Zealand’s third Mutual Evaluation is currently underway. New Zealand’s compliance with the FATF Recommendations will be publicly reported on in October 2009.

The overarching objectives of the Bill are to—

  • improve the detection and deterrence of money laundering and the financing of terrorism:

  • enhance New Zealand’s international reputation:

  • contribute to public confidence in the financial system:

  • realise these objectives with minimum cost through providing that the AML/CFT framework is appropriate to New Zealand’s broader financial system, is compatible with international AML/CFT frameworks (particularly that of Australia), and incorporates a risk based approach that provides businesses scope for assessing and responding to the risks of their particular operating environment.

The Bill requires that businesses covered by the AML/CFT reforms, which in this first phase include casinos and businesses providing financial services (reporting entities), assess the AML/CFT risks that they may face in their business, establish and implement measures to appropriately manage those risks, and report any suspicious financial transaction activity that they identify to law enforcement. To do so effectively, the Bill requires reporting entities to—

  • establish, implement, maintain, and regularly audit an AML/CFT programme and undertake more rigorous customer due diligence measures (improving upon those set out in the Financial Transactions Reporting Act 1996):

  • implement enhanced due diligence measures relating to customers, business relationships, and transactions presenting higher AML/CFT risks. A notable measure in the Bill, in this respect, is the inclusion of enhanced measures relating to people responsible for prominent public functions, the intention being to enhance anti-corruption measures relating to such prominent public roles:

  • undertake ongoing account and transaction monitoring:

  • maintain records of account transaction activity for 5 years:

  • more systematically report suspicious transactions to the Financial Intelligence Unit (again, improving upon the requirements set out in the Financial Transactions Reporting Act 1996).

To support the overall functioning of the AML/CFT system, the Bill creates a AML/CFT supervisory regime to monitor, assist, and enforce reporting entities’ compliance with their AML/CFT obligations, and maintain systems to identify and manage national level AML/CFT risks. A supervisory regime involves multiple existing government agencies, as this approach minimises establishment costs and builds on existing capabilities so that ongoing delivery is cost effective. Supervisory agencies include the following:

  • the Securities Commission for issuers of securities, trustee companies, futures dealers, collective investment schemes, brokers, and financial advisers:

  • the Reserve Bank of New Zealand (RBNZ) for banks, life insurers, and non-bank deposit takers:

  • the Department of Internal Affairs for casinos, non-deposit taking lenders, and money changers, and other financial institutions not supervised by the Securities Commission or RBNZ.

The Bill provides supervising agencies with additional powers to undertake their new role, and establishes governance and accountability, and information sharing arrangements to help ensure consistency and effectiveness of implementation across the AML/CFT regime. Key provisions include—

  • powers to monitor, inspect, and sanction reporting entities so that supervisors can properly enforce reporting entities’ compliance with AML/CFT obligations. The effectiveness of the AML/CFT reforms is dependent on the willingness and ability of reporting entities to comply with the regime. The powers are designed to be facilitative in the first instance, but include a range of civil and criminal offence and penalty provisions to reinforce compliance:

  • conditions on the use of AML/CFT information, including provision for supervisors and the Police and Financial Intelligence Unit (FIU) to request and share AML/CFT compliance information and money laundering and terrorism financing-related information with each other in both domestic and international contexts. This would be subject to a proper interest protection:

  • the creation of an AFL/CFT co-ordination committee, comprising agencies involved in the operation of the AML/CFT regime, tasked with ensuring the regime is implemented efficiently and effectively:

  • measures to exempt certain financial products justified as being of low risk, and certain businesses inadvertently caught by the Bill.

The Bill also extends the cross-border cash reporting regime administered by the New Zealand Customs Service.

Clause by clause analysis

Clause 1 is the Title clause.

Clause 2 is the commencement clause. It provides for the Bill, and for different provisions of the Bill, to be brought into force by Orders in Council.

Part 1
Preliminary provisions

Clause 3 states the purpose of the Bill.

Clause 4 relates to interpretation and defines certain terms used in the Bill.

Clause 5 effectively provides that cash denominated in a currency other than a New Zealand currency is taken to be the equivalent in New Zealand currency.

Clause 6 provides that the Act binds the Crown.

Part 2
AML/CFT requirements and compliance

Clause 7 provides that the Bill has effect despite anything to the contrary in any contract or agreement.

Subpart 1Customer due diligence

Subpart 1 of Part 2 (clauses 8 to 36) sets out the process by which a reporting entity satisfies itself that its customers are who they purport to be and that their financial transactions are legitimate. This process is known as customer due diligence and there are different forms of customer due diligence depending on the type of customer, the nature or circumstances of the transaction, and the level of risk involved.

Clause 8 defines the various forms of customer due diligence with reference to the sections that set out the requirements for each type. The types of customer due diligence are enhanced, simplified, and standard.

Clause 9 provides that customer due diligence must be conducted not only on the customer but on any beneficial owner of a customer or any person acting on behalf of a customer. The clause also indicates when the different types of customer due diligence must be conducted.

Clause 10 requires a reporting entity to rely on its risk assessment (undertaken in accordance with clauses 54(c) and (f) and 55) in order to establish the level of risk involved when conducting customer due diligence

Clause 11 describes the basis on which customer identity is to be verified.

Standard customer due diligence

Clause 12 sets out the circumstances in which a reporting entity must conduct standard customer due diligence.

Clause 13 sets out the information a reporting entity must obtain in order to identify a customer when conducting standard customer due diligence.

Clause 14 sets out the process for verifying the identity of a customer when conducting standard customer due diligence.

Clause 15 sets out some additional information a reporting entity must obtain when conducting standard customer due diligence.

Simplified customer due diligence

Clause 16 sets out the circumstances in which a reporting entity may conduct simplified customer due diligence. This type of due diligence may be conducted in place of standard customer due diligence if the customer is a company listed on an exchange registered under Part 2B of the Securities Markets Act 1988, a government department, a local government organisation, the New Zealand Police, the New Zealand Security Intelligence Service, or an entity specified in regulations.

Clause 17 sets out the information a reporting entity must obtain in order to identify a customer when conducting simplified customer due diligence.

Clause 18 sets out the process for verifying the identity of a customer when conducting simplified customer due diligence.

Clause 19 sets out some additional information a reporting entity must obtain when conducting simplified customer due diligence.

Enhanced customer due diligence

Clause 20 sets out the circumstances in which a reporting entity must conduct enhanced customer due diligence. The types of circumstances listed are those that involve customers or situations that, by their nature, are considered to have a high risk of money laundering or the financing of terrorism. This includes customers who are trusts, are not resident in New Zealand and come from countries that have insufficient anti-money laundering or counter-terrorism financing systems or measures in place, companies with nominee shareholders or shares in bearer form, or politically exposed persons. Transactions regarded as high risk are wire transfers, or transactions that are complex and unusually large or that show an unusual pattern that appears to have no economic or lawful purpose. Other situations in which enhanced customer due diligence must be conducted are those involving a correspondent banking relationship, those that the reporting entity considers should be subject to enhanced customer due diligence because of the level of risk involved, or those that involve new or developing technologies and products that may favour anonymity. Regulations may also be made to cover other circumstances that must be subject to enhanced customer due diligence.

Clause 21 sets out the information a reporting entity must obtain in order to identify a customer when conducting enhanced customer due diligence.

Clause 22 sets out the process for verifying the identity of a customer when conducting enhanced customer due diligence.

Clauses 23 to 27 set out additional requirements for enhanced customer due diligence in situations involving politically exposed persons, wire transfers, correspondent banking relationships, and new or developing technologies and products.

Ongoing customer due diligence and account monitoring

Clause 28 requires reporting entities to continue to conduct due diligence and to monitor accounts. It sets out the minimum requirements for ongoing customer due diligence. This includes a review of customer account activity and transaction behaviour and customer information held by a reporting entity.

Reliance on third parties

Clause 29 allows one member of a designated business group to rely on another member of that group to perform certain aspects of the AML/CFT requirements. In particular, one member of the group may rely on another member to conduct customer due diligence procedures if certain conditions are met. In addition, it may adopt part of another member of the group's AML/CFT programme relating to record keeping, account monitoring, ongoing customer due diligence, and annual reporting of the group (subject to any conditions) or, if relevant to the member's business, use another member's risk assessment. One member of the group may also make a suspicious transaction report on behalf of another member or all members of the group. The clause is subject to clause 33, which relates to the protection of personal information.

Clause 30 allows a reporting entity to rely on a third party in another country to conduct customer due diligence procedures subject to certain conditions. In particular, the third party being relied on must either be a reporting entity or be resident in a country with sufficient anti-money laundering and countering the financing of terrorism systems and measures in place and be supervised or regulated for AML/CFT purposes. The reporting entity, however, remains responsible for ensuring that customer due diligence is conducted in accordance with the Bill.

Clause 31 allows a reporting entity to authorise a person to be its agent and to rely on that agent to conduct customer due diligence on its behalf and to obtain information for that purpose.

Clause 32 provides that the information obtained from a third party conducting customer due diligence procedures for a reporting entity may only be used by that entity for the purposes of complying with the Bill and the regulations.

Clause 33 provides for the protection of personal information supplied by one member of a designated business group to another member of that group. The protection is limited to personal information provided for the purposes of establishing identity or verification of identity when conducting customer due diligence on behalf of another member of the group or for the purposes of adopting part of one member's AML/CFT programme. The information must be subject to privacy protections at least equivalent to those set out in privacy principles 5 to 11 in section 6 of the Privacy Act 1993. The reporting entity providing the information, however, remains responsible for the use or disclosure of that information.

Prohibitions

Clauses 34 to 36 contain prohibitions on establishing or continuing a business relationship in certain circumstances or in relation to certain transactions.

Subpart 2Suspicious transaction reports

Subpart 2 of Part 2 (clauses 37 to 45) deals with the reporting of suspicious transactions by reporting entities to the Commissioner of Police and restricts the disclosure of information relating to a suspicious transaction report.

Subpart 3Record keeping

Subpart 3 of Part 2 (clauses 46 to 52) sets out the requirements for a reporting entity to keep records relating to transactions and business relationships.

Subpart 4Compliance with AML/CFT requirements

Subpart 4 of Part 2 (clauses 53 to 58) deals with internal procedures, policies, and controls that a reporting entity must have in order to prevent activities related to money laundering and the financing of terrorism. In particular, a reporting entity must have an AML/CFT compliance programme and an AML/CFT compliance officer, and staff must receive appropriate AML/CFT training. Before conducting customer due diligence or establishing an AML/CFT programme, a reporting entity must undertake an assessment of the risk of money laundering and financing of terrorism (a risk assessment). This risk assessment is used to determine the level of risk when conducting different types of customer due diligence. A reporting entity must review both its risk assessment and AML/CFT programme and ensure that they are audited every 2 years or at any time if a request for an audit is made by the reporting entity's AML/CFT supervisor. A reporting entity is also required to provide an annual report on its risk assessment and AML/CFT programme to its AML/CFT supervisor. The report must take into account the results and implications of any review or audit. Reporting entities must ensure that their branches and subsidiaries comply with AML/CFT requirements.

Subpart 5Codes of practice

Subpart 5 of Part 2 (clauses 59 to 64) provides for the preparation, approval, and publication of codes of practice.

Clause 59 provides definitions of codes of practice and proposed codes of practice.

Clause 60 provides that AML/CFT supervisors must prepare codes of practice for their sectors if directed to do so by their Minister. The purpose of the code is to provide a statement of practice to assist reporting entities to comply with their obligations under the Bill and the regulations.

Clause 61 sets out the procedure for approval and publication of codes of practice. Before recommending a code of practice to the Minister for approval, the AML/CFT supervisor must consult with persons and organisations that the Minister thinks have an interest in the subject matter of the code. The Minister may direct the AML/CFT supervisor to reconsider any aspect of the code of practice and make amendments. In the event that the AML/CFT supervisor does not amend the code of practice as directed by the Minister, the Minister may make those amendments as well as any other amendments that the Minister, after consultation with the AML/CFT supervisor, considers necessary.

Clause 62 provides for the amendment and revocation of codes of practice.

Clause 63 provides that publication in the Gazette of a notice of a code of practice is conclusive evidence that the procedural requirements for approval and publication of the code have been complied with.

Clause 64 provides for the legal effect of codes of practice.

Subpart 6Cross-border transportation of cash

Subpart 6 of Part 2 (clauses 65 to 68) deals with cross-border transportation of cash. This subpart requires a person who brings cash (which includes physical currency and bearer-negotiable instruments) into, or takes cash out of, New Zealand (whether accompanied or unaccompanied) to make a cash report to the New Zealand Customs Service if the cash amount is over the applicable threshold value. The applicable threshold value will be prescribed in regulations made under the Bill. A person in New Zealand who receives cash over the applicable threshold value from overseas will also be required to make a cash report. The Customs officer who receives a report must forward that report to the Commissioner of Police. The chief executive of the New Zealand Customs Service is required to keep records of cash reports. The report must include details of the identity of the person making the report and the date on which it is made. These records are to be retained for at least 1 year.

Part 3
Enforcement

Part 3 sets out the enforcement regime (which consists of civil and criminal enforcement) relating to non-compliance with the AML/CFT requirements set out in Part 2.

Subpart 1General provisions relating to Part

Proceedings for civil penalties

Clause 69 provides that applications for a civil penalty under this Part must be made within 6 years after the conduct giving rise to the liability occurred, and provides for the standard of proof and procedural matters in civil penalty proceedings.

Relationship between civil penalty and criminal proceedings

Clause 70 allows criminal proceedings for an offence under this Part to commence against a person even if proceedings for a civil penalty have commenced against that person for the same conduct. However, proceedings under this Part for a civil penalty against a person are stayed if criminal proceedings against the person for the same conduct have been commenced.

Clause 71 provides that a person may not be penalised more than once for the same conduct.

Clause 72 provides that evidence given in civil penalty proceedings is not generally admissible in subsequent criminal proceedings relating to the same conduct.

Liability of senior managers

Clause 73 provides that a senior manager of a body corporate commits an offence if—

  • the body corporate commits an offence under this Part; and

  • the manager knew that the offence was being or would be committed; and

  • the manager was in a position to influence the conduct of the body corporate in relation to the commission of the offence; and

  • the manager failed to take all reasonable steps to prevent the commission of the offence.

Clause 74 provides for the civil liability of a senior manager of a body corporate along the same lines set out in clause 73.

Clause 75 prescribes criteria for establishing whether a senior manager failed to take all reasonable steps to prevent the commission of an offence or a civil liability act.

Subpart 2Civil liability

Clause 76 defines a civil liability act, which is effectively when a reporting entity fails to comply with any of its AML/CFT requirements under Part 2.

Clauses 77 to 88 set out what an AML/CFT supervisor may do in response to an alleged civil liability act. AN AML/CFT supervisor may do 1 or more of the following:

  • issue a formal warning under clause 78:

  • accept an enforceable undertaking under clause 79 and seek an order in the court for breach of that undertaking under clause 80:

  • seek an injunction from the High Court under clause 83 or 85:

  • apply to the court for a pecuniary penalty under clause 88.

The maximum pecuniary penalty for the following civil liability acts is $100,000 in the case of an individual and $1 million in the case of a body corporate:

  • failing to adequately monitor accounts and transactions:

  • entering into, or continuing, a business relationship with a person who does not produce or provide satisfactory evidence of that person's identity:

  • entering into, or continuing, a correspondent banking relationship with a shell bank:

  • failing to ensure that the reporting entity's branches and subsidiaries comply with the relevant AML/CFT requirements.

The maximum pecuniary penalty for the following civil liability acts is $200,000 in the case of an individual and $2 million in the case of a body corporate:

  • failing to conduct customer due diligence as required by subpart 1 of Part 2:

  • failing to keep records in accordance with the requirements of subpart 3 of Part 2:

  • failing to establish, implement, or maintain an AML/CFT programme.

Subpart 3Offences

Subpart 3 of Part 3 (clauses 89 to 112) deals with offences, which relate mainly to non-compliance with the AML requirements that are set out in Part 2.

A person who commits an offence relating to a civil liability act or relating to suspicious transactions reports (except unlawful disclosure of information relating to a suspicious transaction report) is liable, on conviction, to,—

  • in the case of an individual, either or both of the following:

    • a term of imprisonment of not more than 2 years:

    • a fine of up to $300,000; and

  • in the case of a body corporate, a fine of up to $5 million.

The time limit for bringing a prosecution in relation to these offences is within 6 months of the date on which the prosecutor is satisfied that there is sufficient evidence to warrant commencement of proceedings. However, proceedings may not be commenced if more than 3 years have passed since the offence was committed.

A person who unlawfully discloses information relating to a suspicious transaction report is liable, on summary conviction, to,—

  • in the case of an individual, a fine of up to $10,000; and

  • in the case of a body corporate, a fine of up to $100,000.

A person who commits an offence relating to the structuring of transactions to avoid application of AML/CFT requirements (other than a transaction involving cross-border transportation of cash) is liable, on conviction, to,—

  • in the case of an individual, either or both of the following:

    • a term of imprisonment of not more than 2 years:

    • a fine of up to $300,000; and

  • in the case of a body corporate, a fine of up to $5 million.

A person who commits an offence of obstructing an AML/CFT supervisor or providing false or misleading information to an AML/CFT supervisor is liable, on conviction, to,—

  • in the case of an individual, either or both of the following:

    • a term of imprisonment of not more than 3 months:

    • a fine of up to $10,000; and

  • in the case of a body corporate, a fine of up to $50,000.

The time limit for bringing a prosecution in relation to these offences is the same as that provided for offences relating to a civil liability act or suspicious transactions reports (except unlawful disclosure of information relating to a suspicious transaction report).

A person who commits an offence relating to cross-border transportation of cash is liable, on summary conviction, to—

  • in the case of an individual, either or both of the following:

    • a term of imprisonment of not more than 3 months:

    • a fine of up to $10,000; and

  • in the case of a body corporate, a fine of up to $50,000.

Clause 111 allows the chief executive of the New Zealand Customs Service to deal summarily with certain reporting offences relating to failure to report cash over the applicable threshold value. The chief executive may also, at any time before an information has been laid in respect of an offence, accept from the person who failed to report a sum, not exceeding $500, in full satisfaction of any fine the person would otherwise be liable to pay.

Clause 112 provides that nothing in the Bill limits or affects the Customs and Excise Act 1996. It also imposes a duty on Customs officers to prevent the movement of cash in breach of any requirements of the Bill or regulations and enables them to exercise powers under certain sections of the Customs and Excise Act 1996 in order to discharge that duty.

Subpart 4Search and seizure

Subpart 4 of Part 3 (clauses 113 to 126) sets out the provisions for search and seizure. Searches may only be conducted with a warrant.

Part 4
Institutional arrangements and miscellaneous provisions

Subpart 1Institutional arrangements

AML/CFT supervisors

Clause 127 provides that there will be 3 AML/CFT supervisors as follows:

  • the Reserve Bank will be the AML/CFT supervisor for banks, life insurers, and non-bank deposit takers:

  • the Securities Commission will be the AML/CFT supervisor for issuers of securities, trustee companies, futures dealers, collective investment schemes, brokers, and financial advisers:

  • the Department of Internal Affairs will be the AML/CFT supervisor for casinos, non-deposit-taking lenders, money changers, and other reporting entities that are not covered by the other 2 AML/CFT supervisors.

If a reporting entity provides products or services that are covered by more than 1 AML/CFT supervisor, then the supervisors may agree between them who will be the reporting entity's AML/CFT supervisor. In the absence of agreement, the AML/CFT co-ordination committee will appoint the AML/CFT supervisor.

Clause 128 sets out the functions of an AML/CFT supervisor.

Clause 129 sets out the powers of an AML/CFT supervisor.

Clause 130 relates to the conduct of on-site inspections of reporting entities by their AML/CFT supervisors. An AML/CFT supervisor may require a reporting entity to answer questions relating to its records and documents and to provide further information in the course of an on-site inspection.

Use and disclosure of information

Clause 131 allows an AML/CFT supervisor to use information (other than personal information) that it has obtained in another capacity for the purpose of exercising its powers or performing its functions and duties as an AML/CFT supervisor and vice versa.

Clause 132 places a restriction on the AML/CFT supervisors' powers to use information obtained under clause 131. They may only use that information if the person providing the information was advised of the purpose for which it was obtained at the time he or she provided it.

Clause 133 provides for the disclosure of information (other than personal information) by the Commissioner of Police, the New Zealand Customs Service, and AML/CFT supervisors to government agencies for law enforcement purposes.

Clause 134 provides for the use and disclosure of information by a government agency or an AML/CFT supervisor to another government agency or AML/CFT supervisor.

Clause 135 enables an AML/CFT supervisor to appoint enforcement officers.

Financial intelligence functions of Commissioner

Clause 136 sets out the financial intelligence functions of the Commissioner of Police.

Clause 137 sets out the financial intelligence powers of the Commissioner of Police.

Clause 138 provides for the Commissioner of Police's delegation powers.

Clauses 139 to 142 sets out the process for issuing suspicious transactions guidelines.

Co-ordination

Clause 143 sets out the co-ordination role of the Ministry responsible for the administration of the Bill (the Ministry) in relation to the AML/CFT regulatory system.

Clause 144 requires the chief executive of the Ministry to establish an AML/CFT co-ordination committee. The committee must consist of—

  • a representative from the Ministry; and

  • a representative from the New Zealand Customs Service; and

  • every AML/CFT supervisor; and

  • a representative of the Commissioner of Police; and

  • such other persons (who must be from a government agency) who may be invited by the chief executive to attend from time to time.

Clause 145 provides that the role of the AML/CFT co-ordination committee is to ensure that the necessary connections are made between the various supervisors and agencies so that the AML/CFT regulatory system operates consistently, effectively, and efficiently.

