Date posted: 30/11/2021 2 min read

In latest AML exemption application move, NZ Govt will remake decision

The Minister of Justice will remake the decision on Chartered Accountants Australia and New Zealand’s anti-money laundering (AML) exemption application following CA ANZ’s legal challenge against the Department of Internal Affair’s interpretation of the AML legislation.

In brief

  • The Minister of Justice will remake the decision on CA ANZ’s AML exemption application for tax transfers undertaken by tax agents
  • The move is the latest step in CA ANZ legal challenge against the Department of Internal Affair’s interpretation of the AML legislation

NOVEMBER 2021 UPDATE - there has been a delay in the delivery of our AML exemption while the Parliamentary Counsel Office finalises the drafting of the legislative instrument.

In a positive development, the Department of Internal Affairs, as AML supervisor for the accounting sector, has provided an undertaking that it will not take any enforcement action for non-compliance with the AML / CFT Act 2009 against a tax agent for tax transfers carried out in good faith, for the types of tax transfer that are included in the proposed exemption.

The following tax transfers are included in the proposed exemption:

  • Transfers of excess tax within a taxpayer's accounts - section 173L Tax Administration Act 1994 (TAA)
  • Transfers to a company in the same group of companies - section 173M(2)(a) TAA where there is 50% or more commonality of shareholding of commonly owned groups of companies
  • Transfers between shareholder-employees and companies  - section173M(2)(b) and (c) TAA
  • Transfers between partners in the same partnership - section 173M(2)(d) TAA
  • Transfers to relatives as defined for the purposes of section 173M(2)(e) TAA
  • Transfers from a beneficiary to a trustee of the family trust – section 173M(2)(f) TAA
  • Transfers from trustee of family trust to beneficiary - section 173M(3) TAA
  • Transfers from the taxpayer to a tax pooling intermediary - section 173M(2)(fb) TAA
  • Transfers from a company to a shareholder (not being a trust) with at least 25% of the shareholding, and vice versa
  • Transfer from a trustee to a beneficiary where they are the same person but acting in different capacities
  • Transfers from a trust to a company in which the trust has a 100% shareholding and vice versa, or the trust has a majority shareholding with any other shares in the company being held by a shareholder-employee of the company, as that term is defined in section YA 1 of the Income Tax Act 2007, and vice versa
  • Transfers between family trusts where settlors are relatives
  • Transfers from a fund manager to a fund (restricted to fund managers who are licensed under the Financial Markets Conduct Act 2013)
  • Transfers from an agent to a non-resident foreign insurer.

NB: The exemption is in draft and needs to be finalised by the Parliamentary Counsel Office and approved by the Associate Minister of Justice.  While we do not expect the scope or substance of the exemption to change, we cannot guarantee that. 

Please contact us at [email protected] if you have any questions.


SEPTEMBER 2021 UPDATE - there has been a further adjournment of the court case to November this year, to allow the Ministry of Justice more time to make recommendations to the Associate Minister before a decision on the exemption can be made.


AUGUST 2021 UPDATE - there has been a further adjournment of the court case to early October this year, to allow the Ministry of Justice more time to make recommendations to the Associate Minister before a decision on the exemption can be made.


MAY 2021 UPDATE - there has been a further adjournment of the court case to early August this year, to allow the Ministry of Justice more time to make recommendations to the Associate Minister before a decision on the exemption can be made.


NOVEMBER 2020 UPDATE - The Ministry of Justice will not defend Chartered Accountants Australia and New Zealand's High Court application for a judicial review of CA ANZ's anti-money laundering (AML) exemption application for tax transfers undertaken by tax agents. 

Instead the Minister of Justice will remake the decision on CA ANZ's original exemption application. 

The Government declined CA ANZ's application for an exemption in April 2020.

CA ANZ has agreed to adjourn its action, including the declaratory judgment application, until early May 2021 to allow the Minister time to remake the decision.  

In October 2020, CA ANZ launched a legal challenge against the Department of Internal Affair's interpretation of the AML legislation, its latest step in relation to AML rules and tax transfers undertaken by tax agents.

CA ANZ filed a statement of claim against the Attorney General asking the High Court to rule on two matters. 

It sought a declaratory judgment on whether tax transfers undertaken by tax agents are a captured AML activity and a judicial review of the Ministerial decision not to grant our application for an exemption for such tax transfers.

Peter Vial FCA, New Zealand Country Head of CA ANZ said that depending on the outcome of the reconsideration of the exemption application, CA ANZ will either file amended pleadings or discontinue the action.

Ministerial Exemption application background

In October 2018 CA ANZ applied to the Ministry of Justice for a Ministerial Exemption from the AML/CFT Act in relation to tax transfers performed by tax agents.

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