AML/CFT guidance on territorial scope and supervisory framework updated
The three bodies supervising implementation of the Anti-Money Laundering and Countering Funding of Terrorism Act 2009 in New Zealand have released updates to two pieces of guidance.
The supervisors are the Financial Markets Authority, Reserve Bank of New Zealand and Department of Internal Affairs.
The Territorial Scope of the AML/CFT Act 2009 guideline aims to help reporting entities understand the territorial scope of the AML/CFT Act and assist them to determine whether they have obligations under the Act.
The guideline states that it is provided for information only and cannot be relied on as evidence of complying with the AML/CFT Act requirements.
It says the following applies when determining whether a person is a reporting entity for the purposes of the Act:
- A legal person incorporated or formed in New Zealand, which, in the ordinary course of business, carries on one or more activities in New Zealand will be a “reporting entity” under the AML/CFT Act. This also applies to a natural person, such as a solicitor or accountant practising on their own account in sole practice, who in the ordinary course of business, carries on one or more activities in New Zealand.
- A legal person incorporated or formed in New Zealand (or a natural person, such as a solicitor or accountant practising on their own account in sole practice) which, in the ordinary course of business, carries on activities wholly outside New Zealand will not be a “reporting entity” under the AML/CFT Act. However, an activity is not provided wholly outside New Zealand solely because the relevant service to which the activity relates is only provided to overseas persons. For example, a law firm, accounting practice or TCSP in New Zealand that acts as a formation agent or arranges nominees or trustees, in respect of New Zealand companies or New Zealand-based legal arrangements is providing that activity in New Zealand, even if the service is only provided to overseas persons.
- An overseas person carrying on business in New Zealand and engaged in one or more of the activities listed in the AML/CFT Act in New Zealand will be a “reporting entity” under the AML/CFT Act.
- An overseas person that is not carrying on business in New Zealand is unlikely to be a “reporting entity” under the AML/CFT Act.
The AML/CFT Supervisory Framework guideline sets out the AML/CFT framework and outlines the shared objectives, functions, powers and guiding principles of the three AML/CFT supervisors and the compliance tools and techniques available to them.
The guideline says the shared objectives are drawn from the purposes of the Act. These are:
- To detect and deter money laundering and the financing of terrorism.
- To contribute to public confidence in the financial system.
- To facilitate co-operation among reporting entities, supervisors and various government agencies, particularly law enforcement and regulatory agencies.
- To maintain and enhance New Zealand's international reputation.
Last updated on the 27th November 2019