Clause 146 sets out the functions of the AML/CFT co-ordination committee.

Subpart 2Miscellaneous provisions

Regulations

Clauses 147 to 150 relate to the regulation-making power.

Ministerial exemptions

Clause 151 allows the Minister to exempt reporting entities or transactions, or classes of reporting entities or transactions, from all or any provisions of the Bill. The exemption may be unconditional or subject to conditions. The Minister must have regard to certain matters before granting the exemption.

Clause 152 requires the Minister to consult with the relevant AML/CFT supervisor and other interested persons before granting an exemption.

Clause 153 provides that every exemption must include a reason for the granting of the exemption and be notified in the Gazette

Transitional and savings provisions

Clause 154 and Schedule 1 deal with transitional and savings provisions.

Consequential amendments, repeals, and revocations

Clause 155 and Schedule 2 deal with amendments, repeals, and revocations to other enactments.

Regulatory impact statement

The Financial Action Task Force (FATF), of which New Zealand is a member, has developed Recommendations to guide member countries in implementing anti-money laundering and counter-terrorist financing (AML/CFT) measures.

Member countries’ compliance with these Recommendations is routinely evaluated. New Zealand’s compliance with the Recommendations will be evaluated by the FATF in 2009. There are significant deficiencies in New Zealand’s AML/CFT regime in respect of the standard established by the FATF Recommendations. The main gaps in New Zealand’s AML/CFT regime are as follows:

  • financial and non-financial businesses are not required to implement AML/CFT systems, involving, for example, customer due diligence and record keeping procedures, to the standard established according to the FATF Recommendations:

  • not all businesses included in the scope of FATF Recommendations fall within New Zealand’s regime:

  • there is no mandatory supervision and monitoring of reporting entities (businesses determined as having AML/CFT responsibilities) to ensure that they are carrying out their AML/CFT obligations.

The status quo is not preferred as it would see New Zealand continue to have a deficient AML/CFT regime in respect of the internationally accepted standard. [Information deleted in order to maintain the effective conduct of public affairs through the free and frank expression of opinions between officials and Ministers.]

The expected costs of the proposed AML/CFT reform include—

  • costs to reporting entities and their customers of new and extended regulatory requirements related to customer due diligence, transaction monitoring, transaction reporting, record keeping, and implementation of AML/CFT compliance programmes:

  • costs to the Crown of monitoring and supervising reporting entities, assessing money laundering risks at national and sector levels, analysing an increased volume and variety of suspicious transaction reports, and ensuring adequate co-ordination of regulatory functions across multiple supervisors.

Over time, the expected benefits of the proposed AML/CFT reform include—

  • supporting and protecting New Zealand’s international trade, borrowing, investment, and business objectives:

  • strengthening the ability of law enforcement agencies to detect, investigate, prosecute, and recover the proceeds of serious crime:

  • deterring predicate offending by ensuring that any proceeds of crime are more difficult to launder, therefore reducing the crime incentive:

  • supporting counter-terrorism efforts in New Zealand and the Asia Pacific region.

Officials have consulted on options for compliance with the FATF Recommendations that seek to avoid excessive compliance burdens, are effective in their resolve, and are appropriate to New Zealand circumstances.

Adequacy statement

The Regulatory Impact Analysis Team has reviewed this regulatory impact statement (RIS) and considers that it contains the required information and accurately reflects the regulatory impact analysis undertaken in relation to the proposal, which we also consider to be adequate according to the criteria set out in the CabGuide. As a result, we consider that this RIS is adequate.

Status quo and problem

Money laundering and the financing of terrorism are global problems.

The FATF, associated with the OECD, was established by the G-7 countries in 1989 to develop and promote policies and legislation to combat money laundering and terrorist financing. In April 1990, the FATF issued Forty Recommendations to guide governments in their implementation of laws and regulations to combat money laundering. In response to the attacks in the United States on 11 September 2001, the FATF issued an additional 8 special Recommendations to guide governments in their implementation of laws and regulations to combat terrorist financing (with a ninth added in 2004).

New Zealand is a member of the FATF and, while they are not legally binding, there is a strong impetus for compliance with the Recommendations. There is widespread acceptance of the Recommendations as a robust standard of AML/CFT measures, with FATF membership extending well beyond the OECD membership (32 jurisdictions and 2 regional organisations including the European Commission and the Gulf Cooperation Council).

New Zealand voted in favour of the revised Recommendations in 2004, and the United Nations (UN) Security Council has strongly urged UN member states to comply with FATF standards (Security Council Resolution No 1617, 29 July 2005). Implementing the FATF recommendations would also enable New Zealand to demonstrate its compliance with the UN Convention Against Trans-national Organized Crime (ratified in 2002) and the International Convention for the Suppression of the Financing of Terrorism (to which New Zealand is a State Party) and progress compliance with the UN Convention Against Corruption (signed in December 2003).

Member countries’ compliance with the FATF Recommendations is routinely evaluated. New Zealand’s compliance with the Recommendations will be evaluated by a FATF/Asia Pacific Group (APG) Mutual Evaluation process commencing in April 2009 and later publicised in October 2009.

New Zealand to some degree achieves compliance with the Recommendations via the Financial Transactions Reporting Act 1996 (FTRA), which places obligations on financial institutions to undertake measures, such as verifying the identity of customers, keeping records of transactions and verifications of identity, and reporting suspicious transactions to the Commissioner of Police. Compliance with the 9 Special Recommendations relating to terrorist financing is achieved primarily through the Terrorism Suppression Act 2002.

A 2003 assessment of New Zealand’s implementation of FATF’s Recommendations found New Zealand to be non-compliant or materially non-compliant with 8 of the 40 Recommendations and 2 of 8 (latterly extended to 9) Special Recommendations, including core requirements of the regime, which are accorded additional scrutiny and weight. Significant deficiencies in New Zealand’s AML/CFT regime remain, including—

  • financial and non-financial businesses are not required to implement AML/CFT systems, involving, for example, customer due diligence and record keeping procedures, to the standards set out in the FATF Recommendations:

  • not all businesses included in the scope of FATF Recommendations fall within New Zealand’s regime:

  • there is no mandatory supervision and monitoring of reporting entities to ensure that they are carrying out their AML/CFT obligations.

Objectives

The objectives proposed for New Zealand’s AML/CFT regulatory framework are to—

  • detect and deter money laundering and terrorist financing:

  • maintain and enhance New Zealand’s international reputation:

  • contribute to public confidence in the financial system:

  • realise these objectives with minimum cost to industry.

Alternative options

[Information deleted in order to maintain the effective conduct of public affairs through the free and frank expression of opinions between officials and Ministers.]

Status quo

Retaining the status quo is not appropriate given New Zealand’s current system (established in 1996) is not equipped to deal with the technological and international regulatory developments along with the greater interconnectedness of jurisdictions and transactional activity, and the associated risk of domestic and cross-jurisdictional money laundering and terrorism financing. Neither would this option satisfy the objective of progressing New Zealand’s compliance with our international obligations. There have been a number of extensions to the current legislative and administrative framework in recent years, however, the extent to which the current framework needs to change rules out the option of a simple patch.

Implementation without supervisory system

An alternative approach would be to introduce the AML/CFT obligations for financial institutions and casinos as per the preferred option set out below, without a supervision system to support and enforce the implementation of those obligations. This approach, while providing savings to the Crown in the short term, would not satisfy the FATF’s test of having an effective regime. FATF recommends explicitly that countries ensure that reporting entities are adequately supervised for compliance with their AML/CFT obligations (Recommendations 23 and 24), competent authorities (including supervisors) are provided with appropriate financial, human, and technical resources (Recommendation 30), and the effectiveness of AML/CFT systems is kept under review (Recommendation 32).

This option is therefore not preferred as it would not satisfy the standard established by the FATF recommendations and, most importantly, would impose compliance costs on compliant businesses for little intelligence benefit. This approach would raise fundamental questions about the integrity of New Zealand’s AML/CFT measures and its commitment to international AML/CFT efforts, and would therefore fail to satisfy the policy objectives of detecting money laundering and terrorist financing and maintaining New Zealand’s international reputation, at minimum cost to industry.

Deferral

An alternative approach would be to defer the proposed legislative AML/CFT reform until 2010, to ensure that business costs are kept to a minimum and allow businesses to attend to managing the most pressing commercial challenges posed by the current financial climate.

This would mean that legislation would not be in force until late 2012 at the earliest. [Information deleted in order to maintain the effective conduct of public affairs through the free and frank expression of opinions between officials and Ministers.]

Immediate full compliance

A fourth alternative approach is to provide for the proposed reforms to take effect at the enactment of the legislation, and at the same time extend the obligations to other industries that the FATF recommendations indicate should be covered by a country’s AML/CFT measures (eg, lawyers, real estate agents, accountants, and other industries considered to be at risk of abuse by money launderers and terrorist financiers). This option is not preferred as it would significantly exacerbate the cost to businesses during the establishment phase through heightening the competition for AML/CFT systems development expertise.

Preferred option

The preferred option is to progress compliance with the FATF Recommendations. The preferred option would see the implementation of a new AML/CFT regime in late 2011 (ie, 2 years following legislative assent) requiring financial institutions and casinos to undertake to—

  • assess their business operating environment (including, for example, product/service offerings and customer base) for money laundering and terrorism financing risks:

  • based on the assessment of risks, and legislative obligations, implement AML/CFT policies and procedures to identify, mitigate, and report suspicious activity, including—

    • identification and verification of customers identities and beneficial ownership considerations:

    • monitoring transactions for unusual or suspicious transactions:

    • established reporting processes:

    • store records of account files, business correspondence, and transactions for 5 years:

  • conduct annual assessments and 2 yearly independent audits of their AML/CFT systems.

Other relevant reporting entities would be brought within scope of the regime in a second phase.

The reform would also see the establishment of a new AML/CFT supervisory regime, involving monitoring and enforcement (with recourse to civil and criminal penalties) of reporting entities’ compliance with their AML/CFT regulatory obligations by the—

  • Securities Commission for issuers of securities, trustee companies, futures dealers, collective investment schemes, brokers, and financial advisers:

  • Reserve Bank of New Zealand (RBNZ) for banks, life insurers, and non-bank deposit takers:

  • Department of Internal Affairs for casinos, non-deposit taking lenders, and money changers, and other financial institutions not supervised by the Securities Commission or RBNZ.

A National Co-ordination Committee, comprising the supervisors, FIU, Ministry of Justice and other agencies involved in the operation of the AML/CFT regime, would be established as a central point of operational co-ordination of the regime to ensure gaps and duplication of supervisory activity are minimised, and that supervisory activity is applied consistency and proportionately.

Costs and benefits

The costs of the overall proposal are estimated as being—

  • (1)Compliance costs for reporting entities, of complying with additional and strengthened AML/CFT requirements.

  • An independent cost estimation (undertaken by Deloitte for the Ministry of Justice in 2008) assessed the start-up costs across financial institutions and casinos as $97 million (to be spread over a 2-year implementation period), with ongoing costs of $21 million per year thereafter. These adjusted figures should be treated with some caution. The data indicated an upper end cost estimate of $249 million for start up costs and $103 million for ongoing costs. However, Deloitte assessed the probable cost being at the lower end of surveyed range, bringing the probable cost more into line with actual experience from overseas jurisdictions; particularly that of Australia.

  • These costs will vary across sectors. Variables include the size and nature of a business, its transaction volumes, its customer base, its current level of compliance with existing AML/CFT requirements, and its ability to share technology and training materials with an overseas parent (depending upon the degree of common platforms). The level of start-up cost is also expected to be directly proportionate to the current preparedness of sectors.

Estimate of business compliance costs (adjusted) ($million)

   Totals by sectorAverage per entity
by sector
   Start-up total across years 1 and 2
($)
Ongoing (year 3 and beyond)
($)
Start-up total across years 1 and 2
($)
Ongoing (year 3 and beyond)
($)
 Registered banks1781.6015.604.800.92
 Non-bank deposit takers700.400.070.010.00
 Life insurers411.800.400.040.01
 Trustee companies3 256 services to finance and investment companies2.200.14N/AN/A
 Other financial institutions9.804.10N/AN/A
 Casinos61.500.900.250.15
 Total 97.3021.21  
  • Of the affected sectors, the banking sector is expected to bear 84% of the start-up cost, and 74% of the ongoing costs, mainly because this sector undertakes the bulk of the transactional activity in the economy. The median estimate of the ongoing cost to the banking sector is 0.12% of gross revenue per year.

  • The banking sector is expected to have lower per transaction costs than other sectors, given economies of scale considerations, it having existing responsibilities under the Financial Transactions Reporting Act 1996 (which is based on earlier FATF recommendations), and that a number of the banks are headquartered in jurisdictions that have already updated their AML/CFT laws to fully meet FATF requirements. The ability to leverage a fully developed parent AML/CFT programme is often one of the single biggest catalysts to reducing costs and ensuring timeliness of programme completion.

  • Across most sectors, account and transaction monitoring and AML/CFT compliance programmes are expected to account for around 90% of start-up costs and 80% of ongoing costs. However, again given the varying transactional environments and readiness of existing systems and capabilities, the sectors will bear costs differently across the various elements of the proposed regime, as illustrated in the table below.

Estimate of compliance burdens across AML/CFT obligations by sector

  Customer IDAccount & transaction monitoringRecord keepingAML programmes
  Start-up totalOngoingStart-up totalOngoingStart-up totalOngoingStart-up totalOngoing
 Registered banks5%5%71%69%7%24%19%
 Non-bank deposit takers0%18%29%75%71%
 Life insurers0%89%75%9%25%
 Trustee companies1%50%77%50%
 Other financial institutions1%16%4%84%71%
 Casinos40%44%13%1%1%47%56%
  • (2)Costs to the Crown of new regulatory functions—

  • [Information deleted in order to maintain the current constitutional conventions protecting the confidentiality of advice tendered by ministers and officials.]

  • monitoring and supervising reporting entities, as entities are not currently supervised in New Zealand for compliance with all AML/CFT requirements. The costs of supervision will be spread across the Securities Commission, RBNZ and the Department of Internal Affairs and will include the costs of performing each of the following functions:

    • issuing guidelines to assist reporting entities to meet their obligations:

    • conducting onsite visits, or commissioning expert third parties to do so:

    • providing feedback to reporting entities on their compliance:

    • taking actions, including enforcement actions, to effect compliance:

  • assessing money laundering risks at national and sector levels, because this assessment is necessary for risk based implementation of regulatory requirements and is not currently undertaken:

  • analysing an increased volume and variety of suspicious transaction reports, (STRs) – because more entities will be required to file suspicious transaction reports, and because all entities will be supervised and monitored in their filing of suspicious transaction reports:

  • ensuring adequate co-ordination of regulatory functions across multiple supervisors, the FIU and other agencies performing AML/CFT regulatory functions, so as to ensure an effective and efficient approach to regulation.

The benefits of implementing the proposed reform are expected to include (once fully implemented)—

  • greater ability of law enforcement agencies to detect, investigate, prosecute, and recover the proceeds of serious crime. Through firms having more systematic and robust risk identification and reporting, the reporting of suspicious transaction activity is expected to increase by between 232% (based on UK’s experience in enacting similar legislation) and 350% (based on Australia’s experience in enacting similar legislation) [information deleted in order to maintain the effective conduct of public affairs through the free and frank expression of opinions between officials and Ministers]:

  • deterrence of serious crime, tax evasion, and the facilitation of terrorism, to the extent that the reform makes the laundering of proceeds of crime and terrorism financing more difficult and costly, and impacts the returns to crime and the capacity to reinvest in further criminal activity. This includes transnational organised crime and international tax evasion, which is expected to become more rather than less prevalent over time given the globalisation of goods, capital, and people is anticipated to grow, rather than shrink. Evidence suggests that robust AML/CFT regimes reduce crime through detection and deterrence mechanisms. A value to this particular benefit is difficult to quantify, [information deleted in order to maintain the effective conduct of public affairs through the free and frank expression of opinions between officials and Ministers]:

  • better compliance with our international obligations, which in turn contributes to New Zealand’s good name and our trade, foreign direct investment, and borrowing interests in the medium term (particularly important goals in the present context of international capital constraints):

  • improved efficiency in the economy through improving market integrity, business and industry reputations, reducing costs to law-abiding businesses and citizens from being exploited and defrauded by criminal interests, and the diversion of resources to uses that would not otherwise be chosen other than for the objective of obscuring criminal offending:

  • improved risk management in New Zealand businesses and industries, with the result of increased fraud detection and deterrence, better bad debt management, and improved domestic investor confidence (particularly important goals in the present context of revelations of financial fraud). International experience suggests that, despite increased compliance costs, firms regard the regulatory burden as acceptable given the benefits in terms of protecting the integrity of their firms. For example, good risk assessment, customer due diligence, and monitoring measures are important from a wider prudential management perspective. Without such measures, financial institutions can become subject to reputation, credit, operational, and legal risks, which can result in significant costs:

  • improved competitiveness for New Zealand based businesses dealing internationally due to reduced risk premium and transaction costs ascribed to those businesses.

The benefits of the proposed reform are considered to outweigh the costs of its implementation.

The reform is estimated to entail a significant net direct quantifiable cost across industry and government in each of the 2 establishment years of approximately [information deleted in order to maintain the current constitutional conventions protecting the confidentiality of advice tendered by ministers and officials] per year. However, while difficult to quantify, the benefits of introducing and passing legislation in 2009 are substantial, particularly in terms of protecting New Zealand’s international reputation and associated medium-term trade and other economic objectives.

In year 3, when the reform takes effect, while the net quantifiable benefit of the proposed reform could range substantially (between a net cost of $17 million and a net benefit of $59 million per year), overall, the benefit of progressing the reform is considered to be substantial to the national interest. The benefits of the reform, particularly in maintaining New Zealand’s international reputation and the flow-on benefits associated with this, while at this point are unquantified, are considered substantial and justify progressing the proposed reform.

Steps taken to minimise compliance costs

A number of countries have implemented AML/CFT reforms in recent years to comply with the revised FATF Recommendations, and have incurred costs in doing so as there is limited scope for discretion in the FATF Recommendations. Recognising the limited discretion available in complying with the Recommendations, the proposal will minimise compliance costs by way of an approach that provides for—

  • a phased implementation, in which financial institutions and casinos are covered by the reform in the first period, whereas certain non-financial institutions (such as the Racing Board and dealers in precious metals and stones) and designated professions (such as lawyers and real estate agents) would be covered in a second phase of reform. These latter groups will be the subject of subsequent Cabinet approval and amendment to the regime and will therefore have a longer period to prepare for new AML/CFT requirements:

  • the establishment of a supervision framework comprising multiple existing regulatory agencies (as opposed to a new dedicated agency), that have existing comparable responsibilities and existing relationships with industry sectors for which they will be responsible for AML/CFT. This benefits industry, by minimising duplication of reporting measures, and ensuring the development of regulation that has benefited from familiarity with sector specific operating environments, and government, by enabling a single agency to undertake multiple functions in relation to a reporting entity or sector:

  • following from the above point, to ensure that a co-ordinated approach to supervision and regulation is taken, a robust governance arrangement is proposed, comprising a legislated operational co-ordination committee, and strategic oversight and monitoring being co-ordinated by the Ministry of Justice:

  • a risk based approach to implementation, so that the resources of reporting entities and supervisors can be concentrated on higher risk situations and saved in lower risk situations:

  • based on the proposed risk assessment exercise, identification of areas where it might be justifiable for New Zealand to aim for a lower cost approach to some low risk activities and customer types:

  • collaboration with industry on developing detailed regulatory provisions.

Implementation and review

Provided the proposed legislative reform receives assent by October 2009, the new regulatory regime would be brought into force 2 years after legislation is passed. The 2-year lead time is to provide for—

  • supervisors and other agencies to increase their capacities and capabilities to undertake additional AML/CFT functions:

  • the Ministry of Justice, in consultation with supervisors, the FIU, and other agencies to finalise any necessary regulations:

  • supervisors and other agencies to develop guidance materials (enforceable and non-enforceable) and to work with reporting entities so that all are aware of their AML/CFT regulatory obligations and of what they must do to achieve compliance:

  • reporting entities to make necessary adjustments and additions to their internal systems and procedures so that they are able to achieve compliance.

A phased approach is also provided for implementation, whereby the regulatory requirements will initially apply to financial institutions and casinos, with a second phase of businesses being brought under the regime at a later date. This will initially mean that New Zealand will not be compliant with FATF Recommendations with respect to these entities.

The Ministry of Justice will monitor and evaluate the overall performance and effectiveness of the new regulatory system, and advise the Minister of Justice on any issues with its performance and options for addressing any such issues.

Consultation

The proposals for a new AML/CFT regulatory system were developed in consultation with the Ministry of Economic Development, the Department of Internal Affairs, the Financial Intelligence Unit of the New Zealand Police, the Customs Service, the Inland Revenue Department, the State Services Commission, the Treasury, the Ministry of Foreign Affairs and Trade, the Reserve Bank of New Zealand, and the Securities Commission. The Department of the Prime Minister and Cabinet has been informed of the proposals.

Financial services providers and members of the public were consulted on the proposals as they were developed. Five consultation documents have been issued for public comment—

  • Money Laundering and New Zealand’s Compliance with FATF Recommendations released in August 2005:

  • a second document entitled Anti-Money Laundering and Countering the Financing of Terrorism: New Zealand’s Compliance with FATF Recommendations released in June 2006:

  • a third discussion document entitled Anti-Money Laundering and Countering the Financing of Terrorism Supervisory Framework released in October 2006.

About 30 submissions from mainly financial institutions and their representatives were received on each of the consultations and incorporated into the policy development. Submitters were also provided with the opportunity to comment on officials’ consideration of their submissions and regular meetings were held with businesses and industry associations during the different phases of consultation and policy development.

