The Ministry for Justice called for submissions on the drafting of regulations contained in the Early Regulatory Exposure Draft. These proposed regulations address particular issues identified in the earlier Statutory Review of the AML/CFT regime (which CA ANZ submitted on).

We commend the Government’s commitment to address particular areas of uncertainty within the AML/CFT regime. We appreciate that the policy parameters for this specific consultation are already set, and the focus is on the drafting approach. However, we note that the proposed amendments to the Regulations are a stop-gap solution for issues that need to be more substantively addressed through subsequent policy development, legislative change, sector engagement, and education.

As identified by the Statutory Review, there are several areas of the AML/CFT regime that require reform. Given the need for reform and long-term certainty for reporting entities, the third parties they engage with, and the public, we strongly recommend the timeframe for implementation of the Statutory Review recommendations is accelerated.

Implementing all the recommendations will provide a more robust foundation for achieving the underlying objectives of the AML/CFT regime. We strongly encourage the Government to consider appropriate resourcing to achieve this accelerated timeframe.

We also encourage greater transparency and note that some of the proposed amendments to the Regulations could add to reporting entities’ compliance burdens, especially those relating to compliance programmes, additional requirements for enhanced customer due diligence, and risk ratings.

Our submission below includes the above as well as some further detail and specific comments about particular regulations.