Law firms’ responsibilities as reporting entities under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 have been under the spotlight recently. The Department of Internal Affairs issued formal warnings to six firms for audit-related non-compliance in June, and two Anti-Money Laundering reform bills have come into force over the past few weeks. 

The legislative changes have been made following review of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) regime by the Financial Action Task Force in 2019-2021 and a statutory review of the Act in 2022. They follow other amendments made in November 2025 through the Statutes Amendment Act 2025. 

The stated intention behind the changes brought with these two Acts is to clarify existing obligations to provide more certainty, strengthen enforcement provisions, and provide relief for businesses and reduce compliance costs. 

Anti-Money Laundering and Countering Financing of Terrorism Amendment Act 2026 

This Act came into force on 19 May, with changes that intend to make the AML regime more risk-based, efficient, and effective at addressing organised crime. 

Some key changes relevant to law firm reporting entities 

Definition changes in section 5(1) 

• Amending the definition of “beneficial owner” to include a person with “ultimate ownership or control of the customer” and exclude “customers of a customer” unless they have ultimate ownership or control of the customer 
• Amending the definition of “designated non-financial business or profession” by replacing the terms “engaging in or giving instructions” with “carrying out, preparing to carry out, or giving instructions”. This amendment alters the scope of lawyers’ activities that are captured by the AML/CFT regime. Further guidance is expected from the Department of Internal Affairs (DIA). 

CDD for trusts 

Providing that reporting entities are not required to conduct certain identity verification requirements in respect of customers or persons who are trusts, if satisfied that any risks have been mitigated by conducting standard due diligence under sections 15 and 16, and enhanced customer due diligence under sections 23 and 25. 

Compliance officer 

Clarifying and providing flexibility for the requirements for compliance officers in section 56, so that they must be senior managers or report to senior managers and must be natural persons. 

Risk assessments 

Require that a reporting entity’s risk assessment incorporate all relevant risks that are identified by any risk assessments issued by DIA or the Financial Intelligence Unit. 

Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Act 2026 

This Act provides for the transition to a single supervisor (DIA) of the AML/CFT regime, replacing the existing three supervisors – the Reserve Bank, Financial Markets Authority, and DIA. New section 131 of the Act also amends the powers and functions of DIA as the sole supervisor. 

New section 155A of the Act also enables a levy to be imposed on reporting entities, the purpose of which is to support a flexible and coordinated system that will deliver sector benefits. Details of the industry levy are not yet confirmed. An AML/CFT National Strategy and work programme will be introduced as part of the funding model. The Law Society has previously submitted on the levy consultation proposal, most recently the design of the levy and how it will be calculated. We will keep the profession updated as this work progresses. 

New sections 80A and 80B also introduce a new censure regime, in addition to existing enforcement mechanisms of formal warnings, enforceable undertakings, injunctions, and pecuniary penalties. 

This Act came into force on 1 July 2026. However, the levy will not apply immediately. 

Further changes may be coming 

Reporting entities will need to review these new amendments to ensure their due diligence, verification and other AML/CFT processes comply. 

DIA has launched the AML/CFT Regulatory Strategy 2026-30 and will update guidance on their website to reflect changes from these Acts. 

Further changes to the AML/CFT regime and the regulatory settings have also been signalled, with the Government noting its intention to introduce a further Bill amending the AML/CFT Act into the House in the current parliamentary term. 

More information 

See Anti-Money Laundering and Countering Financing of Terrorism on the Department of Internal Affairs website. 

See the Law Society’s law reform submissions.