Key issues raised by submitters included—

  • supervisory framework—While some indicated support for a single supervisor on the basis of consistency and effectiveness, the majority favoured the multi-supervisor model to minimise compliance associated with duplication of reporting measures. The proposal seeks to manage disadvantages of a multi-supervisory model through the establishment of a national co-ordination committee to manage operational co-ordination of the regime, and the provision of mechanisms to designate responsibility where multi-supervisory responsibilities become apparent:

  • that the framework be appropriate to New Zealand’s broader financial framework, and compatible with international AML/CFT frameworks (particularly that of Australia). These objectives have been key criteria guiding the policy development:

  • support for a risk based approach, provided the approach is supported by regulators with appropriate expectations and guidance provided, particularly for small and medium enterprises. Regulators would inform and provide feedback to businesses about the risk environment, and regulatory expectations. The proposed legislation also provides for the establishment of codes of practice setting out good practice interpretation of legislative requirements. A key goal for the codes is to provide regulatory certainty to reporting entities in areas where uncertainty exists. Codes would provide a legal defence against prosecution but would not be mandatory; reporting entities would have the flexibility to either follow a relevant code or develop their own AML/CFT programme as per their statutory responsibilities.

In addition, in response to requests from submitters—

  • an independent compliance cost estimation was undertaken in 2008 to assess the start-up and ongoing costs across affected sectors (discussed in the cost benefit section above); and

  • a draft Bill setting out key elements of the proposal was released in October 2008 for comment.

Feedback on the compliance cost estimation and exposure draft of legislation has been incorporated into the development of the policy proposal.


Hon Simon Power

Anti-Money Laundering and Countering Financing of Terrorism Bill

Government Bill

46—1

Contents

Standard customer due diligence

Simplified customer due diligence

Enhanced customer due diligence

Ongoing customer due diligence and account monitoring

Reliance on third parties

Prohibitions

Proceedings for civil penalties

Relationship between civil penalty and criminal proceedings

Liability of senior managers

Formal warnings

Enforceable undertakings

Injunctions

Pecuniary penalties

Offence and penalties relating to civil liability act

Offences relating to suspicious transaction reports

Other offences relating to non-compliance with AML/CFT requirements

Offences relating to cross-border transportation of cash

Relationship with Customs and Excise Act 1996

Search warrants

Conduct of entry, search, and seizure

Return and retention of things seized

AML/CFT supervisors

Use and disclosure of information

Financial intelligence functions of Commissioner

Co-ordination

Regulations

Ministerial exemptions

Transitional and savings provisions

Consequential amendments, repeals, and revocation


The Parliament of New Zealand enacts as follows:

1 Title
  • This Act is the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.

2 Commencement
  • (1) This Act comes into force on a date to be appointed by the Governor-General by Order in Council.

    (2) One or more Orders in Council may be made appointing different dates for the commencement of different provisions.

Part 1
Preliminary provisions

3 Purpose
  • The purposes of this Act are—

    • (a) to detect and deter money laundering and the financing of terrorism; and

    • (b) to maintain and enhance New Zealand’s international reputation by adopting, where appropriate in the New Zealand context, recommendations issued by the Financial Action Task Force; and

    • (c) to contribute to public confidence in the financial system.

4 Interpretation
  • In this Act, unless the context otherwise requires,—

    AML/CFT means anti-money laundering and countering the financing of terrorism

    AML/CFT programme means a compliance programme established under section 53(1)

    AML /CFT requirements means the requirements set out in Part 2

    AML/CFT supervisor, in relation to a reporting entity, means the person referred to in section 127(1) that is responsible for supervising the reporting entity under Parts 3 and 4

    applicable threshold value means the threshold value that—

    • (a) is prescribed in regulations; and

    • (b) applies to a particular person, class of persons, transaction, class of transactions, financial activity, or class of financial activities prescribed in regulations

    bearer-negotiable instrument means—

    • (a) a bill of exchange; or

    • (b) a cheque; or

    • (c) a promissory note; or

    • (d) a bearer bond; or

    • (e) a traveller’s cheque; or

    • (f) a money order, postal order, or similar order; or

    • (g) any other instrument prescribed by regulations

    beneficial owner means the individual who―

    • (a) has effective control of a customer or person on whose behalf a transaction is conducted; or

    • (b) owns a prescribed threshold of the customer or person on whose behalf a transaction is conducted

    beneficiary institution, in relation to an electronic transfer of funds from an ordering institution, means any person who receives those funds and then makes those funds available to a person (the payee) by—

    • (a) crediting it to an account held by the payee; or

    • (b) paying it to the payee

    business relationship means a business, professional, or commercial relationship between a reporting entity and a customer that has an element of duration or that is expected by the reporting entity, at the time when contact is established, to have an element of duration

    cash means—

    • (a) physical currency:

    • (b) bearer-negotiable instruments

    cash report means a report made under subpart 6 of Part 2

    casino means the holder of a casino operator’s licence under the Gambling Act 2003

    chief executive means the chief executive of the Ministry

    civil liability act has the meaning set out in section 76

    Commissioner means the Commissioner of Police

    constable has the same meaning as in section 4 of the Policing Act 2008

    control of the Customs has the same meaning as in section 20 of the Customs and Excise Act 1996, except that, for the purposes of this Act, references in that section to goods are to be read as if they were references to cash

    correspondent banking relationship has the meaning set out in section 26(3)

    country includes any State, territory, province, or other part of a country

    customer

    • (a) means a new customer or an existing customer; and

    • (b) includes—

      • (i) a facility holder:

      • (ii) a person conducting or seeking to conduct an occasional transaction through a reporting entity:

      • (iii) a junket organiser as defined in section 4(1) of the Gambling Act 2003:

      • (iv) a person or class of persons declared by regulations to be a customer for the purposes of this Act; but

    • (c) excludes a person or class of persons that is declared by regulations not to be a customer for the purposes of this Act

    Customs officer has the same meaning as in section 2(1) of the Customs and Excise Act 1996

    designated business group means a group of 2 or more persons where—

    • (a) at least 1 member of the group is a reporting entity; and

    • (b) each member of the group has elected, in writing, to be a member of the group and the election is in force; and

    • (c) each election was made in accordance with the regulations (if any); and

    • (d) no member of the group is a member of another designated business group; and

    • (e) each member of the group is—

      • (i) related to each other member of the group within the meaning of section 2(3) of the Companies Act 1993 and is—

        • (A) a reporting entity resident in New Zealand; or

        • (B) a person that is resident in another country with sufficient anti-money laundering and countering the financing of terrorism systems and is supervised or regulated for anti-money laundering and countering the financing of terrorism purposes; or

      • (ii) providing a service under a joint venture agreement, to which each member of the group is a party; or

      • (iii) a government department named in Schedule 1 of the State Sector Act 1988, a State enterprise under the State-Owned Enterprises Act 1986, or a Crown entity under section 7 of the Crown Entities Act 2004; or

      • (iv) related to the entities in subparagraph (iii) through the provision of common products or services; and

    • (f) each member of the group satisfies any conditions that may be prescribed by regulations and that apply to that member

    existing customer, in relation to a reporting entity, means a person who was in a business relationship with the reporting entity immediately before the commencement of Part 2

    facility

    • (a) means any account or arrangement—

      • (i) that is provided by a reporting entity; and

      • (ii) through which a facility holder may conduct 2 or more transactions; and

    • (b) without limiting paragraph (a), includes—

      • (i) a life insurance policy:

      • (ii) membership of a superannuation scheme:

      • (iii) the provision, by a reporting entity, of facilities for safe custody, including (without limitation) a safety deposit box:

      • (iv) an account or arrangement declared by regulations to be a facility for the purposes of this Act; but

    • (c) excludes an account or arrangement declared by regulations not to be a facility for the purposes of this Act

    facility holder, in relation to a facility,—

    • (a) means the person in whose name the facility is established; or

    • (b) if that facility is a life insurance policy, means any person who for the time being is the legal holder of that policy; or

    • (c) if that facility consists of membership of a superannuation scheme, means any person who is a member of the scheme within the meaning of member in section 2(1) of the Superannuation Schemes Act 1989

    financial institution

    • (a) means a person who, in the ordinary course of business, carries on 1 or more of the following financial activities:

      • (i) accepting deposits or other repayable funds from the public:

      • (ii) lending to or for a customer, including consumer credit, mortgage credit, factoring (with or without recourse), and financing of commercial transactions (including forfeiting):

      • (iii) financial leasing (excluding financial leasing arrangements in relation to consumer products):

      • (iv) transferring money or value for, or on behalf of, a customer:

      • (v) issuing or managing the means of payment (for example, credit or debit cards, cheques, traveller’s cheques, money orders, bankers’ drafts, or electronic money):

      • (vi) undertaking financial guarantees and commitments:

      • (vii) trading for the person's own account or for the accounts of customers in any of the following:

        • (A) money market instruments (for example, cheques, bills, certificates of deposit, or derivatives):

        • (B) foreign exchange:

        • (C) exchange, interest rate, or index instruments:

        • (D) transferable securities:

        • (E) commodity futures trading:

      • (viii) participating in securities issues and the provision of financial services related to those issues:

      • (ix) managing individual or collective portfolios:

      • (x) safe keeping or administering of cash or liquid securities on behalf of other persons:

      • (xi) investing, administering, or managing funds or money on behalf of other persons:

      • (xii) underwriting or placement of life insurance or other investment related insurance:

      • (xiii) money or currency changing; and

    • (b) includes a person or class of persons declared by regulations to be a financial institution for the purposes of this Act; but

    • (c) excludes a person or class of persons declared by regulations not to be a financial institution for the purposes of this Act

    financing of terrorism has the same meaning as in section 4(1) of the Terrorism Suppression Act 2002

    gambling inspector has the same meaning as in section 4(1) of the Gambling Act 2003

    government agency means—

    • (a) a government department named in Schedule 1 of the State Sector Act 1988; or

    • (b) a Crown entity under section 7 of the Crown Entities Act 2004; or

    • (c) the Reserve Bank, the Parliamentary Counsel Office, the New Zealand Police, and the New Zealand Security Intelligence Service; or

    • (d) any international counterpart of the entities in paragraphs (a) to (c)

    identity information means information obtained under sections 13, 17, 21, and 24(1) and (2) and any other information relating to identity prescribed by sections 23(b), 26(2)(g), and 27(b)

    individual means a natural person, other than a deceased natural person

    intermediary institution, in relation to a wire transfer, is a person that participates in a transfer of funds that takes place through more than 1 institution but is not an ordering institution or a beneficiary institution

    law enforcement purposes means—

    • (a) the administration of this Act:

    • (b) the detection, investigation, and prosecution of—

      • (i) any offence under this Act; and

      • (ii) a money laundering offence; and

      • (iii) any offence under the Income Tax Act 2007; and

      • (iv) any serious offence (within the meaning of section 243(1) of the Crimes Act 1961):

    • (c) the enforcement of the Proceeds of Crime Act 1991 or the Criminal Proceeds (Recovery) Act 2009:

    • (d) the enforcement of the Misuse of Drugs Act 1975:

    • (e) the enforcement of the Terrorism Suppression Act 2002:

    • (f) the administration of the Mutual Assistance in Criminal Matters Act 1992:

    • (g) the investigation of matters relating to security under the New Zealand Security Intelligence Service Act 1969

    Minister means the Minister who is, with the authority of the Prime Minister, for the time being responsible for the administration of this Act

    Ministry means the department of State that, with the authority of the Prime Minister, is for the time being responsible for the administration of this Act

    money laundering offence means an offence against section 243 of the Crimes Act 1961 or section 12B of the Misuse of Drugs Act 1975 or any act committed overseas that, if committed in New Zealand, would be an offence under those sections of those Acts

    occasional transaction

    • (a) means a transaction that is over the applicable threshold value (whether the transaction is carried out in a single operation or several operations that appear to be linked); and

    • (b) includes a transaction or class of transactions declared by regulations to be an occasional transaction for the purposes of this Act; but

    • (c) excludes—

      • (i) cheque deposits; and

      • (ii) a transaction or class of transactions declared by regulations not to be an occasional transaction for the purposes of this Act

    ordering institution

    • (a) means any person who has been instructed by a person (the payer) to electronically transfer funds controlled by the payer to a person (the payee) who may or may not be the payer on the basis that the transferred funds will be made available to the payee by a beneficiary institution; and

    • (b) includes a person declared by regulations to be an ordering institution for the purposes of this Act; but

    • (c) excludes a person or class of persons declared by regulations not to be an ordering institution for the purposes of this Act

    physical currency means the coin and printed money (whether of New Zealand or of a foreign country) that—

    • (a) is designated as legal tender; and

    • (b) circulates as, and is customarily used and accepted as, a medium of exchange in the country of issue

    Police employee has the same meaning as in section 4 of the Policing Act 2008

    politically exposed person means—

    • (a) an individual who holds in New Zealand the prominent public function of—

      • (i) Prime Minister; or

      • (ii) Minister of the Crown; or

      • (iii) Judge of the Supreme Court; or

      • (iv) Governor of the Reserve Bank of New Zealand; or

      • (v) ambassador or high commissioner; or

      • (vi) Chief of Defence Force; or

      • (vii) board chair, chief executive, or chief financial officer of any State enterprise as defined by the State-Owned Enterprises Act 1986; and

    • (b) an individual who holds in any other country the prominent public function of—

      • (i) Head of State or head of a country or government; or

      • (ii) government minister or equivalent senior politician; or

      • (iii) Supreme Court Judge or equivalent senior Judge; or

      • (iv) governor of a central bank or any other position that has comparable influence to the Governor of the Reserve Bank of New Zealand; or

      • (v) senior foreign representative, ambassador, or high commissioner; or

      • (vi) high-ranking member of the armed forces; or

      • (vii) board chair, chief executive, or chief financial officer of, or any other position that has comparable influence in, any State enterprise; and

    • (c) an immediate family member of a person referred to in paragraph (a) or (b), including—

      • (i) a spouse; or

      • (ii) a partner, being a person who is considered by the relevant national law as equivalent to a spouse; or

      • (iii) a child and the child's spouse or partner; or

      • (iv) a parent; and

    • (d) having regard to information that is public or readily available,—

      • (i) any individual who is known to have joint beneficial ownership of a legal entity or legal arrangement, or any other close relationship, with a person referred to in paragraph (a) or (b); or

      • (ii) any individual who has sole beneficial ownership of a legal entity or legal arrangement that is known to exist for the benefit of a person referred to in paragraph (a) or (b)

    registered bank has the same meaning as in section 2(1) of the Reserve Bank of New Zealand Act 1989

    regulations means regulations made under this Act

    reporting entity means—

    • (a) a financial institution; or

    • (b) a casino; or

    • (c) any other person that is required by any enactment to comply with this Act as if it were a reporting entity

    security has the same meaning as in section 2(1) of the New Zealand Security Intelligence Service Act 1969

    senior manager (and senior management correspondingly) means,—

    • (a) in relation to a reporting entity that is a company, a director within the meaning of section 126 of the Companies Act 1993; and

    • (b) in relation to a reporting entity that is not a company, a person who occupies a position comparable to that of a director (for example, a trustee or partner); and

    • (c) any other person who occupies a position within a reporting entity that allows that person to exercise an influence over the management or administration of the reporting entity (for example, a chief executive or a chief financial officer)

    shell bank has the meaning set out in section 36(2)

    suspicious property report has the same meaning as in section 4(1) of the Terrorism Suppression Act 2002

    suspicious transaction report means a report made under section 37

    transaction

    • (a) means any deposit, withdrawal, exchange, or transfer of funds (in any denominated currency), whether—

      • (i) in cash; or

      • (ii) by cheque, payment order, or other instrument; or

      • (iii) by electronic or other non-physical means; and

    • (b) without limiting paragraph (a), includes—

      • (i)  any payment made in satisfaction, in whole or in part, of any contractual or other legal obligation; and

      • (ii) a transaction or class of transactions declared by regulations to be a transaction for the purposes of this Act; but

    • (c) excludes the following:

      • (i) the placing of any bet:

      • (ii) participation in gambling as defined in section 4(1) of the Gambling Act 2003:

      • (iii) a transaction or class of transactions declared by regulations not to be a transaction for the purposes of this Act

    trustee has the same meaning as in section 2(1) of the Trustee Act 1956

    verification information means information obtained under sections 14, 18, 22, and 25

    wire transfer

    • (a) means a transaction carried out on behalf of a person (the originator) through a reporting entity by electronic means with a view to making an amount of money available to a beneficiary (who may also be the originator) at another financial institution; and

    • (b) includes a transfer or transaction, or class of transfers or transactions, declared by regulations to be a wire transfer for the purposes of this Act; but

    • (c) excludes—

      • (i) transfers and settlements between financial institutions if both the originator and the beneficiary are financial institutions acting on their own behalf; and

      • (ii) credit and debit card transactions if the credit or debit card number accompanies the transaction; and

      • (iii) any other transfer or transaction or class of transfers or transactions declared by regulations not to be a wire transfer for the purposes of this Act.

5 Amounts not in New Zealand currency
  • (1) This section applies if, for the purposes of this Act, it is necessary to determine whether the amount of any cash (whether alone or together with any other amount of cash)—

    • (a) exceeds the applicable threshold value; and

    • (b) is denominated in a currency other than New Zealand currency.

    (2) If this section applies, the amount of the cash is taken to be the equivalent in New Zealand currency,—

    • (a) calculated at the rate of exchange on the date of the determination; or

    • (b) if there is more than 1 rate of exchange on that date, calculated at the average of those rates.

    (3) For the purposes of this section, a written certificate purporting to be signed by an officer of any bank in New Zealand that a specified rate of exchange prevailed between currencies on a specified day, and that at such rate a specified sum in a particular currency is equivalent to a specified sum in terms of the currency of New Zealand, is sufficient evidence of the rate of exchange so prevailing and of the equivalent sums in terms of the respective currencies.

    Compare: 1996 No 9 s 4

6 Act binds the Crown
  • This Act binds the Crown.

Part 2
AML/CFT requirements and compliance

7 Non-compliance not excused by contractual obligations
  • (1) This Act has effect despite anything to the contrary in any contract or agreement.

    (2) No person is excused from compliance with any requirement of this Act or the regulations by reason only that compliance with that requirement would constitute breach of any contract or agreement.

Subpart 1Customer due diligence

8 Definitions
  • In this subpart, unless the context otherwise requires,—

    enhanced customer due diligence means customer due diligence in accordance with the requirements set out in sections 21 to 27 and any other requirements prescribed by regulations

    simplified customer due diligence means customer due diligence in accordance with the requirements set out in sections 17 to 19 and any other requirements prescribed by regulations

    standard customer due diligence means customer due diligence in accordance with the requirements set out in sections 13 to 15 and any other requirements prescribed by regulations.

9 Customer due diligence
  • (1) A reporting entity must conduct customer due diligence on—

    • (a) a customer:

    • (b) any beneficial owner of a customer:

    • (c) any person acting on behalf of a customer.

    (2) For the purposes of subsection (1)(b), a customer who is an individual and who the reporting entity believes on reasonable grounds is not acting on behalf of another person is to be treated as if he or she were also the beneficial owner unless the reporting entity has reasonable grounds to suspect that that customer is not the beneficial owner.

    (3) The type of customer due diligence that must be conducted by a reporting entity is,—

    • (a) in the circumstances described in section 12, at least standard customer due diligence:

    • (b) in the circumstances described in section 16, at least simplified customer due diligence:

    • (c) in the circumstances described in section 20, enhanced customer due diligence.

10 Reliance on risk assessment when establishing level of risk
  • When establishing the level of risk involved for the purposes of this subpart, a reporting entity must rely on its risk assessment undertaken in accordance with sections 54(c) and (f) and 55.

11 Basis for verifying identity
  • Verification of identity must be done on—

    • (a) the basis of documents, data, or information obtained from a reliable and independent source; or

    • (b) any other basis applying to a specified situation, customer, product, service, business relationship, or transaction prescribed by regulations.

Standard customer due diligence

12 Circumstances when standard customer due diligence applies
  • A reporting entity must conduct standard customer due diligence in the following circumstances:

    • (a) if the reporting entity establishes a business relationship with a new customer:

    • (b) if a customer seeks to conduct an occasional transaction through the reporting entity:

    • (c) if, in relation to any customer, the reporting entity suspects that money laundering or financing of terrorism may be involved:

    • (d) if, in relation to any customer, the reporting entity suspects on reasonable grounds that the customer is not who he or she claims to be:

    • (e) if, in relation to an existing customer,—

      • (i) there has been a change in the nature or purpose of the business relationship; or

      • (ii) doubt arises as to the adequacy or veracity of documents, data, or information previously obtained for the purposes of identification or verification of the customer, the beneficial owner, or the person who is acting, or who has acted, on behalf of the customer, as the case may be; or

      • (iii) the reporting entity suspects that a transaction the customer is seeking to conduct may involve money laundering or the financing of terrorism; or

      • (iv) the reporting entity considers that, according to the level of risk involved, it has insufficient information about the customer:

    • (f) any other circumstances specified in regulations.

13 Standard customer due diligence: identity requirements
  • A reporting entity must obtain the following identity information in relation to the persons referred to in section 9(1):

    • (a) the person's full name; and

    • (b) the person's date of birth; and

    • (c) if the person is not the customer, the person's relationship to the customer; and

    • (d) the person's address or registered office; and

    • (e) the person's company identifier or registration number; and

    • (f) any information prescribed by regulations; and

    • (g) any other information that, according to the level of risk involved, could reasonably be obtained.

