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Extension to anti-money laundering laws introduced

14 March 2017

A bill that would bring lawyers and other professions into the anti-money laundering and countering terrorism regime has been introduced to Parliament.

The Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill will amend the 2009 Act to extend the obligations to Phase II entities, which are lawyers, real estate agents, accountants, conveyancers, the Racing Board, and some high-value dealers who deal in items such as motor vehicles, jewellery and art.

Under the bill these sectors will be required to know who their customers are, and on whose behalf they act in any high-risk activity.

Lawyers will be required to report large cash transactions, and will also be required to report suspicious activity, and develop and maintain a risk assessment and compliance programme.

The bill establishes the Department of Internal Affairs as the relevant supervisor for the Phase II entities. It follows an exposure draft which was released for public comment at the end of 2016.

The Ministry of Justice disclosure statement brings together information on the policy development of the bill. It states that the ministry has undertaken a cost benefit analysis “which will be made available in due course”.

The ministry produced a regulatory impact statement on 2 March 2017 to help inform the main policy decisions taken by the Government relating to the contents of the bill.

Justice Minister Amy Adams says the bill will bolster New Zealand’s existing anti-money laundering laws, which help protect businesses and make it harder for criminals to profit from and fund illegal activities.

“This puts in place the second phase of the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT), which we fast-tracked work on last year,” says Ms Adams.

“Money laundering allows criminals to fund their lifestyle and it fuels re-investment in criminal ventures. Extending the law will improve our ability to prevent, detect and prosecute many types of criminal activity and help protect New Zealand’s reputation as a good place to do business.”

Ms Adams says the bill strikes the right balance between combating crime, minimising the cost of compliance and meeting international obligations.

“Over the past several months, we have worked with affected sectors to better understand how the changes will impact their businesses and refined options to help them meet their obligations.”

Businesses will have a period of time to prepare for the changes. The Government says it will provide guidance and information to help businesses understand, prepare for and comply with the law.

The New Zealand Law Society’s law reform committees will examine the bill and make a submission to the select committee.

But in its response on the exposure draft of the bill, in February, the Law Society said the proposed introduction date of 1 January 2018 was much too early, and recommended a lead-in period for Phase 2 of at least two years instead.

Last updated on the 16th September 2019