Date posted: 10/08/2023

NZ AML Update August 2023

Annual reports due and an update on the Accountants Risk Summary and regulatory amendments package.

In brief

  • Annual AML/CFT reports are due 31 August 2023.
  • Certain tax transfers are subject to an exemption and the DIA should be notified accordingly.
  • The Government has issued a package of regulatory amendments.

Annual AML/CFT reports for 1 July 2022 to 30 June 2023

All reporting entities supervised by the Department of Internal Affairs (DIA) must complete an annual report of their risk assessment and AML/CFT programme. This annual report can be submitted through the AML Online portal.

The annual AML/CFT report for the 2022/2023 period must be submitted any time between 1 July and 31 August 2023.

Tax transfers exemption

Certain tax transfers are subject to an exemption granted last year by the Associate Minister of Justice under section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act). The exemption applies with effect from 15 July 2022 for a period of five years.

Tax transfers by a tax agent remain captured activities under the Act. Therefore, accounting practices that carry out tax transfers (including where this is their only captured activity) are still AML reporting entities. Please notify the DIA where you only carry out tax transfers that are subject to the exemption.

In addition, a condition of the exemption is that there remains an obligation to perform suspicious activity reporting (SAR) for the specific tax transfers that are included in the exemption.

Updated Accountants Risk Summary

The DIA has updated the Accountants Risk Summary. This summary is for accountants that are reporting entities under the AML/CFT Act. It provides a summary of the key money laundering and terrorism financing risks faced by accountants and identifies red flags for suspicious activities.

Early Regs package update

The Government has issued a package of regulatory amendments to the Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) regime.

The regulations will come into force in three stages from 31 July 2023 to 1 June 2025.

  • The first stage of changes, which come into force on 31 July 2023, are to provide immediate regulatory relief for many reporting entities where risk has been identified as being low.
  • The second stage, which comes into force 1 June 2024, introduces new obligations for entities that already have existing AML/CFT obligations.
  • The final stage, which comes into force 1 June 2025, introduces new obligations on sectors that were not previously subject to AML/CFT obligations.

These changes include:

  • Definitions and terminology that are out of date, unclear, or not fit-for-purpose.
  • Obligations which are set to a standard of risk higher than actual risk, causing unnecessary costs to business.
  • Gaps in regulations relating to known high-risk areas of cash, virtual assets, high-risk countries, and high-risk customers.
  • Limited visibility of remittance networks and consequent limited levels of assurance.
  • Areas of the FATF Standards where we currently fall short, such as availability of information relating to wire transfers.
  • Inability to share information between agencies and the AML/CFT regime where information has been supplied or obtained under legislation not listed in section 140 of the AML/CFT Act.

The Department of Internal Affairs is currently working on guidance for reporting entities to help them understand and comply with these changes.

For completeness, through the review process, some changes which were intended to come into effect in July 2023 were deemed not suitable to be included in this first stage. The Ministry of Justice is exploring alternative means to bring these changes into effect. A list of the changes not suitable for inclusion is available on the Ministry of Justice’s website.

Search related topics