14 Standard customer due diligence: verification of identity requirements
  • (1) A reporting entity must, according to the level of risk involved,—

    • (a) take all reasonable steps to satisfy itself that the information provided under section 13 is current and correct; and

    • (b) take all reasonable steps to verify any beneficial owner's identity so that the reporting entity is satisfied that it knows who the beneficial owner is; and

    • (c) if a person is acting on behalf of the customer, verify both the customer's and the person's identity and that person's authority to act on behalf of the customer so that the reporting entity is satisfied it knows who the person is and that the person has authority to act on behalf of the customer; and

    • (d) verify any other information prescribed by regulations.

    (2) Except as provided in subsection (3), a reporting entity must carry out verification of identity before establishing a business relationship or conducting an occasional transaction.

    (3) Verification of identity may be completed after the business relationship has been established or the occasional transaction conducted if—

    • (a) it is essential not to interrupt normal business practice; and

    • (b) money laundering and financing of terrorism risks are effectively managed through procedures of transaction limitations and account monitoring; and

    • (c) verification of identity is completed within 5 days of the business relationship being established or the occasional transaction being conducted.

15 Standard customer due diligence: other requirements
  • A reporting entity must also obtain—

    • (a) information on the nature and purpose of the proposed business relationship between the customer and the reporting entity; and

    • (b) sufficient information to determine whether the customer should be subject to enhanced customer due diligence.

Simplified customer due diligence

16 Circumstances when simplified customer due diligence applies
  • (1) A reporting entity may conduct simplified customer due diligence if it establishes a business relationship with one of the following customers or one of the following customers conducts an occasional transaction through the reporting entity:

    • (a) a company that is listed on an exchange registered under Part 2B of the Securities Markets Act 1988:

    • (b) a government department named in Schedule 1 of the State Sector Act 1988:

    • (c) a local government organisation as defined in section 124 of the Local Government Act 2002:

    • (d) the New Zealand Police:

    • (e) the New Zealand Security Intelligence Service Act 1969:

    • (f) any other entity specified in regulations.

    (2) A reporting entity may also conduct simplified customer due diligence on a person who purports to act on behalf of a customer when—

    • (a) the reporting entity already has a business relationship with the customer at the time the person acts on behalf of the customer; and

    • (b) the reporting entity has conducted one of the specified types of customer due diligence on the customer in accordance with this Act and the regulations (if any).

17 Simplified customer due diligence: identity requirements
  • A reporting entity must obtain the following identity information in relation to a person acting on behalf of the customer:

    • (a) the person's full name; and

    • (b) the person's date of birth; and

    • (c) the person's relationship to the customer; and

    • (d) any information prescribed by regulations; and

    • (e) any other information that, according to the level of risk involved, could reasonably be obtained.

18 Simplified customer due diligence: verification of identity requirements
  • (1) A reporting entity must, according to the level of risk involved, verify the identity of a person acting on behalf of a customer and that person's authority to act for the customer so that it is satisfied it knows who the person is and that the person has authority to act on behalf of the customer.

    (2) Verification of identity must be carried out before the business relationship is established or the occasional transaction is conducted or the person acts on behalf of the customer.

    (3) For the purposes of verifying a person's authority to act in the circumstances described in section 16, a reporting entity may rely on an authority provided in an application form or other document provided to the reporting entity that shows a person's authority to act or transact on an account.

19 Simplified customer due diligence: other requirements
  • A reporting entity must also obtain—

    • (a) information on the nature and purpose of the proposed business relationship between the customer and the reporting entity; and

    • (b) sufficient information to determine whether the customer should be subject to enhanced customer due diligence.

Enhanced customer due diligence

20 Circumstances when enhanced customer due diligence applies
  • (1) A reporting entity must conduct enhanced customer due diligence in accordance with sections 21 and 22 in the following circumstances:

    • (a)  if the reporting entity establishes a business relationship with a customer or if a customer seeks to conduct an occasional transaction through the reporting entity and that customer is—

      • (i) a trust or another vehicle for holding personal assets:

      • (ii) a non-resident customer from a country that has insufficient anti-money laundering or countering financing of terrorism systems or measures in place:

      • (iii) a company with nominee shareholders or shares in bearer form:

    • (b) if a customer seeks to conduct, through the reporting entity, a complex, unusually large transaction or unusual pattern of transactions that have no apparent or visible economic or lawful purpose:

    • (c) when a reporting entity considers that the level of risk involved is such that enhanced due diligence should apply to a particular situation:

    • (d) any other circumstances specified in regulations.

    (2) A reporting entity must conduct enhanced customer due diligence in accordance with sections 21, 22, and 23 if it establishes a business relationship with a customer who is a politically exposed person or if a customer who is a politically exposed person seeks to conduct an occasional transaction through the reporting entity.

    (3) A reporting entity must conduct enhanced customer due diligence in accordance with section 24 if it is an ordering institution, an intermediary institution, or a beneficiary institution in relation to a wire transfer.

    (4) A reporting entity must conduct enhanced customer due diligence in accordance with section 26 if it has, or proposes to have, a correspondent banking relationship.

    (5) A reporting entity must conduct enhanced due diligence in accordance with sections 21, 22, and 27 if it establishes a business relationship with a customer, or if a customer seeks to conduct an occasional transaction through the reporting entity, that involves new or developing technologies and products that might favour anonymity.

21 Enhanced customer due diligence: identity requirements
  • In relation to a person referred to in section 9(1), a reporting entity must obtain the information required under section 13 and the following additional information:

    • (a) information relating to the source of the funds or the wealth of the customer; and

    • (b) any other information prescribed by regulations.

22 Enhanced customer due diligence: verification of identity requirements
  • (1) A reporting entity must, according to the level of risk involved,—

    • (a) take all reasonable steps to satisfy itself that the information provided under section 21 is current and correct; and

    • (b) take all reasonable steps to verify any beneficial owner's identity so that the reporting entity is satisfied that it knows who the beneficial owner is; and

    • (c) if a person is acting on behalf of the customer, verify the customer's identity and the identity of the person acting on behalf of the customer in accordance with section 21 and that person's authority to act on behalf of the customer, so that the reporting entity is satisfied it knows who the person is and that the person has authority to act on behalf of the customer; and

    • (d) take all reasonable steps to verify the source of wealth or funds of the customer; and

    • (e) verify any other information prescribed by regulations or required by codes of practice.

    (2) Except as provided in subsection (3), a reporting entity must carry out verification of identity before establishing a business relationship or conducting an occasional transaction.

    (3) Verification of identity may be completed after the business relationship has been established or the occasional transaction conducted if—

    • (a) it is essential not to interrupt normal business practice; and

    • (b) money laundering and financing of terrorism risks are effectively managed through procedures of transaction limitations and account monitoring; and

    • (c) verification of identity is completed within 5 days of the business relationship being established or the occasional transaction being conducted.

23 Politically exposed persons
  • Before a reporting entity establishes a business relationship or conducts an occasional transaction that involves a customer or a beneficial owner who is a politically exposed person, the reporting entity must, in addition to the requirements in sections 21 and 22,—

    • (a) have approval from its senior management for establishing the business relationship in accordance with the regulations (if any); and

    • (b) meet any other requirements prescribed by regulations and that apply to politically exposed persons.

24 Wire transfers: identity requirements
  • (1) A reporting entity that is an ordering institution must identify the originator of a wire transfer that is over the applicable threshold value by obtaining the following information:

    • (a) the originator's full name; and

    • (b) the originator's account number or other identifying information that may be prescribed and allows the transaction to be traced back to the originator; and

    • (c) one of the following:

      • (i) the originator's address:

      • (ii) the originator's national identity number:

      • (iii) the originator's customer identification number:

      • (iv) the originator's place and date of birth; and

    • (d) any information prescribed by regulations; and

    • (e) any other information that, according to the level of risk involved, could reasonably be obtained.

    (2) However, if the wire transfer is a domestic wire transfer, a reporting entity that is an ordering institution may identify the originator by obtaining the originator's account number or other identifying information that may be prescribed and allows the transaction to be traced back to the originator if the reporting entity that is the ordering institution is able to provide the information specified in subsection (1)(a) and (c) to (e) within 3 working days of a request being made by the beneficiary institution.

    (3) Regulations may be made under section 147(g) exempting the reporting entity from the obligation to obtain some or all of the information set out in subsection (1) in relation to a specified transfer or transaction.

    (4) The information obtained by the reporting entity (the ordering institution under subsection (1) or (2), as the case may be) must accompany the wire transfer.

    (5) A reporting entity that is a beneficiary institution must take all practicable steps to ensure that the information specified in subsection (1) or (2), as the case may be, accompanies the wire transfer.

    (6) A reporting entity that is an intermediary institution must transfer the information specified in subsection (1) to the next reporting entity in the chain unless it has a reasonable belief that the final destination of the wire transfer is to a beneficiary institution resident in New Zealand, in which case it may transfer the information specified in subsection (2).

    (7) For the purposes of this section, a domestic wire transfer is a wire transfer where the ordering institution, the intermediary institution, and the beneficiary institution are all in New Zealand.

25 Wire transfers: verification of identity requirements
  • (1) The ordering institution must, according to the level of risk involved,—

    • (a) verify the originator's identity so that the reporting entity is satisfied that the information provided under section 24 is current and correct; and

    • (b) verify any other information prescribed by regulations.

    (2) Verification of the originator's identity must be carried out before the wire transfer is ordered.

26 Correspondent banking relationships
  • (1) A financial institution (the correspondent) that has, or proposes to have, a correspondent banking relationship with a respondent financial institution (the respondent) must, according to the level of risk involved, conduct enhanced customer due diligence as set out in subsection (2) in relation to correspondent accounts that are used for payments to, or receipts from, foreign financial institutions.

    (2) The correspondent must—

    • (a) gather enough information about the respondent to understand fully the nature of the respondent’s business; and

    • (b) determine from publicly available information the reputation of the respondent and whether and to what extent the respondent is supervised for AML/CFT purposes, including whether the respondent has been subject to a money laundering or financing of terrorism investigation or regulatory action; and

    • (c) assess the respondent’s anti-money laundering and countering financing of terrorism controls to ascertain that those controls are adequate and effective; and

    • (d) have approval from its senior management before establishing a new correspondent banking relationship; and

    • (e) document the respective AML/CFT responsibilities of the correspondent and the respondent; and

    • (f) be satisfied that, in respect of those of the respondent’s customers who have direct access to accounts of the correspondent, the respondent―

      • (i) has verified the identity of, and conducts ongoing monitoring in respect of, those customers; and

      • (ii) is able to provide to the correspondent, on request, the documents, data, or information obtained when conducting the relevant customer due diligence and ongoing customer due diligence; and

    • (g) meet any other requirements prescribed by regulations and that apply to correspondent banking relationships.

    (3) For the purposes of this Act, a correspondent banking relationship means a relationship that involves the provision of banking services by a financial institution (the correspondent) to another financial institution (the respondent) if—

    • (a) the correspondent carries on an activity or business at or through a permanent establishment of the correspondent in a particular country; and

    • (b) the respondent carries on an activity or business at or through a permanent establishment of the respondent in another country; and

    • (c) the correspondent banking relationship relates, in whole or in part, to those permanent establishments; and

    • (d) the relationship is not of a kind specified in regulations; and

    • (e) the banking services are not of a kind specified in regulations.

27 New or developing technologies and products that might favour anonymity
  • Before a reporting entity establishes a business relationship or conducts an occasional transaction that involves new or developing technologies and products that might favour anonymity, the reporting entity must, in addition to the requirements in sections 21 and 22,—

    • (a) take any additional measures that may be needed to prevent any new or developing technologies and products from being used in the commission of a money laundering offence or for the financing of terrorism; and

    • (b) meet any other requirements prescribed by regulations and that apply to the particular technology or product.

Ongoing customer due diligence and account monitoring

28 Ongoing customer due diligence and account monitoring
  • (1) This section applies to a business relationship between a reporting entity and a customer.

    (2) A reporting entity must conduct ongoing customer due diligence and undertake account monitoring in order to—

    • (a) ensure that the business relationship and the transactions relating to that business relationship are consistent with the reporting entity’s knowledge about the customer and the customer’s business and risk profile; and

    • (b) identify any grounds for reporting a suspicious transaction under section 37(1)(b).

    (3) When conducting ongoing customer due diligence and undertaking account monitoring, the reporting entity must have regard to—

    • (a) the type of customer due diligence conducted when the business relationship with the customer was established; and

    • (b) the level of risk involved.

    (4) When conducting ongoing customer due diligence and undertaking account monitoring, a reporting entity must do at least the following:

    • (a) regularly review the customer's account activity and transaction behaviour; and

    • (b) regularly review any customer information obtained under sections 13, 15, 17, 19, 21, 23, 24, 26, and 27, or, in relation to an existing customer, any customer information the reporting entity holds about the customer; and

    • (c) anything prescribed by regulations.

Reliance on third parties

29 Reliance on member of designated business group
  • (1) A reporting entity (member A) that is a member of a designated business group may—

    • (a) rely on another member of the group (member B) to conduct any customer due diligence procedures required for customer due diligence under this Act or the regulations as long as—

      • (i) any identity information is given to member A by member B before member A establishes a business relationship or an occasional transaction is conducted; and

      • (ii) any verification information is given to member A by member B as soon as practicable, but no later than 5 days, after the business relationship is established or the occasional transaction is conducted:

    • (b) adopt that part of an AML/CFT programme of another member of the group that relates to record keeping, account monitoring, ongoing customer due diligence, and annual reporting subject to any conditions prescribed by regulations:

    • (c) use another member of the group's risk assessment if that risk assessment is relevant to member A's business:

    • (d) make a suspicious transaction report on behalf of any other member or all members of the designated business group.

    (2) This section is subject to section 33, which relates to the protection of personal information.

    Compare: Anti-Money Laundering and Counter-Terrorism Financing Act 2006 s 36(4) (Aust)

30 Reliance on other reporting entities or persons in another country
  • (1) Subject to the conditions in subsection (2), a reporting entity may rely on another person (who is not an agent) to conduct the customer due diligence procedures required for customer due diligence under this Act or the regulations.

    (2) The conditions are that—

    • (a) the person being relied on is either—

      • (i) a reporting entity; or

      • (ii) a person who is resident in a country with sufficient anti-money laundering and countering financing of terrorism systems and measures in place and who is supervised or regulated for AML/CFT purposes; and

    • (b) the person has a business relationship with the customer concerned; and

    • (c) the person has conducted relevant customer due diligence procedures to at least the standard required by this Act and regulations and has provided to the reporting entity—

      • (i) relevant identity information before the reporting entity establishes a business relationship or an occasional transaction is conducted; and

      • (ii) relevant verification information as soon as practicable, but no later than 5 days, after the business relationship is established or the occasional transaction is conducted; and

    • (d) the person has consented to conducting the customer due diligence procedures for the reporting entity and to providing all relevant information to the reporting entity; and

    • (e) any other conditions prescribed by regulations are complied with.

    (3) Despite subsection (1), a reporting entity, and not the person carrying out the customer due diligence procedure, is responsible for ensuring that customer due diligence is carried out in accordance with this Act.

31 Reliance on agents
  • Subject to any conditions that may be prescribed by regulations, a reporting entity may authorise a person to be its agent and rely on that agent to conduct the customer due diligence procedures and obtain any information required for customer due diligence under this Act or the regulations.

32 Use of information obtained from third party conducting customer due diligence
  • Information obtained from a third party conducting customer due diligence under sections 29 to 31 for a reporting entity may only be used by that entity for the purpose of complying with this Act and the regulations.

33 Protection of personal information and designated business groups
  • (1) This section applies to personal information that is either—

    • (a) identity or verification information received for the purposes of section 29(1)(a); or

    • (b) information received for the purposes of section 29(1)(b).

    (2) Any information supplied by any member of a designated business group to another member of that group must be subject to privacy protections at least equivalent to those set out in privacy principles 5 to 11 in section 6 of the Privacy Act 1993.

    (3) Each member of the designated business group must agree, in writing, to comply with privacy principles 5 to 11 in section 6 of the Privacy Act 1993 or their equivalent if the member is resident overseas.

    (4) The reporting entity that provides information to another member of its designated business group remains responsible for the use or disclosure of that information.

    (5) A reporting entity may use or disclose information to which this section applies only as follows:

    • (a) it may use identity and verification information received for the purposes of section 29(1)(a) in a suspicious transactions report:

    • (b) it may disclose information for the purposes of section 29(1)(b) to another member of the designated business group unless such disclosure is likely to result in a suspicious transaction report being filed by the member to whom the information is disclosed.

Prohibitions

34 Prohibitions if customer due diligence not conducted
  • If, in relation to a customer, a reporting entity is unable to conduct customer due diligence in accordance with this subpart, the reporting entity—

    • (a) must not establish a business relationship with the customer; and

    • (b) must terminate any existing business relationship with the customer; and

    • (c) must not carry out a transaction with or for the customer; and

    • (d) must consider whether to make a suspicious transactions report; and

    • (e) may disclose the possibility of making a suspicious transaction report only to a person referred to in section 43(2).

35 Prohibition on false customer names and customer anonymity
  • (1) A reporting entity must not,—

    • (a) knowingly or recklessly, set up a facility for a customer on the basis of customer anonymity:

    • (b) without lawful justification or reasonable excuse, set up a facility for a customer under a false customer name.

    (2) Subsection (1) does not apply to a facility—

    • (a) that has a number or other identifier allocated to it and the person who is authorised to act on behalf of the customer in respect of the facility has had their identity verified in accordance with the relevant customer due diligence requirements; or

    • (b) that has been set up for the Commissioner or for the New Zealand Security Intelligence Service for law enforcement purposes.

36 Prohibition on establishing or continuing business relationship involving shell bank
  • (1) A reporting entity must not establish or continue a business relationship with, or allow an occasional transaction to be conducted through it by,—

    • (a) a shell bank; or

    • (b) a financial institution that has a correspondent banking relationship with a shell bank.

    (2) For the purposes of subsection (1), a shell bank is a corporation that—

    • (a) is incorporated in a foreign country; and

    • (b) is authorised to carry on banking business in its country of incorporation; and

    • (c) does not have a physical presence in its country of incorporation; and

    • (d) is not an affiliate of another corporation that—

      • (i) is incorporated in a particular country; and

      • (ii) is authorised to carry on banking business in its country of incorporation; and

      • (iii) is sufficiently supervised and monitored in carrying on its banking business; and

      • (iv) has a physical presence in its country of incorporation.

    (3) For the purposes of paragraph (d) of the definition of shell bank in subsection (2), a corporation is affiliated with another corporation if, and only if,—

    • (a) the corporation is a subsidiary of the other corporation; or

    • (b) both corporations are under common effective control; or

    • (c) both corporations are declared to be affiliated in accordance with regulations (if any).

    (4) For the purposes of the definition of shell bank in subsection (2), a corporation has a physical presence in a country if, and only if,—

    • (a) the corporation carries on banking business at a place in that country; and

    • (b) banking operations of the corporation are managed or conducted from that place.

    Compare: Anti-Money Laundering and Counter-Terrorism Financing Act 2006 ss 15, 95 (Aust)

Subpart 2Suspicious transaction reports

37 Reporting entities to report suspicious transactions
  • (1) Despite any other enactment or any rule of law, but subject to section 39 of this Act and to section 44(4) of the Terrorism Suppression Act 2002, this section applies if—

    • (a) a person conducts or seeks to conduct a transaction through a reporting entity; and

    • (b) the reporting entity has reasonable grounds to suspect that the transaction or proposed transaction is or may be—

      • (i) relevant to the investigation or prosecution of any person for a money laundering offence; or

      • (ii) relevant to the enforcement of the Misuse of Drugs Act 1975; or

      • (iii) relevant to the enforcement of the Terrorism Suppression Act 2002; or

      • (iv) relevant to the enforcement of the Proceeds of Crime Act 1991 or the Criminal Proceeds (Recovery) Act 2009.

    (2) If this section applies, the reporting entity must, as soon as practicable, but no later than 3 working days after forming its suspicion, report the transaction or proposed transaction to the Commissioner, in accordance with section 38.

    (3) Nothing in subsection (2) requires any lawyer to disclose any privileged communication (as defined in section 39).

    Compare: 1996 No 9 ss 15(1), 19(1)

38 Nature of suspicious transaction report
  • (1) Except as provided in subsection (2), a report under section 37 must—

    • (a) be in the prescribed form (if any); and

    • (b) contain the details prescribed by regulations; and

    • (c) contain a statement of the grounds on which the reporting entity holds the suspicions referred to in section 37(1)(b); and

    • (d) be signed by a person authorised by the reporting entity to sign suspicious transaction reports (unless the report is forwarded by email or another similar means of communication); and

    • (e) be forwarded, in writing, to the Commissioner—

      • (i) by way of secure electronic transmission by a means specified or provided by the Commissioner for this purpose; or

      • (ii) by another means (including, without limitation, by way of transmission by fax or email) that may be agreed from time to time between the Commissioner and the reporting entity concerned.

    (2) However, if the urgency of the situation requires, a suspicious transaction report may be made orally to any Police employee authorised for the purpose by the Commissioner, but in any such case the reporting entity must, as soon as practicable, but no later than 3 working days, forward to the Commissioner a suspicious transaction report that complies with the requirements in subsection (1).

    (3) The Commissioner may confer the authority to receive a suspicious transaction report under subsection (2) on—

    • (a) any specified Police employee; or

    • (b) Police employees of any specified rank or class; or

    • (c) any Police employee or Police employees for the time being holding any specified office or specified class of offices.

