Planned changes to anti-money laundering and countering financing of terrorism regulations

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An updated version of this information from December 2020 is available here: Frequently Asked Questions - Update December 2020

Frequently Asked Questions May 2020

This document sets out some questions and answers for reporting entities and stakeholders to support changes planned for the Anti-Money Laundering and Countering Financing of Terrorism (Exemptions) Regulations 2011 and the Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011.

Why are there going to be changes?

New Zealand’s anti-money laundering and countering financing of terrorism (AML/CFT) system is intended to adapt as money laundering and terrorism financing risks evolve.

Two regulations, that are a key part of the AML/CFT system, are due to expire soon. These are the AML/CFT (Exemptions) Regulations 2011 which expire on 30 June 2020, and the AML/CFT (Definitions) Regulations 2011 which partially expire on 27 July 2021.

In October 2019 the Ministry of Justice consulted on the AML/CFT Exemptions and AML/CFT Definitions Regulations. This was to identify whether each regulation is still required, and, if so, whether changes or updates are needed to be fit-for-purpose and reflect the current risk environment.

Cabinet has agreed to make changes to the AML/CFT (Exemptions) Regulations 2011 and the AML/CFT (Definitions) Regulations 2011 and to issue six new regulations.

What will change?

The changes include the removal of the expiry dates, adding some new regulations and amendments to other regulations. To make the regulations easier to navigate, there will also be a consolidation of the six current regulations into a single regulation that supports the AML/CFT Act 2009.

When will the changes come into force?

Until the new regulations come into force, you must comply with the requirements of the current regulations.

The Ministry of Justice is progressing the changes in three steps.

Step	What is covered by the step	When will it come into force
1	Remove the expiry date of 30 June 2020 from the Exemptions Regulations	The Ministry has amended the regulation to remove the expiry date and this is now in force.
2	Changes to the Exemptions Regulations and Definitions Regulations made and new regulations issued.	The Ministry aims to have new regulations in force by the end of 2020.
3	Consolidation of the existing six regulations into a single regulation	The Ministry aims to have new consolidated regulations in force by the end of 2020.

Will guidance be provided?

The AML/CFT supervisors will provide guidance where clarification of legislation is needed.

My business has an issue that isn’t addressed by these changes. What can I do?

If you are concerned that there are other issues that should be addressed, you can contact the Ministry of Justice on aml@justice.govt.nz. Please also be aware that the AML/CFT Act is due for statutory review in 2021 which provides a good opportunity for other issues to be considered.

Who was consulted in the development of the proposed changes?

The Ministry of Justice consulted with some key stakeholders and professional representative bodies in the development of the proposed changes.

Who can I contact about the planned changes to regulations?

If you have any additional questions about the planned changes, the process or timing of the changes, you can contact the Ministry of Justice directly on aml@justice.govt.nz.

The Ministry of Justice has released the documents about these decisions on their website. You can view the policy papers and decisions on the Ministry of Justice’s website at this link - policy papers

How will I know whether I need to get audits every three or four years?

Once the regulations are in force, all AML/CFT audits will be required every three years. However, the AML/CFT supervisors are able to require a more frequent, or a less frequent, audit, depending on their assessment of a reporting entity’s money laundering and terrorism financing risk.

The AML/CFT supervisors will notify you if you are required to have an audit more or less frequently than every three years.

I’m due to get an audit before the regulations come into force. What should I do?

The existing requirements apply until the new regulations are in force (anticipated to be by the end of 2020). If you have an audit due before the new regulations are in force, that audit will need to be completed according to its current timeframe.

I’m due to get an audit after the regulations come into force. When is my audit due?

If you have an audit due after the regulations come into force, your next audit is due three years from the date of your last audit, or, if you haven’t yet had an audit, you next audit is due three years from the date you became a reporting entity.