Stronger regulations to fight money laundering and financial terrorism
The Government is strengthening its regime to combat the harmful effects of money laundering and financial terrorism and making it easier for small businesses and consumers to comply, Justice Minister Kiri Allan has announced.
“Our country is a safe place to do business, but we want to do as much as possible to disrupt the criminal economy, and improve how we detect, deter and eliminate money laundering,” Kiri Allan said.
“Money laundering can threaten our international reputation. Because New Zealand is one of the least corrupt countries in the world, it also make us more attractive for international money-launderers.
“Last year an evaluation by the Financial Action Task Force found New Zealand was a highly effective international partner contributing to foreign investigations and tenaciously pursuing money laundering globally, but that there were still ways we could strengthen our laws and regulations.
The Government is now introducing changes aimed at improving our regime, following a review of the Anti-Money Laundering and Counter Financing of Terrorism Act.
The review also forms part of the Government’s response to the Royal Commission of Inquiry in response to the March 15 attacks.
“The Act disrupts serious and organised crime, as well as terrorism, by imposing obligations on businesses that provide specific financial and non-financial services, known as reporting entities,” Kiri Allan said.
Broadly, these obligations require reporting entities to assess their money laundering and terrorism financing risks, identify and know their customers, report suspicious activities and transactions, and maintain various records.
“We’ve listened to businesses and agencies and heard what wasn’t working for them. We’re now taking immediate action to improve the regime’s effectiveness,” Kiri Allan said.
The changes include:
- relaxing the requirement on businesses to verify the address of most customers;
- extending the timeframe for businesses to submit Prescribed Transactions Reports;
- exempting registered charities from AML/CFT obligations when they are providing small loans.
Further changes will address areas of known risk or vulnerabilities, improving efficiencies and reducing compliance costs, and improving compliance with international money laundering standards.
Read the review online here.