    Compare: 1996 No 9 s 15(2)–(4)

39 Privileged communication defined
  • (1) For the purposes of section 37(3), a communication is a privileged communication only if—

    • (a) it is a confidential communication, whether oral or written, passing between—

      • (i) a lawyer in his or her professional capacity and another lawyer in that capacity:

      • (ii) a lawyer in his or her professional capacity and his or her client:

      • (iii) an agent of any person described in subparagraph (i) or (ii), either directly or indirectly; and

    • (b) it is made or brought into existence for the purpose of obtaining or giving legal advice or assistance; and

    • (c) it is not made or brought into existence for the purpose of committing or furthering the commission of some illegal or wrongful act.

    (2) However, where the information consists wholly or partly of, or relates wholly or partly to, the receipts, payments, income, expenditure, or financial transactions of a specified person (whether a lawyer, his or her client, or any other person), it is not a privileged communication if it is contained in, or comprises the whole or part of, any book, account, statement, or other record prepared or kept by the lawyer in connection with a trust account of the lawyer within the meaning of section 6 of the Lawyers and Conveyancers Act 2006.

    (3) For the purposes of this section, references to a lawyer include a firm in which he or she is a partner or is held out to be a partner.

    Compare: 1996 No 9 s 19(2)–(4)

40 Auditors may report suspicious transactions
  • (1) Despite any other enactment or any rule of law, this section applies to a person who, in the course of carrying out the duties of that person’s occupation as an auditor, has reasonable grounds to suspect, in relation to any transaction, that the transaction is—

    • (a) relevant to the investigation or prosecution of any person for a money laundering offence; or

    • (b) relevant to the enforcement of the Terrorism Suppression Act 2002; or

    • (c) relevant to the enforcement of the Proceeds of Crime Act 1991 or the Criminal Proceeds (Recovery) Act 2009.

    (2) A person may report a transaction referred to in subsection (1) to the Commissioner.

    Compare: 1996 No 9 s 16

41 Protection of persons reporting suspicious transactions
  • (1) Subsection (2) applies to a person who—

    • (a) discloses or supplies any information in any suspicious transaction report; or

    • (b) supplies any information in connection with any suspicious transaction report, whether at the time the report is made or afterwards.

    (2) No civil, criminal, and disciplinary proceedings lie against a person to whom subsection (1) applies—

    • (a) in respect of the disclosure or supply, or the manner of the disclosure or supply, by that person of the information referred to in that subsection; or

    • (b) for any consequences that follow from the disclosure or supply of that information.

    (3) If any information is reported, under section 40, to any Police employee by any person, no civil, criminal, or disciplinary proceedings lie against that person—

    • (a) in respect of the disclosure or supply, or the manner of the disclosure or supply, of that information by that person; or

    • (b) for any consequences that follow from the disclosure or supply of that information.

    (4) However, subsections (2) and (3) do not apply if the information was disclosed or supplied in bad faith.

    (5) Nothing in this section applies in respect of proceedings for an offence under any of sections 90 to 95.

    Compare: 1996 No 9 s 17

42 Immunity from liability for disclosure of information relating to money laundering transactions
  • (1) This section applies if—

    • (a) a person does any act that would constitute, or the person believes would constitute, an offence against section 243(2) or (3) of the Crimes Act 1961; and

    • (b) in respect of the doing of that act, that person would have, by virtue of section 244(a) of the Crimes Act 1961, a defence to a charge under section 243(2) or (3) of that Act; and

    • (c) that person discloses, to any Police employee, any information relating to a money laundering transaction (within the meaning of section 243(4) of the Crimes Act 1961), being a money laundering transaction that constitutes (in whole or in part), or is connected with or related to, the act referred to in paragraph (a); and

    • (d) that information is so disclosed, in good faith, for the purpose of, or in connection with, the enforcement or intended enforcement of any enactment or provision referred to in section 244(a) of the Crimes Act 1961; and

    • (e) that person is otherwise under any obligation (whether arising by virtue of any enactment or any rule of law or any other instrument) to maintain secrecy in relation to, or not to disclose, that information.

    (2) If this section applies, then, without limiting section 41 and despite that the disclosure would otherwise constitute a breach of that obligation of secrecy or non-disclosure, the disclosure by that person, to that Police employee, of that information is not a breach of that obligation of secrecy or non-disclosure or (where applicable) of any enactment by which that obligation is imposed.

    Compare: 1996 No 9 s 18

43 Disclosure of information relating to suspicious transaction reports
  • (1) This section and section 44 apply in respect of the following information:

    • (a) any suspicious transaction report:

    • (b) any information the disclosure of which will identify, or is reasonably likely to identify, any person—

      • (i) as a person who, in his or her capacity as an officer or employee of a reporting entity, has handled a transaction in respect of which a suspicious transaction report was made; or

      • (ii) as a person who has prepared a suspicious transaction report; or

      • (iii) as a person who has made a suspicious transaction report:

    • (c) any information that discloses, or is reasonably likely to disclose, the existence of a suspicious transaction report.

    (2) A reporting entity must not disclose information to which this section relates to any person except—

    • (a) a Police employee who is authorised by the Commissioner to receive the information; or

    • (b) the reporting entity’s AML/CFT supervisor; or

    • (c) an officer or employee of the reporting entity, for any purpose connected with the performance of that person's duties; or

    • (d) a barrister or solicitor, for the purpose of obtaining legal advice or representation in relation to the matter.

    (3) A Police employee may only disclose information to which this section applies for law enforcement purposes.

    (4) An AML/CFT supervisor may only disclose information to which this section applies to the Police for law enforcement purposes.

    (5) A person (person A) referred to in subsection (2)(c) to whom disclosure of any information to which that subsection applies has been made must not disclose that information except to another person of the kind referred to in that subsection for the purpose of—

    • (a) the performance of person A's duties; or

    • (b) obtaining legal advice or representation in relation to the matter.

    (6) A person referred to in subsection (2)(d) to whom disclosure of any information to which that subsection applies has been made must not disclose that information except to a person of the kind referred to in that subsection for the purpose of giving legal advice or making representations in relation to the matter.

    (7) Any other person who has information to which this section applies may only disclose that information to the Police for law enforcement purposes.

    Compare: 1996 No 9 s 20

44 Disclosure of information in proceedings
  • (1) No person may disclose, in any judicial proceeding (within the meaning of section 108 of the Crimes Act 1961), any information to which this section applies unless the Judge or, as the case requires, the person presiding at the proceeding is satisfied that the disclosure of the information is necessary in the interests of justice.

    (2) Nothing in this section prohibits the disclosure of any information for the purposes of the prosecution of any offence against section 91 or 92.

    Compare: 1996 No 9 s 21

45 Disclosure of personal information relating to employees or senior managers
  • An AML/CFT supervisor that has, in the performance and exercise of its functions and powers under this Act, obtained personal information about employees or senior managers may disclose that information to another government agency for the following purposes if the AML/CFT supervisor is satisfied that the agency has a proper interest in receiving the information:

    • (a) law enforcement purposes:

    • (b) the detection, investigation, and prosecution of any offence under the following Acts:

      • (i) the Companies Act 1993:

      • (ii) the Financial Advisers Act 2008:

      • (iii) the Financial Service Providers (Registration and Dispute Resolution) Act 2008:

      • (iv) the Gambling Act 2003:

      • (v) the Reserve Bank of New Zealand Act 1989:

      • (vi) the Securities Act 1978:

      • (vii) the Securities Markets Act 1988.

Subpart 3Record keeping

46 Obligation to keep transaction records
  • (1) In relation to every transaction that is conducted through a reporting entity, the reporting entity must keep those records that are reasonably necessary to enable that transaction to be readily reconstructed at any time.

    (2) Without limiting subsection (1), records must contain the following information:

    • (a) the nature of the transaction:

    • (b) the amount of the transaction and the currency in which it was denominated:

    • (c) the date on which the transaction was conducted:

    • (d) the parties to the transaction:

    • (e) if applicable, the facility through which the transaction was conducted, and any other facilities (whether or not provided by the reporting entity) directly involved in the transaction:

    • (f) the name of the officer or employee or agent of the reporting entity who handled the transaction, if that officer, employee, or agent—

      • (i) has face-to-face dealings in respect of the transaction with any of the parties to the transaction; and

      • (ii) has formed a suspicion (of the kind referred to in section 37(1)(b)) about the transaction:

    • (g) any other information prescribed by regulations.

    (3) A reporting entity must retain the records kept by that reporting entity, in accordance with this section, in relation to a transaction for—

    • (a) a period of at least 5 years after the completion of that transaction; or

    • (b) any longer period that the AML/CFT supervisor for the reporting entity, or the Commissioner, specifies.

    Compare: 1996 No 9 s 29

47 Obligation to keep identity and verification records
  • (1) In respect of each case in which a reporting entity is required, under subpart 1 of this Part, to identify and verify the identity of a person, the reporting entity must keep those records that are reasonably necessary to enable the nature of the evidence used for the purposes of that identification and verification to be readily identified at any time.

    (2) Without limiting subsection (1), those records may comprise—

    • (a) a copy of the evidence so used; or

    • (b) if it is not practicable to retain that evidence, any information as is reasonably necessary to enable that evidence to be obtained.

    (3) A reporting entity must retain the records kept by that reporting entity for,—

    • (a) in the case of records relating to the identity and verification of the identity of a person in relation to establishing a business relationship, a period of at least 5 years after the end of that business relationship; or

    • (b) in the case of records relating to the identity and verification of the identity of a person in relation to conducting an occasional transaction, a period of at least 5 years after the completion of that occasional transaction; or

    • (c) in the case of records relating to the identity and verification of the identity of an originator in relation to a wire transfer,—

      • (i) if the wire transfer is conducted by a customer with whom the reporting entity has a business relationship, a period of at least 5 years after the end of that business relationship; or

      • (ii) if the wire transfer is an occasional transaction, a period of at least 5 years after the completion of the wire transfer.

    Compare: 1996 No 9 s 30

48 Obligation to keep other records
  • (1) A reporting entity must keep the following records in addition to the records referred to in sections 46 and 47:

    • (a) records that are relevant to the establishment of the business relationship; and

    • (b) any other records (for example, account files, business correspondence, and written findings) relating to, and obtained during the course of, a business relationship that are reasonably necessary to establish the nature and purpose of, and activities relating to, the business relationship.

    (2) The records must be kept in accordance with section 49 for a period of at least 5 years after the end of the business relationship.

    Compare: 1996 No 9 s 31

49 How records to be kept
  • Records required by this subpart to be kept by a reporting entity must—

    • (a) be kept either in written form in the English language, or so as to enable the records to be readily accessible and readily convertible into written form in the English language; and

    • (b) be kept in the manner prescribed by regulations (if any).

    Compare: 1996 No 9 s 32

50 When records need not be kept
  • Nothing in this subpart requires the retention of any records kept by a reporting entity that has been liquidated and finally dissolved.

    Compare: 1996 No 9 s 33

51 Destruction of records
  • (1) Subject to subsection (2), a reporting entity must ensure that every record retained by that reporting entity under this subpart, and every copy of that record, is destroyed as soon as practicable after the expiry of the period for which the reporting entity is required to retain that record.

    (2) Nothing in this section requires the destruction of any record, or any copy of any record, in any case where there is a lawful reason for retaining that record.

    (3) Without limiting subsection (2), there is a lawful reason for retaining a record if the retention of that record is necessary—

    • (a) in order to comply with the requirements of any other enactment; or

    • (b) to enable a reporting entity to carry on its business; or

    • (c) for the purposes of the detection, investigation, or prosecution of any offence.

    Compare: 1996 No 9 s 34

52 Other laws not affected
  • Nothing in this subpart limits or affects any other enactment that requires any reporting entity to keep or retain a record.

    Compare: 1996 No 9 s 35

Subpart 4Compliance with AML/CFT requirements

53 Reporting entity must have AML/CFT programme and AML/CFT compliance officer
  • (1) A reporting entity must establish, implement, and maintain a compliance programme (an AML/CFT programme) that includes internal procedures, policies, and controls to—

    • (a) detect money laundering and the financing of terrorism; and

    • (b) manage and mitigate the risk of money laundering and financing of terrorism.

    (2) A reporting entity must designate an employee as an AML/CFT compliance officer to administer and maintain its AML/CFT programme.

    (3) The AML/CFT compliance officer must report to a senior manager of the reporting entity.

54 Minimum requirements for AML/CFT programmes
  • A reporting entity’s AML/CFT programme must include adequate and effective procedures, policies, and controls for―

    • (a) vetting—

      • (i) senior managers:

      • (ii) the AML/CFT compliance officer:

      • (iii) any other employee that is engaged in AML/CFT related duties; and

    • (b) training on AML/CFT matters for the following employees:

      • (i) senior managers:

      • (ii) the AML/CFT compliance officer:

      • (iii) any other employee that is engaged in AML/CFT related duties; and

    • (c) complying with customer due diligence requirements (including ongoing customer due diligence); and

    • (d) reporting suspicious transactions; and

    • (e) record keeping; and

    • (f) setting out what the reporting entity needs to do, or continue to do, to manage and mitigate the risks of money laundering and the financing of terrorism; and

    • (g) account monitoring; and

    • (h) examining, and keeping written findings relating to,—

      • (i) complex or unusually large transactions; and

      • (ii) unusual patterns of transactions that have no apparent economic or visible lawful purpose; and

      • (iii) any other activity that the reporting entity regards as being particularly likely by its nature to be related to money laundering or the financing of terrorism; and

    • (i) monitoring, examining, and keeping written findings relating to business relationships and transactions from or in countries that do not have or have insufficient anti-money laundering or countering financing of terrorism systems in place and have additional measures for dealing with or restricting dealings with such countries; and

    • (j) preventing the use, for money laundering or the financing of terrorism, of products (for example, the misuse of technology) and transactions (for example, non-face-to-face business relationships or transactions) that might favour anonymity; and

    • (k) determining when enhanced customer due diligence is required and when simplified customer due diligence might be permitted; and

    • (l) providing when a person who is not the reporting entity may, and setting out the procedures for the person to, conduct the relevant customer due diligence on behalf of the reporting entity; and

    • (m) monitoring and managing compliance with, and the internal communication of and training in, those procedures, policies, and controls; and

    • (n) any other matters prescribed by regulations; and

    • (o) any other matters that may be provided for in the guidance produced by the AML/CFT supervisor for the reporting entity or by the Commissioner.

55 Risk assessment
  • (1) Before conducting customer due diligence or establishing an AML/CFT programme, a reporting entity must first undertake an assessment of the risk of money laundering and the financing of terrorism (a risk assessment) that it may reasonably expect to face in the course of its business.

    (2) In assessing the risk, the reporting entity must have regard to the following:

    • (a) the nature, size, and complexity of its business; and

    • (b) the products and services it offers; and

    • (c) the methods by which it delivers products and services to its customers; and

    • (d) the types of customers it deals with; and

    • (e) the countries it deals with; and

    • (f) the institutions it deals with; and

    • (g) any applicable guidance material produced by AML/CFT supervisors or the Commissioner relating to risk assessments; and

    • (h) any other factors that may be provided for in regulations.

    (3) The risk assessment must be in writing and—

    • (a) identify the risks faced by the reporting entity in the course of its business; and

    • (b) describe how the reporting entity will ensure that the assessment remains current; and

    • (c) enable the reporting entity to determine the level of risk involved in relation to relevant obligations under this Act and the regulations.

56 Review and audit of risk assessment and AML/CFT programme
  • (1) A reporting entity must conduct a review of its risk assessment and AML/CFT programme to—

    • (a) ensure the risk assessment and AML/CFT programme remain current; and

    • (b) identify any deficiencies in the effectiveness of the risk assessment and the AML/CFT programme; and

    • (c) make any changes to the risk assessment or AML/CFT programme identified as being necessary under paragraph (b).

    (2) A reporting entity must ensure its risk assessment and AML/CFT programme are audited every 2 years or at any other time at the request of the relevant AML/CFT supervisor.

    (3) The audit must be carried out by an independent person appointed by the reporting entity who is appropriately qualified to conduct the audit.

    (4) A person appointed to conduct an audit is not required to be—

    • (a) a chartered accountant within the meaning of section 19 of the Institute of Chartered Accountants of New Zealand Act 1996; or

    • (b) qualified to undertake financial audits.

    (5) A person appointed to conduct an audit must not have been involved in—

    • (a) the establishment, implementation, or maintenance of the reporting entity's AML/CFT programme:

    • (b) the undertaking of the reporting entity's risk assessment.

    (6) The audit of the risk assessment is limited to an audit of whether the reporting entity's risk assessment fulfils the requirements in section 55(3).

    (7) As soon as practicable after conducting an audit, the reporting entity must provide a copy to the relevant AML/CFT supervisor.

57 Annual AML/CFT report
  • (1) The reporting entity must prepare an annual report on its risk assessment and AML/CFT programme.

    (2) An annual report must—

    • (a) be in the prescribed form; and

    • (b) take into account the results and implications of the review required by section 56(1) or the audit required by section 56(2); and

    • (c) contain any information prescribed by regulations.

    (3) The reporting entity must provide the annual report to its AML/CFT supervisor at a time agreed between the reporting entity and the AML/CFT supervisor.

58 Reporting entities to ensure that branches and subsidiaries comply with AML/CFT requirements
  • (1) A reporting entity must ensure that its branches and subsidiaries that are in a foreign country apply, to the extent permitted by the law of that country, measures at least equivalent to those set out in this Act and the regulations with regard to the requirements for customer due diligence (including ongoing customer due diligence), risk assessments, AML/CFT programmes, and record keeping.

    (2) If the law of the foreign country does not permit the application of those equivalent measures by the branch or the subsidiary located in that country, the reporting entity must—

    • (a) inform its AML/CFT supervisor accordingly; and

    • (b) take additional measures to effectively handle the risk of a money laundering offence and the financing of terrorism.

    (3) A reporting entity must communicate (where relevant) the policies, procedures, and controls that it establishes, implements, and maintains in accordance with this subpart to its branches and subsidiaries that are outside New Zealand.

Subpart 5Codes of practice

59 Interpretation
  • In this Part, unless the context otherwise requires,—

    code of practice means a code of practice approved by the responsible Minister under section 61, as amended from time to time

    proposed code of practice means a document prepared under section 60(1).

60 AML/CFT supervisors to prepare codes of practice for relevant sectors
  • (1) An AML/CFT supervisor must, if directed to do so by the Minister responsible for that AML/CFT supervisor (the responsible Minister), prepare—

    • (a) 1 or more codes of practice for the sector of activity of the reporting entities for which it is the supervisor under section 127 or in respect of different reporting entities specified by the responsible Minister:

    • (b) an instrument that amends a code of practice or revokes the whole or any provision of a code of practice prepared under paragraph (a).

    (2) The purpose of a code of practice is to provide a statement of practice that assists reporting entities to comply with their obligations under this Act and the regulations.

    (3) A direction under subsection (1) may (without limitation)—

    • (a) relate generally to the obligations imposed on the relevant reporting entities by or under this Act or the regulations or specify particular aspects of those obligations that are to be covered by the code of practice:

    • (b) specify the amendments to be made or their intended effect, and specify the extent of the revocation to be made:

    • (c) indicate the date by which the responsible Minister wishes the code of practice to be provided to him or her:

    • (d) include details about the recommendation that the AML/CFT supervisor is required to provide under section 61(1)(a).

    (4) An AML/CFT supervisor must comply with a direction under subsection (1) as soon as practicable.

    (5) No code of practice has legal effect until approved by the responsible Minister under section 61(6).

61 Procedure for approval and publication of codes of practice
  • (1) The responsible Minister must not approve a code of practice prepared by an AML/CFT supervisor unless—

    • (a) the AML/CFT supervisor has made a recommendation that the Minister should approve the code of practice; and

    • (b) the AML/CFT supervisor has consulted the persons and organisations that the Minister thinks appropriate, having regard to the subject matter of the proposed code of practice.

    (2) In consulting under subsection (1)(b), the AML/CFT supervisor must ensure that—

    • (a) a copy of the proposed code of practice or a summary of its contents, in hard copy or electronic format, is provided to the persons and organisations being consulted; and

    • (b) the persons and organisations being consulted have at least 20 working days to make submissions or representations about the proposed code of practice.

    (3) The responsible Minister may direct the AML/CFT supervisor to reconsider any aspect of the proposed code of practice and to make any amendments that the Minister considers necessary.

    (4) Despite subsection (3),—

    • (a) if the AML/CFT supervisor does not amend the proposed code of practice as directed by the Minister or within the time specified by the Minister, the Minister may make those amendments:

    • (b) the Minister may, after consultation with the AML/CFT supervisor, make any further amendments to the proposed code of practice that he or she considers necessary.

    (5) The responsible Minister must—

    • (a) approve the proposed code of practice as prepared by the AML/CFT supervisor; or

    • (b) approve the proposed code of practice as amended by the AML/CFT supervisor; or

    • (c) approve the proposed code of practice as amended by the Minister after consultation with the AML/CFT supervisor.

    (6) The responsible Minister approves a code of practice by notice in the Gazette, and the notice—

    • (a) must either set out the code of practice or state where copies of the code of practice in hard copy or electronic format may be obtained or viewed:

    • (b) is not a regulation for the purposes of the Acts and Regulations Publication Act 1989, but is a regulation for the purposes of the Regulations (Disallowance) Act 1989.

62 Amendment and revocation of codes of practice
  • (1) A code of practice may be amended or revoked in the same manner as that in which it was made.

    (2) Sections 60, 61, 63, and 64 apply with the necessary modifications to the amendment or revocation of a code of practice.

63 Proof of codes of practice
  • Publication in the Gazette of a notice under section 61(6) is conclusive evidence that the requirements of sections 61(1) to (5) and 62 have been complied with in respect of the approval specified in the notice.

64 Legal effect of codes of practice
  • (1) A reporting entity complies with an obligation imposed on it by or under this Act or the regulations by—

    • (a) complying with those provisions of a code of practice that state a means of satisfying the obligation; or

    • (b) complying with the obligation by some other equally effective means.

