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Among other changes, reporting entities have been directed to conduct customer due diligence on nominee directors and nominee general partners of companies.
To enhance the current money laundering laws of the country, New Zealand’s government is planning to introduce updates in the AML/CFT (Anti-Money Laundering and Counter Financing of Terrorism) system starting from July 9, 2021.
The decision has surfaced as two key regulations of the AML/CFT system were set to expire. Namely, the AML/CFT Exemptions were scheduled for expiry on June 30, 2020, while AML/CFT Definitions Regulation 2011 partially expired on July 27, 2021.
The cabinet has agreed to make amendments to the Exemption Regulations, the Requirements and Compliance Regulations, and the Definitions Regulations.
The changes mentioned in the document published on the Ministry of Justice’ website are summarised below.
- Ensure that limited partnerships can more easily be included in designated business groups.
- AML/CFT audits will be required every three years. However, the Financial Markets Authority (FMA) can request a more frequent audit or a less frequent audit.
- Companies will be exempt, for 30 days unless otherwise notified by the Police, from having to conduct enhanced due diligence as may be required under the Commissioner’s Order.
- Businesses are required to ask customers to provide information regarding nominee director relationships. If the relationship is found, enhanced due diligence must be implemented by the business (a transitional compliance period will apply until 29 April 2022).
- A change is being introduced to clarify that AML/CFT obligations apply to ordering and beneficiary institutions of wire transfers over NZD 1,000, even if no existing business relationship has been established with the sender or receiver.
In-depth detail regarding Anti-Money Laundering and Countering Financing of
Terrorism regulations update can be viewed here.
Suggested Read: FATF Highlights the Gaps in New Zealand’s AML Measures