Anti-Money Laundering and Countering Financing of Terrorism Act 2009

Depending on your business area of expertise, you could be subject to extra compliance requirements that the Ministry of Justice has ruled mandatory for Phase 2 of its Anti-Money Laundering and Countering Financing of Terrorism Amendment (AML/CFT) Act.

It’s estimated that about $1.35 billion is laundered through legitimate businesses in New Zealand each year through fraud and illegal drugs.

Phase 2 extends the current 2009 Act which requires businesses such as banks, casinos and a range of financial service providers to cover a broader range of compliance requirements in business in the coming months.

Lawyers, conveyancers and trust and company service providers have all had to adhere to additional compliance requirements since 1 July.

Who’s affected?

  • From October 1, 2018, accountants were affected.
  • As of January 1, 2019, real estate agents will be included.
  • From August 1, 2019, businesses trading in high-value goods, as well as sports racing and betting businesses, will be included.

How do you comply with the AML/CFT Act if you’re a business?
Each business area will have its own expected compliance requirements from the Ministry of Justice.

For example, from October 1, 2018 accountants were required to:

  • Assign a designated AML/CFT Act compliance officer.
  • Carry out a risk assessment and document any money laundering and terrorist financing risks that their businesses could be exposed to.
  • Establish an AML/CTF Act compliance policy setting out how they will detect and manage these risks.

There are also ongoing maintenance requirements for accountants, which include among other things reporting on an annual basis to the Department of Internal Affairs.

You can read what will be expected for your business below:

  • For real estate agents, from January 1, 2019 – read more
  • Businesses trading in high-value goods, from August 1, 2019 – read more
  • Sports racing and betting businesses, from August 1, 2019 – read more

The Ministry of Justice offers suggestions about how to reduce your AML/CFT Act compliance costs as a business, including:

  • Through a network, create a designated business group.
  • Rely on another business for customer due diligence.
  • Outsource customer due diligence to a third party.

Find out more from the Ministry of Justice on reducing compliance costs here.

And if as a business or individual you have an accountant:
-You can expect your accountant to request additional proof of identity or background for transactions, even if you’re an existing client.

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