    (2) However, a reporting entity may not rely on subsection (1)(b) as a defence to an act or omission on its part unless it has, by notice in writing given before the act or omission occurred, advised the AML/CFT supervisor that it has opted out of compliance with the code of practice and intends to satisfy its obligations by some other equally effective means.

    (3) If a person is charged with an offence in respect of a failure to comply with any provision of this Act, a court must, in determining whether that person has failed to comply with the provision, have regard to any code of practice in force under section 61(6) at the time of the alleged failure relating to matters of the kind to which the provision relates.

    (4) If an application for an injunction against a person has been made under this Act, a court must, in determining whether to grant the injunction, have regard to any code of practice in force under section 61(6).

    (5) If an application for a pecuniary penalty against a person has been made under this Act, a court must, in determining whether to impose a pecuniary penalty, have regard to any code of practice in force under section 61(6) at the time the person engaged in conduct that constituted the relevant civil liability act.

Subpart 6Cross-border transportation of cash

65 Reports about movement of cash into or out of New Zealand
  • (1) A person must not move cash into or out of New Zealand if—

    • (a) the total amount of the cash is more than the applicable threshold value; and

    • (b) the person has not given a report in respect of the movement of that cash in accordance with this subpart; and

    • (c) the movement of that cash is not exempted under this Act or regulations (if any).

    (2) For the purposes of this Act, a person moves cash into New Zealand if the person brings or sends the cash into New Zealand.

    (3) For the purposes of this Act, a person moves cash out of New Zealand if the person takes or sends the cash out of New Zealand.

    Compare: Anti-Money Laundering and Counter-Terrorism Financing Act 2006 ss 53(3), 57(2), 58 (Aust)

66 Reports about receipt of cash from outside New Zealand
  • A person must not receive cash moved to the person from outside New Zealand if—

    • (a) the total amount of the cash is more than the applicable threshold value; and

    • (b) the person has not given a report in respect of the movement of that cash in accordance with this subpart; and

    • (c) the movement of that cash is not exempted under this Act or regulations (if any).

    Compare: Anti-Money Laundering and Counter-Terrorism Financing Act 2006 s 55(3) (Aust)

67 Reporting requirements
  • A report under this subpart must—

    • (a) be in writing in the prescribed form; and

    • (b) contain the prescribed information; and

    • (c) be completed in accordance with regulations (if any); and

    • (d) be provided to a Customs officer before the cash leaves the control of the Customs.

    Compare: 1996 No 9 s 37; Anti-Money Laundering and Counter-Terrorism Financing Act 2006 s 55(5) (Aust)

68 Information to be forwarded to Commissioner
  • (1) If a report is made to a Customs officer under this subpart, that officer must, as soon as practicable, forward the report to the Commissioner.

    (2) If, in the course of conducting a search under this Act, a Customs officer discovers any cash in respect of which a report is required to be made under this subpart but has not been made, that officer must, as soon as practicable, report the details of the search, and of the cash, to the Commissioner.

    (3) Every report made under subsection (2) must be in the form that the Commissioner may determine after consultation with the chief executive of the New Zealand Customs Service.

    (4) The chief executive of the New Zealand Customs Service must—

    • (a) cause a record to be made and kept of―

      • (i) each occasion on which a cash report is made to a Customs officer; and

      • (ii) the details of the identity of the person making the cash report; and

      • (iii) the date on which the cash report is made; and

    • (b) ensure that the record is retained for a period of not less than 1 year after the date on which the cash report is made.

    Compare: 1996 No 9 s 42

Part 3
Enforcement

Subpart 1General provisions relating to Part

Proceedings for civil penalties

69 When and how civil penalty proceedings brought
  • (1) An application for a civil penalty under this Part may be made no later than 6 years after the conduct giving rise to the liability to pay the civil penalty occurred.

    (2) In proceedings for a civil penalty under this Part,—

    • (a) the standard of proof is the standard of proof that applies in civil proceedings; and

    • (b) the relevant AML/CFT supervisor may, by order of the court, obtain discovery and administer interrogatories.

Relationship between civil penalty and criminal proceedings

70 Relationship between concurrent civil penalty proceedings and criminal proceedings
  • (1) Criminal proceedings for an offence under this Part may be commenced against a person in relation to particular conduct whether or not proceedings for a civil penalty under this Part have been commenced against the person in relation to the same or substantially the same conduct.

    (2) Proceedings under this Part for a civil penalty against a person in relation to particular conduct are stayed if criminal proceedings against the person are or have been commenced for an offence under this Part in relation to the same or substantially the same conduct.

    (3) After the criminal proceedings referred to in subsection (2) have been completed or withdrawn, a person may apply to have the stay lifted on the civil penalty proceedings referred to in that subsection.

71 One penalty only rule
  • (1) If civil penalty or criminal proceedings under this Part are brought against a person in relation to particular conduct, a court may not impose a penalty (whether civil or criminal) on the person if a court has already imposed a penalty under this Part in proceedings relating to the same or substantially the same conduct.

    (2) If a person is or may be liable to more than 1 civil penalty under this Part in respect of the same or substantially the same conduct, civil penalty proceedings may be brought against the person for more than 1 civil penalty, but the person may not be required to pay more than 1 civil penalty in respect of the same or substantially the same conduct.

72 Restriction on use of evidence given in civil penalty proceedings
  • (1) Evidence of information given, or evidence of production of documents, by a person is not admissible in criminal proceedings against the person for an offence under this Part or any other enactment if—

    • (a) the person previously gave the evidence or produced the documents in civil penalty proceedings under this Part against him or her, whether or not a civil penalty was imposed; and

    • (b) the proceedings for the civil penalty related to conduct that was the same or substantially the same as the conduct constituting the offence.

    (2) This section does not apply to criminal proceedings in respect of the falsity of the evidence given by the person in the proceedings for the civil penalty.

Liability of senior managers

73 Criminal liability of senior managers
  • (1) A senior manager of a body corporate commits an offence if—

    • (a) the body corporate commits an offence under this Part; and

    • (b) the manager knew that the offence was being or would be committed; and

    • (c) the manager was in a position to influence the conduct of the body corporate in relation to the commission of the offence; and

    • (d) the manager failed to take all reasonable steps to prevent the commission of the offence.

    (2) The maximum penalty for an offence under this section is the maximum penalty that could have been imposed if an individual had been convicted of the offence that the body corporate committed.

    (3) An offence under this section is triable in whatever manner the offence that the body corporate has committed could be tried.

74 Liability of senior managers to civil penalty
  • (1) A senior manager of a body corporate is liable to a civil penalty if—

    • (a) the body corporate engages in conduct that constitutes a civil liability act; and

    • (b) the manager knew that the civil liability act was occurring or would occur; and

    • (c) the manager was in a position to influence the conduct of the body corporate in relation to the civil liability act; and

    • (d) the manager failed to take all reasonable steps to prevent the civil liability act.

    (2) The maximum civil penalty for a civil liability act under this section is the maximum civil penalty that could have been imposed if an individual had engaged in the conduct constituting the civil liability act that the body corporate engaged in.

75 How to establish whether senior manager took all reasonable steps
  • (1) For the purposes of sections 73 and 74, in determining whether a senior manager of a body corporate failed to take all reasonable steps to prevent the commission of an offence or a civil liability act, a court must have regard to the following:

    • (a) what action (if any) the manager took to ensure that the body corporate’s employees, agents, and contractors had a reasonable knowledge and understanding of the requirements to comply with this Act and the regulations, so far as they affect the employees, agents, or contractors concerned:

    • (b) what action (if any) the manager took when he or she became aware that the body corporate was committing an offence or a civil liability act under this Act.

    (2) This section does not limit the generality of sections 73 and 74.

Subpart 2Civil liability

76 Meaning of civil liability act
  • In this Part, a civil liability act occurs when a reporting entity fails to comply with any of the AML/CFT requirements, including, without limitation, when the reporting entity—

    • (a) fails to conduct customer due diligence as required by subpart 1 of Part 2:

    • (b) fails to adequately monitor accounts and transactions:

    • (c) enters into or continues a business relationship with a person who does not produce or provide satisfactory evidence of the person’s identity:

    • (d) enters into or continues a correspondent banking relationship with a shell bank:

    • (e) fails to keep records in accordance with the requirements of subpart 3 of Part 2:

    • (f) fails to establish, implement, or maintain an AML/CFT programme:

    • (g) fails to ensure that its branches and subsidiaries comply with the relevant AML/CFT requirements.

77 Possible responses to civil liability act
  • If a civil liability act is alleged to have occurred, the relevant AML/CFT supervisor may do 1 or more of the following:

    • (a) issue a formal warning under section 78:

    • (b) accept an enforceable undertaking under section 79 and seek an order in the court for breach of that undertaking under section 80:

    • (c) seek an injunction from the High Court under section 83 or 85:

    • (d) apply to the court for a pecuniary penalty under section 88.

Formal warnings

78 Formal warnings
  • (1) The relevant AML/CFT supervisor may issue 1 or more formal warnings to a person if the AML/CFT supervisor has reasonable grounds to believe that that person has engaged in conduct that constituted a civil liability act.

    (2) A formal warning must be—

    • (a) in the prescribed form; and

    • (b) issued in the manner specified in regulations (if any).

Enforceable undertakings

79 Enforceable undertakings
  • (1) The relevant AML/CFT supervisor may accept a written undertaking given by a person in connection with compliance with this Act or the regulations (if any).

    (2) The person may withdraw or vary the undertaking at any time, but only with the consent of the relevant AML/CFT supervisor.

80 Enforcement of undertakings
  • (1) If the relevant AML/CFT supervisor considers that a person who gave an undertaking under section 79 has breached 1 or more of its terms, the relevant AML/CFT supervisor may apply to the court for an order under subsection (2).

    (2) If the court is satisfied that the person has breached 1 or more of the terms of the undertaking, the court may make any or all of the following orders:

    • (a) an order directing the person to comply with any of the terms of the undertaking:

    • (b) an order directing the person to pay to the AML/CFT supervisor an amount up to the amount of any financial benefit that the person has obtained directly or indirectly and that is reasonably attributable to the breach:

    • (c) any order that the court considers appropriate directing the person to compensate any other person who has suffered loss or damage as a result of the breach:

    • (d) any other order that the court considers appropriate.

81 Assessment of compensation for breach of undertakings
  • For the purposes of section 80(2)(c), in determining whether another person (person A) has suffered loss or damage as a result of the breach, and in assessing the amount of compensation payable, the court may have regard to the following:

    • (a) the extent to which any expenses incurred by person A are attributable to dealing with the breach:

    • (b) the effect of the breach on person A's ability to carry on business or other activities:

    • (c) any damage to the reputation of person A's business that is attributable to dealing with the breach:

    • (d) any loss of business opportunities suffered by person A as a result of dealing with the breach:

    • (e) any other matters that the court considers relevant.

Injunctions

82 Powers of High Court not affected
  • The powers in sections 83 to 87 are in addition to, and do not derogate from, any other powers of the High Court relating to the granting of injunctions.

83 Performance injunctions
  • (1) The High Court may, on the application of the relevant AML/CFT supervisor, grant an injunction requiring a person to do an act or thing if—

    • (a) that person has refused or failed, or is refusing or failing, or is proposing to refuse or fail, to do that act or thing; and

    • (b) the refusal or failure was, is, or would be a civil liability act.

    (2) The court may rescind or vary an injunction granted under this section.

84 When High Court may grant performance injunctions
  • (1) The High Court may grant an injunction requiring a person to do an act or thing if—

    • (a) it is satisfied that the person has refused or failed to do that act or thing; or

    • (b) it appears to the court that, if an injunction is not granted, it is likely that the person will refuse or fail to do that act or thing.

    (2) Subsection (1)(a) applies whether or not it appears to the court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing.

    (3) Subsection (1)(b) applies—

    • (a) whether or not the person has previously refused or failed to do that act or thing; or

    • (b) where there is an imminent danger of substantial damage to any other person if that person refuses or fails to do that act or thing.

85 Restraining injunctions
  • (1) The High Court may, on the application of the relevant AML/CFT supervisor or any other person, grant an injunction restraining a person from engaging in conduct that constitutes or would constitute a contravention of a provision of this Act.

    (2) The court may rescind or vary an injunction granted under this section.

86 When High Court may grant restraining injunctions and interim injunctions
  • (1) The High Court may grant an injunction restraining a person from engaging in conduct of a particular kind if—

    • (a) it is satisfied that the person has engaged in conduct of that kind; or

    • (b) it appears to the court that, if an injunction is not granted, it is likely that the person will engage in conduct of that kind.

    (2) The court may grant an interim injunction restraining a person from engaging in conduct of a particular kind if, in its opinion, it is desirable to do so.

    (3) Subsections (1)(a) and (2) apply whether or not it appears to the court that the person intends to engage again, or to continue to engage, in conduct of that kind.

    (4) Subsections (1)(b) and (2) apply—

    • (a) whether or not the person has previously engaged in conduct of that kind; or

    • (b) where there is an imminent danger of substantial damage to any other person if that person engages in conduct of that kind.

87 Undertaking as to damages not required by AML/CFT supervisor
  • (1) If the relevant AML/CFT supervisor applies to the High Court for the grant of an interim injunction under this subpart, the court must not, as a condition of granting an interim injunction, require the AML/CFT supervisor to give an undertaking as to damages.

    (2) However, in determining the AML/CFT supervisor’s application for the grant of an interim injunction, the court must not take into account that the AML/CFT supervisor is not required to give an undertaking as to damages.

Pecuniary penalties

88 Pecuniary penalties for civil liability act
  • (1) On the application of the relevant AML/CFT supervisor, the High Court may order a person to pay a pecuniary penalty to the Crown, or to any other person specified by the court, if the court is satisfied that that person has engaged in conduct that constituted a civil liability act.

    (2) For a civil liability act specified in section 76(b), (c), (d), or (g), the maximum amount of a pecuniary penalty under this Act is,—

    • (a) in the case of an individual, $100,000; and

    • (b) in the case of a body corporate, $1 million.

    (3) For a civil liability act specified in section 76(a), (e), or (f), the maximum amount of a pecuniary penalty under this Act is,—

    • (a) in the case of an individual, $200,000; and

    • (b) in the case of a body corporate, $2 million.

    (4) In determining an appropriate pecuniary penalty, the court must have regard to all relevant matters, including—

    • (a) the nature and extent of the civil liability act; and

    • (b) the likelihood, nature, and extent of any damage to the integrity or reputation of New Zealand’s financial system because of the civil liability act; and

    • (c) the circumstances in which the civil liability act occurred; and

    • (d) whether the person has previously been found by the court in proceedings under this Act to have engaged in any similar conduct.

Subpart 3Offences

Offence and penalties relating to civil liability act

89 Offence and penalties for civil liability act
  • (1) A reporting entity that engages in conduct constituting a civil liability act commits an offence if the reporting entity engages in that conduct knowingly or recklessly.

    (2) It is a defence to the offence under subsection (1) if the reporting entity proves that the reporting entity took all reasonable steps to prevent the commission of the offence.

Offences relating to suspicious transaction reports

90 Failing to report suspicious transaction
  • A reporting entity commits an offence if—

    • (a) a transaction is conducted or is sought to be conducted through the reporting entity; and

    • (b) the reporting entity has reasonable grounds to suspect that the transaction or the proposed transaction is or may be—

      • (i) relevant to the investigation or prosecution of any person for a money laundering offence; or

      • (ii) relevant to the enforcement of the Terrorism Suppression Act 2002; or

      • (iii) relevant to the enforcement of the Proceeds of Crime Act 1991 or the Criminal Proceeds (Recovery) Act 2009; and

    • (c) the reporting entity fails to report the transaction or the proposed transaction to the Commissioner as soon as practicable, but no later than 3 working days, after forming that suspicion.

    Compare: 1996 No 9 s 22(1)

91 Providing false or misleading information in connection with suspicious transaction report
  • A person commits an offence who, in making a suspicious transaction report or in supplying information in connection with that report,—

    • (a) makes any statement that the person knows is false or misleading in a material particular; or

    • (b) omits from any statement any matter or thing without which the person knows that the statement is false or misleading in a material particular.

    Compare: 1996 No 9 s 22(3)

92 Unlawful disclosure of suspicious transaction report
  • (1) A person commits an offence who contravenes section 43

    • (a) for the purpose of obtaining, directly or indirectly, an advantage or a pecuniary gain for that person or any other person; or

    • (b) with intent to prejudice any investigation into—

      • (i) the commission or possible commission of a money laundering offence; or

      • (ii) the financing of terrorism or the possible financing of terrorism.

    (2) A person commits an offence who—

    • (a) is an officer or employee or a former officer or employee of a reporting entity; and

    • (b) has become aware, or became aware, in the course of that person’s duties as such an officer or employee, that any investigation into any transaction or proposed transaction that is the subject of a suspicious transaction report is being, or may be, conducted by the Police; and

    • (c) knows that he or she is not legally authorised to disclose the information; and

    • (d) discloses that information to any other person—

      • (i) for the purpose of obtaining, directly or indirectly, an advantage or a pecuniary gain for that person or any other person; or

      • (ii) with intent to prejudice any investigation into—

        • (A) the commission or possible commission of a money laundering offence; or

        • (B) the financing of terrorism or the possible financing of terrorism.

    Compare: 1996 No 9 s 22(4), (5)

93 Failure to keep or retain adequate records relating to suspicious transaction
  • A reporting entity commits an offence if the reporting entity fails to keep or retain adequate records relating to a suspicious transaction.

94 Obstruction of investigation relating to suspicious transaction report
  • A person commits an offence if the person obstructs any investigation relating to any suspicious transaction report without lawful justification or excuse.

95 Contravention of section 44(1)
  • A person commits an offence if the person acts in contravention of section 44(1) without lawful justification or excuse.

    Compare: 1996 No 9 s 22(8)

96 Defence
  • (1) It is a defence to a charge against a person in relation to a contravention of, or a failure to comply with, subpart 1 of Part 2 if the defendant proves that—

    • (a) the defendant took all reasonable steps to ensure that the defendant complied with that subpart; or

    • (b) in the circumstances of the particular case, the defendant could not reasonably have been expected to ensure that the defendant complied with the subpart.

    (2) In determining, for the purposes of subsection (1)(a), whether or not a defendant took all reasonable steps to comply with subpart 1 of Part 2, the court must have regard to—

    • (a) the nature of the reporting entity and the activities in which it engages; and

    • (b) the existence and adequacy of any procedures established by the reporting entity to ensure compliance with that subpart.

    (3) Except as provided in subsection (4), subsection (1) does not apply unless, within 21 days after the service of the summons, or within such further time as the court may allow, the defendant has delivered to the prosecutor a written notice—

    • (a) stating that the defendant intends to rely on the defence referred to in subsection (1); and

    • (b) specifying the reasonable steps that the defendant will claim to have taken.

    (4) In any such prosecution, evidence that the defendant took a step not specified in the written notice required by subsection (3) is not, except with the leave of the court, admissible for the purpose of supporting a defence under subsection (1).

    Compare: 1996 No 9 s 23

97 Time limit for prosecution of offences relating to civil liability act and suspicious transaction reports
  • A prosecution against a reporting entity or a person for an offence under any of sections 89 to 91 and 93 to 95 must be commenced—

    • (a) within 6 months of the date on which the prosecutor is satisfied that there is sufficient evidence to warrant the commencement of proceedings; but

    • (b) not later than 3 years after the offence was committed.

98 Penalties
  • (1) A reporting entity or person who commits an offence under any of sections 89 to 91 and 93 to 95 is liable, on conviction, to,—

    • (a) in the case of an individual, either or both of the following:

      • (i) a term of imprisonment of not more than 2 years:

      • (ii) a fine of up to $300,000; and

    • (b) in the case of a body corporate, a fine of up to $5 million.

    (2) A person who commits an offence under section 92 is liable, on summary conviction, to,—

    • (a) in the case of an individual, a fine of up to $10,000:

    • (b) in the case of a body corporate, a fine of up to $100,000.

Other offences relating to non-compliance with AML/CFT requirements

99 Structuring transaction to avoid application of AML/CFT requirements
  • A person commits an offence if the person structures a transaction (other than a transaction that involves the cross-border transportation of cash) to avoid the application of any AML/CFT requirements.

100 Offence to obstruct AML/CFT supervisor
  • A person commits an offence if the person wilfully obstructs any AML/CFT supervisor in the exercise of any power conferred or the performance of any function imposed on that supervisor by this Act.

101 Offence to provide false or misleading information to AML/CFT supervisor
  • A person commits an offence if, without reasonable excuse, the person provides information to an AML/CFT supervisor knowing that information to be false or misleading in any material respect.

102 Time limit for prosecution of offences relating to non-compliance with AML/CFT requirements
  • A prosecution against a person for an offence under any of sections 99, 100 and 101 must be commenced—

    • (a) within 6 months of the date on which the prosecutor is satisfied that there is sufficient evidence to warrant the commencement of proceedings; but

    • (b) not later than 3 years after the offence was committed.

103 Penalties
  • (1) A person who commits an offence under section 99 is liable, on conviction, to,—

    • (a) in the case of an individual, either or both of the following:

      • (i) a term of imprisonment of not more than 2 years:

      • (ii) a fine of up to $300,000; and

    • (b) in the case of a body corporate, a fine of up to $5 million.

    (2) A person who commits an offence under either of section 100 or 101 is liable, on conviction, to,—

    • (a) in the case of an individual, either or both of the following:

      • (i) a term of imprisonment of not more than 3 months:

      • (ii) a fine of up to $10,000; and

    • (b) in the case of a body corporate, a fine of up to $50,000.

