The Department of Internal Affairs

Te Tari Taiwhenua | Department of Internal Affairs

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Use of third-party bank accounts by money remitters

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16 August 2023

Te Tari Taiwhenua Department of Internal Affairs (DIA) is the supervisor of money remitters under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act).

Since the AML/CFT Act came into effect many money remitters in New Zealand have experienced difficulties opening, or maintaining, bank accounts to enable them to transact their money remittance services. This is also consistent with the experience of the money remittance sector in various overseas jurisdictions.

As a result, some money remitters in New Zealand have been conducting their business through bank accounts obtained, or operated, without advising the bank that the account will be, or is being, used to transact a money remittance service.  This includes accounts opened in the names of the owner, or family members, or other associated persons or companies.  Accounts used by money remitters in this way are commonly referred to as “third-party accounts”.

While DIA is aware that some money remitters are using third-party accounts to deliver their money remittance service, the DIA does not endorse this practice. If false, misleading or deceptive information is provided in the course of establishing or controlling the bank account, you may be committing an offence. If you are a money remitter using or intending to use third-party accounts, you are also reminded that:

  • Your use of third-party accounts must be fully compliant with the AML/CFT Act, including:

-          assessing the use of third-party accounts in your risk assessment; and

-          ensuring that all associated ML/TF risks are managed and mitigated.

  • Third-party account holders must themselves comply with any requirements under the AML/CFT Act. Specifically:

-          if the activities of the third-party account holder mean it is a reporting entity under the AML/CFT Act, it is required to maintain its own risk assessment and AML/CFT programme; and

-          it is not sufficient to rely on the AML/CFT programme of the money remitter that is using its account, or to defer all AML/CFT compliance responsibility and requirements to that money remitter.

 

Disclaimer: This guidance has been produced by the Department of Internal Affairs for money remitters under s132(2)(c) of the AML/CFT Act. It does not set out the comprehensive obligations under the AML/CFT Act and associated regulations and does not constitute legal advice.