Offences relating to cross-border transportation of cash

104 Failure to report cash over applicable threshold value moved into or out of New Zealand
  • A person commits an offence if the person fails, without reasonable excuse, to make or cause to be made a cash report, in accordance with subpart 6 of Part 2, concerning cash over the applicable threshold value that the person has moved into or out of New Zealand.

105 Failure to report cash over applicable threshold value received by person in New Zealand from overseas
  • A person commits an offence if the person fails, without reasonable excuse, to make or cause to be made a cash report, in accordance with subpart 6 of Part 2, concerning cash over the applicable threshold value that the person has received in New Zealand from overseas.

106 Structuring cross-border transportation to avoid application of AML/CFT requirements
  • A person commits an offence if the person structures a cross-border transportation of cash to avoid the application of any AML/CFT requirements.

107 Defence
  • It is a defence to an offence under section 104 or 105 in relation to a failure to make or cause to be made a cash report to a Customs officer before cash leaves the control of the Customs if the defendant proves that—

    • (a) the failure was due to some emergency or to any other circumstances outside the reasonable control of the defendant; and

    • (b) the defendant made or caused to be made a report in respect of that cash as soon as practicable after the obligation to make the report arose.

    Compare: 1996 No 9 s 40(3)

108 Providing false or misleading information in connection with cash report
  • A person commits an offence if, without reasonable excuse, the person makes or causes to be made a cash report knowing it is false or misleading in any material respect.

    Compare: 1996 No 9 s 40(1)(b)

109 Offence to obstruct or not to answer questions from Customs officer
  • (1) A person commits an offence if the person wilfully obstructs any Customs officer in the exercise of any power conferred or performance of any duty imposed on that officer by this Act.

    (2) A person commits an offence if, without reasonable excuse, the person fails to answer questions from a Customs officer.

    Compare: 1996 No 9 s 40(2)

110 Penalties
  • A person who commits an offence under any of sections 104, 105, 106, 108, and 109 is liable, on summary conviction, to,—

    • (a) in the case of an individual, either or both of the following:

      • (i) a term of imprisonment of not more than 3 months:

      • (ii) a fine of up to $10,000; and

    • (b) in the case of a body corporate, a fine of up to $50,000.

111 Chief executive of New Zealand Customs Service may deal with cash reporting offences
  • (1) This section applies if, in any case to which section 104 or 105 applies, a person admits in writing that he or she has committed the offence and requests that the offence be dealt with summarily by the chief executive of the New Zealand Customs Service.

    (2) If this section applies, the chief executive of the New Zealand Customs Service may, at any time before an information has been laid in respect of the offence, accept from that person a sum, not exceeding $500, that the chief executive of the New Zealand Customs Service thinks just in the circumstances of the case, in full satisfaction of any fine to which the person would otherwise be liable under section 110.

    (3) If the chief executive of the New Zealand Customs Service accepts any sum under this section, the offender is not liable to be prosecuted for the offence in respect of which the payment was made.

    Compare: 1996 No 9 s 41

Relationship with Customs and Excise Act 1996

112 Relationship with Customs and Excise Act 1996
  • (1) Nothing in this Act limits or affects the Customs and Excise Act 1996.

    (2) The movement of cash in breach of any requirement of this Act or any regulations is, for the purposes of the Customs and Excise Act 1996, the importation or exportation of a prohibited good.

    (3) It is the duty of every Customs officer to prevent the movement of cash that is in breach of any requirement of this Act or any regulations.

    (4) For the purpose of carrying out the duty in subsection (3), a Customs officer may exercise his or her powers under the following sections of the Customs and Excise Act 1996 in relation to uncustomed or prohibited goods:

    • (a) section 145 (questioning persons about goods and debt):

    • (b) section 148 (detention of persons questioned about goods or debt):

    • (c) sections 149, 149A, 149B, 149C(1) and (2), and 149D (which relate to search and seizure):

    • (d) sections 151 and 152 (which relate to examination of goods):

    • (e) section 161 (further powers in relation to documents):

    • (f) section 165 (copying of documents obtained during search):

    • (g) section 166 (retention of documents and goods obtained during search):

    • (h) sections 166A to 166F (which relate to seizure and detention of goods suspected to be tainted property):

    • (i) sections 167 to 172 (which relate to search warrants and use of aids by Customs officers).

Subpart 4Search and seizure

113 Definitions
  • In this subpart, unless the context otherwise requires,—

    document

    • (a) means any record of information; and

    • (b) includes—

      • (i) anything on which there is writing or any image; and

      • (ii) anything on which there are marks, figures, symbols, or perforations that have a meaning for persons qualified to interpret them; and

      • (iii) anything from which sounds, images, or writing can be reproduced, with or without the aid of anything else

    dwellinghouse means a building, or an apartment, a flat, or a unit within a building, that is used as a private residence

    enforcement officer means the relevant AML/CFT supervisor or the Commissioner (as the case may require) and includes a person appointed under section 135 by an AML/CFT supervisor

    evidential material means any thing that there are reasonable grounds for believing is or may be evidence, or may provide or contain evidence, of—

    • (a) an offence under this Part; or

    • (b) an attempt to commit an offence under this Part; or

    • (c) a civil liability act

    occupier, in relation to any place, includes—

    • (a) a person who is present at the place and is in apparent control of it; and

    • (b) any person acting on behalf of the occupier

    place

    • (a) means anywhere on, under, or over any land or water; and

    • (b) includes all or any part of a building, structure, or conveyance

    seize includes to secure against interference

    thing includes—

    • (a) any substance, article, document, container, or equipment; and

    • (b) anything in electronic or magnetic form.

Search warrants

114 Search warrant
  • (1) An enforcement officer may apply for a search warrant in respect of a place.

    (2) The application must be made in writing, on oath, by an enforcement officer.

    (3) A District Court Judge, Justice of the Peace, Community Magistrate, or Registrar may issue a search warrant in respect of a place if satisfied that there are reasonable grounds for believing that there is evidential material at that place.

    (4) Every search warrant must be in the form prescribed by regulations and be directed to—

    • (a) an enforcement officer by name; or

    • (b) a constable by name; or

    • (c) every constable.

    (5) Despite a warrant being directed to another person under subsection (4), it may be executed by any constable.

    (6) The Judge, Justice of the Peace, Community Magistrate, or Registrar issuing the warrant may impose reasonable conditions on its execution.

115 Powers under search warrant
  • (1) A search warrant issued under section 114 authorises the enforcement officer or constable who is executing it, and any person called on by that officer or constable to assist, to do any of the following:

    • (a) enter and search the place at any reasonable time, on 1 occasion within 14 days after the date of the warrant being issued:

    • (b) use reasonable force to—

      • (i) make entry (for example, by breaking open a door); and

      • (ii) open any thing at the place that it is reasonable in the circumstances to open:

    • (c) search for and seize any evidential material at the place:

    • (d) inspect and copy any document; and for that purpose also do any of the following:

      • (i) require any person at the place to produce a particular document:

      • (ii) require any person at the place who has control or knowledge of a document to reproduce, or assist in reproducing, the document in usable form:

      • (iii) operate any equipment at the place:

      • (iv) remove a document temporarily to another place in order to copy it:

    • (e) take into or onto the place whatever equipment and materials the enforcement officer or constable requires for the search:

    • (f) require the occupier of the place to answer any questions put by the enforcement officer or constable.

    (2) An enforcement officer or constable may require the occupier of the place to do the following:

    • (a) hold any thing at the place in an unaltered state for a specified period of up to 5 working days:

    • (b) provide a copy of particular documents within a specified period (which must be a period that is reasonable in the circumstances).

    (3) Nothing in this section limits or affects the privilege against self-incrimination.

Conduct of entry, search, and seizure

116 Assistance with searches
  • (1) An enforcement officer or constable may ask any person to assist the enforcement officer or constable with a search under this subpart.

    (2) A person who assists an enforcement officer or constable must be under the supervision of an enforcement officer or constable.

117 Enforcement officers to show identity card on request
  • (1) An enforcement officer must produce his or her identity card (as issued under section 135(2)) for inspection—

    • (a) on entering a place under this subpart; and

    • (b) at any later time, on request, during a search under this subpart.

    (2) An enforcement officer who fails to comply with subsection (1) ceases to be authorised to enter the place or to exercise any power under this Act or any regulations with respect to the search.

118 Announcement before entry
  • (1) This section applies whenever an enforcement officer or constable enters a place under this subpart, unless the entry is made by consent.

    (2) Before entering the place, the enforcement officer or constable must—

    • (a) announce that he or she is authorised to enter the place; and

    • (b) give any person at the place an opportunity to consent to the entry.

    (3) However, subsection (2) does not apply if the enforcement officer or constable believes on reasonable grounds that—

    • (a) announcing entry would frustrate the purpose of the entry; or

    • (b) immediate entry to the place is required to ensure the safety of any person.

119 Details of warrant to be given to occupier
  • If a place is being searched under a warrant, the enforcement officer or constable must give a copy of the warrant to the occupier or, if no person is present at the time, must leave a copy of the warrant in a prominent situation, marked for the attention of the occupier.

120 Occupier entitled to be present during search
  • (1) The occupier of a place that is subject to a search under this subpart, and who is present at any time during the search, is entitled to observe the search as it is being carried out.

    (2) The right to observe the search ceases if the person observing impedes the search.

    (3) This section does not prevent 2 or more parts of the place being searched at the same time.

121 Use of electronic equipment
  • (1) If an enforcement officer, a constable, or a person assisting a search operates electronic equipment found at a place during a search, the officer, constable, or person must take all reasonable care not to damage the equipment or corrupt information stored on it.

    (2) If, as a result of a failure to take the care required by subsection (1), the owner of the equipment or information, or the occupier of the place that was searched, suffers damage, the owner or occupier may seek damages from the relevant AML/CFT supervisor or the Police (as the case may require) in respect of that damage.

122 Copies of documents seized to be provided
  • (1) When a document that is capable of being copied is seized from a place, it must (if practicable) be copied before the original is removed, and the copy must be left at the place.

    (2) If it is not practicable to copy the document before removing it, it must be copied as soon as practicable after it is removed, and (if practicable) the copy must be promptly delivered to the occupier of the place.

    (3) Subsection (1) does not apply—

    • (a) to documents obtained as a result of operating electronic equipment found at the place if the equipment is not seized and the documents remain stored on it; or

    • (b) if an order under subsection (4) has been made.

    (4) A District Court Judge, Community Magistrate, or Justice of the Peace may make an order waiving the application of subsections (1) and (2) if satisfied that the volume of material to be copied is such that copying it will involve substantial cost and that the cost is not justified.

    (5) An order under subsection (4) may be subject to whatever conditions the person making the order thinks are necessary to protect the interests of the person from whom the documents have been seized.

123 Receipts for things seized
  • (1) A person who seizes any thing during a search under this subpart must provide the occupier with a receipt for the thing seized.

    (2) A single receipt may be given for more than 1 thing.

124 Application of sections 198A and 198B of Summary Proceedings Act 1957
  • (1) Section 198A of the Summary Proceedings Act 1957, so far as applicable and with all necessary modifications, applies in respect of the seizure of any documents under any search warrant as if the search warrant had been issued under section 198 of that Act.

    (2) Section 198B of the Summary Proceedings Act 1957, so far as applicable and with all necessary modifications, applies in respect of accessing any documents under any search warrant as if the search warrant had been issued under section 198 of that Act.

    Compare: 1996 No 9 s 50

Return and retention of things seized

125 Return and retention of things seized
  • (1) An enforcement officer or constable must (subject to any order of a court) immediately return any thing seized under this subpart to the person from whom it was seized if the reason for the thing's seizure no longer exists or it is decided that the thing is not to be used in evidence.

    (2) If a thing has not been returned under subsection (1) within 90 days of its seizure, the enforcement officer or constable must return the thing unless—

    • (a) proceedings in respect of which the thing may afford evidence were instituted within 90 days of its seizure, and those proceedings (including any appeal) have not been completed, or the time within which an appeal may be lodged in those proceedings has not expired; or

    • (b) there is an order in force under section 126 in respect of the thing; or

    • (c) the enforcement officer or constable is otherwise authorised to retain, destroy, or dispose of the thing other than by returning it to the person from whom it was seized; or

    • (d) the person to whom it is to be returned cannot be found or does not wish to take back the thing.

    (3) A thing may be returned conditionally or under such terms and conditions as the relevant AML/CFT supervisor or the Commissioner (as the case may require) thinks fit.

    (4) A thing may not be returned if it is, or is liable to be, forfeited to the Crown.

126 Order to retain things seized
  • (1) If an enforcement officer or constable wishes to retain any thing seized under this subpart for more than 90 days, he or she may apply to a District Court for an order under this section.

    (2) A District Court Judge, Community Magistrate, or Justice of the Peace may make an order under this section if he or she is satisfied that retention of the thing is necessary—

    • (a) for the purpose of investigating an alleged offence or a civil liability act under this Part; or

    • (b) as evidence of an alleged offence or a civil liability act under this Part; or

    • (c) to secure evidence of an alleged offence or a civil liability act under this Part.

    (3) An order made under this section may be made for any period of up to 4 years.

    (4) If made for a shorter period, the order may be renewed at any interval, but the total period of the order, with any renewals, may not exceed 4 years.

    (5) Before making an application, the enforcement officer or constable must—

    • (a) take reasonable steps to discover who has an interest in the thing; and

    • (b) if practicable, notify each person whom the enforcement officer or constable believes has such an interest in the proposed application and any application for a renewal.

Part 4
Institutional arrangements and miscellaneous provisions

Subpart 1Institutional arrangements

AML/CFT supervisors

127 AML/CFT supervisors
  • (1) The AML/CFT supervisors are as follows:

    • (a) for banks, life insurers, and non-bank deposit takers, the Reserve Bank of New Zealand (Reserve Bank) is the relevant AML/CFT supervisor:

    • (b) for issuers of securities, trustee companies, futures dealers, collective investment schemes, brokers, and financial advisers, the Securities Commission is the relevant AML/CFT supervisor:

    • (c) for casinos, non-deposit-taking lenders, money changers, and other reporting entities that are not covered by paragraph (a) or (b), the Department of Internal Affairs is the relevant AML/CFT supervisor.

    (2) If the products or services provided by a particular reporting entity are covered by more than 1 AML/CFT supervisor,—

    • (a) the AML/CFT supervisors concerned may agree on the relevant AML/CFT supervisor that will be the reporting entity’s AML/CFT supervisor for the purposes of this Act; and

    • (b) the relevant AML/CFT supervisor will notify the reporting entity accordingly.

    (3) If the AML/CFT supervisors cannot agree on which AML/CFT supervisor is to be a reporting entity's supervisor under subsection (2), then the AML/CFT co-ordination committee must appoint the AML/CFT supervisor for that entity.

128 Functions
  • The functions of an AML/CFT supervisor are to—

    • (a) monitor and assess the level of risk of money laundering and the financing of terrorism across all of the reporting entities that it supervises:

    • (b) monitor the reporting entities that it supervises for compliance with this Act and the regulations, and for this purpose to develop and implement a supervisory programme:

    • (c) provide guidance to the reporting entities it supervises in order to assist those entities to comply with this Act and the regulations:

    • (d) investigate the reporting entities it supervises and enforce compliance with this Act and the regulations:

    • (e) co-operate through the AML/CFT co-ordination committee (or any other mechanism that may be appropriate) with domestic and international counterparts to ensure the consistent, effective, and efficient implementation of this Act.

129 Powers
  • (1) An AML/CFT supervisor has all the powers necessary to carry out its functions under this Act.

    (2) Without limiting the power conferred by subsection (1), an AML/CFT supervisor may,—

    • (a) on notice, require production of, or access to, all records, documents, or information relevant to its supervision and monitoring of reporting entities for compliance with this Act; and

    • (b) conduct on-site inspections in accordance with section 130; and

    • (c) provide guidance to the reporting entities it supervises by—

      • (i) producing guidelines; and

      • (ii) preparing codes of practice in accordance with section 60; and

      • (iii) providing feedback on reporting entities' compliance with obligations under this Act and the regulations; and

      • (iv) undertaking any other activities necessary for assisting reporting entities to understand their obligations under this Act and the regulations, including how best to achieve compliance with those obligations; and

    • (d) co-operate and share information in accordance with sections 43 and 45 by communicating or making arrangements to communicate information obtained by the AML/CFT supervisor in the performance of its functions and the exercise of its powers under this Act; and

    • (e) in accordance with this Act and any other enactment, initiate and act on requests from any overseas counterparts; and

    • (f) approve the formation of, and addition of members to, designated business groups.

    (3) An AML/CFT supervisor may only use the powers conferred on it under this Act and the regulations for the purposes of this Act.

130 Matters relating to conduct of on-site inspections
  • (1) An AML/CFT supervisor may, at any reasonable time, enter and remain at any place (other than a dwellinghouse or a marae) for the purpose of conducting an on-site inspection of a reporting entity.

    (2) During an inspection, an AML/CFT supervisor may require the reporting entity to answer questions relating to its records and documents and to provide any other information that the AML/CFT supervisor may reasonably require for the purpose of the inspection.

    (3) A person is not required to answer a question asked by an AML/CFT supervisor under this section if the answer would or could incriminate the person.

    (4) Before an AML/CFT supervisor requires a person to answer a question, the person must be informed of the right specified in subsection (3).

    (5) Nothing in this section requires any lawyer to disclose any privileged communication (as defined in section 39).

Use and disclosure of information

131 Power to use information obtained as AML/CFT supervisor in other capacity and vice versa
  • (1) This section applies to information other than personal information.

    (2) The Reserve Bank may use any information obtained or held by it in the exercise of its powers or the performance of its functions and duties under the Reserve Bank of New Zealand Act 1989 for the purpose of exercising its powers or performing its functions and duties under this Act as an AML/CFT supervisor.

    (3) The Reserve Bank may use any information obtained or held by it in the exercise of its powers or the performance of its functions and duties under this Act as an AML/CFT supervisor for the purpose of exercising its powers or performing its functions and duties under the Reserve Bank of New Zealand Act 1989.

    (4) The Securities Commission may use any information obtained or held by it in the exercise of its powers or the performance of its functions and duties under the Securities Act 1978, the Securities Markets Act 1988, and the Financial Advisers Act 2008 for the purpose of exercising its powers or performing its functions and duties under this Act as an AML/CFT supervisor.

    (5) The Securities Commission may use any information obtained or held by it in the exercise of its powers or the performance of its functions and duties under this Act as an AML/CFT supervisor for the purpose of exercising its powers or performing its functions and duties under the Securities Act 1978, the Securities Markets Act 1988, and the Financial Advisers Act 2008.

    (6) The Department of Internal Affairs may use any information obtained or held by it in the exercise of its powers or the performance of its functions and duties under the Gambling Act 2003 for the purpose of exercising its powers or performing its functions and duties under this Act as an AML/CFT supervisor.

    (7) The Department of Internal Affairs may use any information obtained or held by it in the exercise of its powers or the performance of its functions and duties under this Act as an AML/CFT supervisor for the purpose of exercising its powers or performing its functions and duties under the Gambling Act 2003.

132 Restriction on power to use information under section 131
  • An AML/CFT supervisor may only use information obtained under section 131 if the person providing the information was advised of the purpose for which the information was obtained at the time he or she provided that information.

133 Power to disclose information supplied or obtained as AML/CFT supervisor
  • The Commissioner, the New Zealand Customs Service, or an AML/CFT supervisor may disclose any information (that is not personal information) supplied or obtained by it in the exercise of its powers or the performance of its functions and duties under this Act to any government agency for law enforcement purposes if it is satisfied that the agency has a proper interest in receiving such information.

134 Power to use and disclose information supplied or obtained under other enactments for AML/CFT purposes
  • (1) A government agency or an AML/CFT supervisor may disclose to any other AML/CFT supervisor or government agency any information supplied or obtained under an enactment listed in subsection (2) if the disclosure of that information is necessary or desirable for the purpose of ensuring compliance with this Act and the regulations.

    (2) The enactments referred to in subsection (1) are—

    • (a) the Companies Act 1993:

    • (b) the Criminal Proceeds (Recovery) Act 2009:

    • (c) the Customs and Excise Act 1996:

    • (d) the Financial Service Providers (Registration and Dispute Resolution) Act 2008:

    • (e) the Financial Transactions Reporting Act 1996:

    • (f) the Gambling Act 2003:

    • (g) the New Zealand Security Intelligence Service Act 1969:

    • (h) the Proceeds of Crime Act 1991:

    • (i) the Reserve Bank of New Zealand Act 1989:

    • (j) the Securities Act 1978:

    • (k) the Securities Markets Act 1988:

    • (l) the Terrorism Suppression Act 2002.

135 Enforcement officers
  • (1) For the purposes of this Act, an AML/CFT supervisor may appoint any employee as an enforcement officer, on a permanent or temporary basis, to exercise the powers conferred on the AML/CFT supervisor by this Act.

    (2) An AML/CFT supervisor must issue its enforcement officers with an identity card.

    (3) An enforcement officer must—

    • (a) carry his or her identity card at all times when acting as an enforcement officer under this Act or the regulations; and

    • (b) return his or her identity card to the relevant AML/CFT supervisor immediately upon ceasing to be an enforcement officer.

Financial intelligence functions of Commissioner

136 Financial intelligence functions of Commissioner
  • The financial intelligence functions of the Commissioner are to—

    • (a) receive suspicious transaction reports:

    • (b) produce guidance material, including—

      • (i) typologies of money laundering and financing of terrorism transactions:

      • (ii) information for reporting entities on their obligations to report suspicious transactions and how to meet those obligations:

    • (c) provide feedback to reporting entities on the quality and timeliness of their suspicious transaction reporting:

    • (d) enforce requirements to provide suspicious transaction reports:

    • (e) analyse suspicious transaction reports to assess whether any should be referred to investigative branches of the New Zealand Police and to other law enforcement agencies for criminal investigation:

    • (f) access, directly or indirectly, on a timely basis the financial, administrative, and law enforcement information that the Commissioner requires to properly undertake his or her financial intelligence functions, including the analysis of suspicious transaction reports:

    • (g) refer to investigative branches of the New Zealand Police and to other law enforcement agencies any suspicious transaction reports that, in the view of the Commissioner, indicate grounds for criminal investigation:

    • (h) refer suspicious transaction reports and feedback provided to reporting entities on any suspicious transaction reports to AML/CFT supervisors:

    • (i) receive, analyse, and (if appropriate) refer to law enforcement agencies any cash reports:

    • (j) receive, analyse, and (if appropriate) refer to law enforcement agencies any suspicious property reports:

    • (k) produce risk assessments relating to money laundering offences and the financing of terrorism to be used by the Ministry, the Ministry of Justice, AML/CFT supervisors, and the New Zealand Customs Service:

    • (l) co-operate with the Ministry, the Ministry of Justice, AML/CFT supervisors, the New Zealand Customs Service, and any other relevant agencies to help ensure the effective implementation of the requirements under this Act and the regulations.

137 Powers relating to financial intelligence functions of Commissioner
  • The Commissioner may—

    • (a) order production of or access to all records, documents, or information from any reporting entity that is relevant to analysing a suspicious transaction report received by the Commissioner, with or without a court order; and

    • (b) share suspicious transaction reports, cash reports, suspicious property reports, and other financial information and intelligence with domestic and international authorities for the purposes of this Act and the regulations.

138 Delegation of powers of Commissioner
  • (1) The Commissioner may from time to time in writing, either generally or particularly, delegate to a constable of a level of position not less than inspector the Commissioner's powers under section 137(a).

    (2) Where any constable exercises any power conferred under subsection (1), that constable must, within 5 days after the day on which the constable exercises the power, give the Commissioner a written report on the exercise of that power and the circumstances in which it was exercised.

    (3) A constable who purports to perform a power under a delegation—

    • (a) is, in the absence of proof to the contrary, presumed to do so in accordance with the terms of that delegation; and

    • (b) must produce evidence of his or her authority to do so, if reasonably requested to do so.

    (4) Every delegation under this section is revocable at will and does not prevent the exercise of any power by the Commissioner.

139 Guidelines relating to reporting of suspicious transactions
  • (1) Subject to section 140, the Commissioner must issue, in respect of each kind of reporting entity to which this Act applies, guidelines—

    • (a) setting out any features of a transaction that may give rise to a suspicion that the transaction is or may be—

      • (i) relevant to the investigation or prosecution of any person for a money laundering offence; or

      • (ii) relevant to the enforcement of the Terrorism Suppression Act 2002; or

      • (iii) relevant to the enforcement of the Proceeds of Crime Act 1991 or the Criminal Proceeds (Recovery) Act 2009:

    • (b) setting out any circumstances in which a suspicious transaction report relating to such a transaction may be made orally in accordance with section 38(2), and the procedures for making such an oral report.

    (2) Suspicious transaction guidelines must be issued in such manner as the Commissioner from time to time determines.

    (3) The Commissioner may issue an amendment or revocation of any suspicious transaction guidelines.

    (4) Without limiting subsection (1), suspicious transaction guidelines issued under this section may relate to 1 or more kinds of reporting entities, and such guidelines may make different provision for different kinds of reporting entities and different kinds of transactions.

    Compare: 1996 No 9 s 24

140 Consultation on proposed guidelines
  • (1) The Commissioner must, before issuing any suspicious transaction guidelines,—

    • (a) consult with, and invite representations from, the Privacy Commissioner under the Privacy Act 1993, and must have regard to any such representations; and

    • (b) give public notice of the Commissioner's intention to issue the guidelines, which notice must contain a statement—

      • (i) indicating the Commissioner's intention to issue the guidelines; and

      • (ii) inviting reporting entities that are likely to be affected by the proposed guidelines, and industry organisations that are representative of those reporting entities, to express to the Commissioner, within any reasonable period that is specified in the notice, their interest in being consulted in the course of the development of the guidelines; and

    • (c) consult with, and invite representations from, those reporting entities and industry organisations who express such an interest, and must have regard to any such representations.

    (2) Nothing in subsection (1) prevents the Commissioner from adopting any additional means of publicising the proposal to issue any suspicious transaction guidelines or of consulting with interested parties in relation to such a proposal.

    (3) This section applies to any amendment or revocation of any suspicious transaction guidelines.

    Compare: 1996 No 9 s 25

141 Availability of guidelines
  • On a request by any reporting entity in respect of which any suspicious transaction guidelines are for the time being in force, or by any industry organisation that represents the reporting entity, the Commissioner must, without charge,—

    • (a) make those guidelines, and all amendments to those guidelines, available for inspection by that reporting entity or, as the case requires, that industry organisation at Police National Headquarters; and

    • (b) provide copies of those guidelines, and all amendments to those guidelines, to that reporting entity or, as the case requires, that industry organisation.

    Compare: 1996 No 9 s 26

142 Review of guidelines
  • (1) The Commisioner must review from time to time any suspicious transaction guidelines for the time being in force.

    (2) Sections 139 and 140 apply, with all necessary modifications, in relation to any such review as if the review were a proposal to issue suspicious transaction guidelines.

    Compare: 1996 No 9 s 27

Co-ordination

143 Role of Ministry
  • The Ministry, in consultation with other agencies with AML/CFT roles and functions, is responsible for advising on the overall effectiveness of the AML/CFT regulatory system, including—

    • (a) advising the Minister on outcomes and objectives for AML/CFT regulation and how best to achieve these (including links to other Ministry initiatives); and

    • (b) monitoring, evaluating, and advising the Minister on the performance of the AML/CFT regulatory system in achieving the Government’s outcomes and objectives for it; and

    • (c) advising the Minister on any changes necessary to the AML/CFT regulatory system to improve its effectiveness; and

    • (d) administering the relevant AML/CFT legislation.

144 AML/CFT co-ordination committee
  • (1) The chief executive must establish an AML/CFT co-ordination committee consisting of—

    • (a) a representative from the Ministry; and

    • (b) a representative from the New Zealand Customs Service; and

    • (c) every AML/CFT supervisor; and

    • (d) a representative of the Commissioner; and

    • (e) such other persons as are invited from time to time by the chief executive in accordance with subsection (2).

    (2) Any person invited under subsection (1)(e) must be employed in a government agency.

    (3) The chair of the AML/CFT co-ordination committee is the chief executive.

145 Role of AML/CFT co-ordination committee
  • The role of the AML/CFT co-ordination committee is to ensure that the necessary connections between the AML/CFT supervisors, the Commissioner, and other agencies are made in order to ensure the consistent, effective, and efficient operation of the AML/CFT regulatory system.

146 Functions
  • The functions of the AML/CFT co-ordination committee are to—

    • (a) facilitate necessary information flows between the AML/CFT supervisors, the Commissioner, and other agencies involved in the operation of the AML/CFT regulatory system:

    • (b) facilitate the production and dissemination of information on the risks of money-laundering offences and the financing of terrorism in order to give advice and make decisions on AML/CFT requirements and the risk-based implementation of those requirements:

    • (c) facilitate co-operation amongst AML/CFT supervisors and consultation with other agencies in the development of AML/CFT policies and legislation:

    • (d) facilitate consistent and co-ordinated approaches to the development and dissemination of AML/CFT guidance materials and training initiatives by AML/CFT supervisors and the Commissioner:

    • (e) facilitate good practice and consistent approaches to AML/CFT supervision between the AML/CFT supervisors and the Commissioner:

    • (f) provide a forum for examining any operational or policy issues that have implications for the effectiveness or efficiency of the AML/CFT regulatory system.

Subpart 2Miscellaneous provisions

Regulations

147 Regulations
  • The Governor-General may, by Order in Council, make regulations for all or any of the following purposes:

    • (a) prescribing requirements (generic and sector-specific) for standard, simplified, enhanced, and ongoing customer due diligence and any other AML/CFT requirements, including, but not limited to, the following:

      • (i) information to be provided or obtained for the purposes of identification and verification:

      • (ii) the circumstances in which a particular type of customer due diligence must be conducted:

      • (iii) specifying entities for which a reporting entity may conduct simplified customer due diligence:

      • (iv) the conditions in which third parties may be relied on to conduct customer due diligence:

      • (v) the conditions on which a member of a designated business group may adopt the AML/CFT programme of another member of the group:

      • (vi) requirements for AML/CFT programmes:

      • (vii) the circumstances in which corporations are deemed to be affiliated:

      • (viii) the factors that a reporting entity must have regard to when assessing risk:

    • (b) excluding certain relationships or banking services from the application of section 26 (which relates to correspondent banking relationships):

    • (c) prescribing instruments to be bearer-negotiable instruments for the purposes of this Act:

    • (d) prescribing the forms of, and the information to be included in, applications, warrants, reports, and other documents required under this Act:

    • (e) prescribing amounts or thresholds that are required to be prescribed for the purposes of this Act:

    • (f) prescribing the information to be included in records and the manner in which records are to be kept by reporting entities, or any specified class or classes of reporting entities:

    • (g) exempting a reporting entity from its obligation to obtain some or all of the information set out in section 24(1) in relation to a specified transfer or transaction:

    • (h) prescribing other identifying information that allows a transaction to be traced back to the originator for the purposes of section 24(1):

    • (i) exempting certain movements of cash from the application of subpart 6 of Part 2:

    • (j) prescribing matters that apply to politically exposed persons:

    • (k) prescribing the manner in which any notice, report, or other document required by this Act is to be given or served:

    • (l) prescribing for the form of a formal warning and the manner in which it must be issued:

    • (m) specifying Acts for which disclosure of personal information may be made by an AML/CFT supervisor for the purposes of the detection, investigation, and prosecution of offences under the specified Act:

    • (n) prescribing offences in respect of the contravention of, or non-compliance with, any provision of any regulations made under this section, and prescribing fines, not exceeding $2,000, that may, on conviction, be imposed in respect of any such offences:

    • (o) providing for any other matters contemplated by this Act or necessary for its administration or necessary for giving it full effect.

    Compare: 1996 No 9 s 56

148 Regulations relating to application of Act
  • (1) The Governor-General may, by Order in Council on the recommendation of the Minister, make regulations for the following purposes:

    • (a) exempting or providing for the exemption of any transaction or class of transactions from all or any of the provisions of this Act:

    • (b) prescribing threshold values for the purposes of sections 65 and 66 and the person or class of persons, transaction or class of transactions, financial activity or class of financial activities to which that threshold value applies:

    • (c) declaring an account or arrangement to be, or not to be, a facility and the circumstances and conditions in which an account or arrangement is to be, or not to be, a facility for the purposes of this Act:

    • (d) declaring a person or class of persons to be, or not to be, a reporting entity and the circumstances and conditions in which a person or class of persons is to be, or not to be, a reporting entity for the purposes of this Act:

    • (e) declaring a transaction or class of transactions to be, or not to be, an occasional transaction and the circumstances and conditions in which a transaction or class of transactions is to be, or not to be, an occasional transaction for the purposes of this Act:

    • (f) declaring a transfer or transaction or a class of transfers or transactions not to be a wire transfer and the circumstances and conditions in which a transfer or transaction or class of transfers or transactions is not a wire transfer for the purposes of this Act:

    • (g) declaring a person or class of persons to be, or not to be, a customer and the circumstances and conditions in which a person or class of persons is to be, or not to be, a customer for the purposes of this Act:

    • (h) declaring a person or class of person to be, or not to be, a financial institution for the purposes of this Act.

    (2) The Minister must, before making any recommendation, have regard to—

    • (a) the purposes of this Act and the Financial Transactions Reporting Act 1996; and

    • (b) the risk of money laundering and the financing of terrorism; and

    • (c) the impact on the prevention, detection, investigation, and prosecution of offences; and

    • (d) the level of regulatory burden on a reporting entity; and

    • (e) whether the making of the regulation would create an unfair advantage for a reporting entity or would disadvantage other reporting entities; and

    • (f) the overall impact that making the regulation would have on the integrity of, and compliance with, the AML/CFT regulatory regime.

    (3) The Minister must also, before making any recommendation,—

    • (a) do everything reasonably possible on the Minister's part to advise all persons who in the Minister's opinion will be affected by any regulations made in accordance with the recommendation, or representatives of those persons, of the proposed terms of the recommendation and of the reasons for it; and

    • (b) give such persons or their representatives a reasonable opportunity to consider the recommendation and to make submissions on it to the Minister, and the Minister must consider those submissions; and

    • (c) give notice in the Gazette, not less than 28 days before making the recommendation, of the Minister's intention to make the recommendation and state in the notice the matters to which the recommendation relates; and

    • (d) make copies of the recommendation available for inspection by any person who so requests before any regulations are made in accordance with the recommendation.

    (4) Failure to comply with subsection (3) does not affect the validity of any regulations made under this section.

    (5) Any regulations made under this section expire on the day that is 5 years after the date on which the regulations come into force.

149 Regulations relating to countermeasures
  • (1) The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for, or in relation to, prohibiting or regulating the entering into of transactions or business relationships between a reporting entity and any other person.

    (2) Regulations made for the purposes of subsection (1)

    • (a) may be of general application; or

    • (b) may be limited by reference to any or all of the following:

      • (i) a specified transaction:

      • (ii) a specified party:

      • (iii) a specified overseas country.

    (3) The Governor-General may, by Order in Council, declare a country outside New Zealand to be a prescribed overseas country for the purposes of this section.

    (4) Any regulations made under subsection (1) expire on the day that is 5 years after the date on which the regulations come into force.

    Compare: Anti-Money Laundering and Counter-Terrorism Financing Act 2006 s 102 (Aust)

150 Consultation not required for consolidation of certain regulations and minor amendments
  • The Minister is not required to comply with section 148(3) in respect of the making of any regulations to the extent that the regulations—

    • (a) revoke any regulations made under section 148 and, at the same time, consolidate the revoked regulations, so that they have the same effect as those revoked regulations; or

    • (b) make minor amendments to regulations.

    Compare: 1996 No 9 s 56A

Ministerial exemptions

151 Minister may grant exemptions
  • (1) The Minister may, in the prescribed form, exempt any of the following from the requirements of all or any of the provisions of this Act:

    • (a) a reporting entity or class of reporting entities; or

    • (b) a transaction or class of transactions

    (2) The Minister may grant the exemption—

    • (a) unconditionally; or

    • (b) subject to any conditions the Minister thinks fit.

    (3) Before deciding to grant an exemption and whether to attach any conditions to the exemption, the Minister must have regard to the following:

    • (a) the intent and purposes of the Financial Transactions Reporting Act 1996:

    • (b) the intent and purpose of this Act and any regulations:

    • (c) the risk of money laundering and the financing of terrorism associated with the reporting entity, including, where appropriate, the products and services offered by the reporting entity and the circumstances in which the products and services are provided:

    • (d) the impacts on prevention, detection, investigation, and prosecution of offences:

    • (e) the level of regulatory burden to which the reporting entity would be subjected in the absence of an exemption:

    • (f) whether the exemption would create an unfair advantage for the reporting entity or disadvantage third party reporting entities:

    • (g) the overall impact that the exemption would have on the integrity of, and compliance with, the AML/CFT regulatory regime.

152 Minister must consult before granting exemption
  • Before granting an exemption under section 151, the Minister must consult with—

    • (a) the Ministers responsible for the AML/CFT supervisors; and

    • (b) any other persons the Minister considers appropriate having regard to those matters listed in section 151(3).

153 Requirements relating to exemptions
  • (1) The exemption must include an explanation of the reason for granting the exemption.

    (2) The exemption—

    • (a) must be granted for a period specified by the Minister but that period must not be more than 5 years; and

    • (b) may, at any time, be varied or revoked by the Minister.

    (3) The exemption must be notified in the Gazette.

Transitional and savings provisions

154 Transitional and savings provisions
  • Transitional and savings provisions relating to the coming into force of this Act are set out in Schedule 1.

Consequential amendments, repeals, and revocation

155 Amendments to other enactments
  • (1) The enactments specified in Part 1 of Schedule 2 are amended in the manner indicated in that part of that schedule (being consequential amendments relating to the bringing into force of provisions relating to cross-border transportation of cash).

    (2) The enactments specified in Part 2 of Schedule 2 are amended in the manner indicated in that schedule (being consequential amendments to other enactments).

    (3) The regulations specified in Part 3 of Schedule 2 are revoked.


Schedule 1
Transitional and savings provisions

s 154

1 Offences and breaches of Financial Transactions Reporting Act 1996
  • (1) This section applies to an offence under, or a breach of, the Financial Transactions Reporting Act 1996 that was committed before the commencement of this Act.

    (2) If this section applies, then for the purpose of doing the things specified in subsection (3), the Financial Transactions Reporting Act 1996 continues to have effect as if this Act had not been enacted.

    (3) The things are as follows:

    • (a) investigating the offence or breach:

    • (b) commencing, continuing, or completing proceedings for the offence or breach:

    • (c) imposing a penalty for the offence or breach (which, for the avoidance of doubt, must be the same as the penalty that applied to the offence or the breach before this Act was enacted).

2 Barred proceedings
  • Nothing in this Act enables any proceedings to be brought that were barred before the commencement of this Act.

3 Pending proceedings
  • Any proceedings that have been commenced under the Financial Transactions Reporting Act 1996 before the commencement of this Act may be continued and completed after that commencement as if this Act had not been enacted, and the Financial Transactions Reporting Act 1996 applies accordingly.

Schedule 2
Consequential amendments

s 155

Part 1
Amendments to Financial Transactions Reporting Act 1996 relating to cross-border transportation of cash

Section 2(1)

Definitions of cash report, control of the Customs, and Customs officer: repeal.

Definition of cash: omit except in Part 5 of this Act,.

Part 5

Repeal.

Part 2
Amendments to other enactments

Crimes Act 1961 (1961 No 43)

Section 244: insert after paragraph (b):

  • (ba) the enforcement or intended enforcement of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009; or.

Criminal Proceeds (Recovery) Act 2009 (2009 No 8)

Definition of financial institution in section 5(1): repeal and substitute:

financial institution means either a person within the meaning of financial institution as defined in section 3 of the Financial Transactions Reporting Act 1993 or as defined in section 4 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.

Customs and Excise Act 1996 (1996 No 27)

Section 166A(b)(ii): repeal and substitute:

  • (ii) subpart 6 of Part 2 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009; and.

Section 166C(4): insert after paragraph (b):

  • (ba) Anti-Money Laundering and Countering Financing of Terrorism Act 2009:.

Financial Transactions Reporting Act 1996 (1996 No 9)

Long Title: insert the Terrorism Suppression Act 2002 and after enforcement of.

Paragraph (b) of the Long Title: repeal.

Paragraphs (a) to (f), (h), (i), and (k) of the definition of financial institution in section 3(1): repeal.

Section 15(1)(b): insert after subparagraph (i):

  • (ia) that the transaction or proposed transaction is or may be relevant to the enforcement of the Terrorism Suppression Act 2002; or.

Section 16: insert after paragraph (a):

  • (ab) that the transaction or proposed transaction is or may be relevant to the enforcement of the Terrorism Suppression Act 2002; or.

Section 21(2): insert after paragraph (a):

  • (ab) the enforcement of the Terrorism Suppression Act 2002:.

Section 22(1)(b): insert after subparagraph (i):

  • (ia) that the transaction or proposed transaction is or may be relevant to the enforcement of the Terrorism Suppression Act 2002; or.

Section 24(1)(a): insert after subparagraph (i):

  • (ia) that the transaction or proposed transaction is or may be relevant to the enforcement of the Terrorism Suppression Act 2002; or.

Section 28: insert after paragraph (d):

  • (da) the enforcement of the Terrorism Suppression Act 2002:.

Section 56(1)(b): omit Parts 2 and 5 of this Act and substitute Part 2.

Misuse of Drugs Act 1975 (1975 No 116)

Section 12B(6): insert after paragraph (b):

  • (ba) the enforcement or intended enforcement of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009; or.

Mutual Assistance in Criminal Matters Act 1992 (1992 No 86)

Definition of financial institution in section 2(1): repeal and substitute:

financial institution means either a person within the meaning of financial institution as defined in section 3 of the Financial Transactions Reporting Act 1996 or as defined in section 4 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.

Terrorism Suppression Act 2002 (2002 No 34)

Section 44(1)(b): insert or by a reporting entity after by a financial institution.

Section 44(1)(b): insert or the reporting entity after the financial institution.

Section 44(1)(d)(ii): insert or reporting entity, as the case may be, after that Commissioner and the financial institution.

Section 44(2): insert or the reporting entity after the financial institution.

Section 44(4): insert or reporting entity after financial institution in each place where it appears.

Section 44(5): repeal and substitute:

  • (5) In this section, section 47, and Schedule 5,—

    • (a) in the case of a financial institution to which the Financial Transactions Reporting Act 1996 applies, facility, financial institution, suspicious transaction report, and transaction have the meanings given to them in section 2(1) of that Act; and

    • (b) in the case of a reporting entity to which the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 applies, facility, reporting entity, suspicious transaction report, and transaction have the meanings given to them in section 4 of that Act.

Section 47(1)(b)(i): insert or reporting entity after financial institution.

Section 47A(1)(a): insert after subparagraph (i):

  • (ia) subpart 6 of Part 2 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009; or.

Section 47C(5): insert after paragraph (a):

  • (ab) Anti-Money Laundering and Countering Financing of Terrorism Act 2009:.

Schedule 5: insert or reporting entity after financial institution in each place where it appears.

Part 3
Regulations revoked

Financial Transactions Reporting (Interpretation) Regulations 1997 (SR 1997/48)