The Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Amendment Act 2017 has introduced the “Phase 2” of New Zealand’s AML/CFT laws to tackle issues of money laundering and terrorist financing. These statutory changes extend the existing Act to cover more businesses and professions considered to be vulnerable to money laundering. These changes, put in place “practical measures to protect businesses and make it harder for criminals to profit from and fund illegal activity.” The amendments are meant to safeguard the financial system of New Zealand and foster a robust business environment.

How to know if the changes to the AML/CTF Act affect my business?

If your business belongs to one of the Phase 2 sectors listed below, you are affected by the “Tranche II” changes:

  • Lawyers
  • Conveyancers
  • Businesses that provide trust and company services
  • Accountants
  • Real estate agents
  • Businesses trading in high value goods (jewellery, precious stones, antiques, fine art, yachts, luxury motor vehicles and building/bathroom/kitchen supplies)
  • Sports and racing betting

Phase 1 businesses (banks, casinos, various financial service providers, and certain trust and company service providers) also need to be aware of the changes to the law.

What changes will Tranche 2 bring?

Tranche II makes it obligatory for New Zealand legal practitioners, conveyancers, accountants and real estate agents to enrol the regulated business with AUSTRAC and comply with the AML/CTF regulations by given dates:

  • Lawyers, legal firms and Conveyancers must comply by 1 July 2018;
  • Businesses that provide trust and company services must comply by 1 July 2018;
  • Accountants must comply by 1 Oct 2018;
  • Real Estate Agents must comply by 1 Jan 2019;
  • Businesses trading in high value goods (jewellery, precious stones, fine art, yachts, antiques) must comply by 1 August 2019;
  • Sports and racing betting businesses must comply by 1 August 2019.

What does this mean for my business?

The affected business will need to comply with the AML/CFT Act by maintaining

  • systems and controls for ongoing assessment of risks;
  • a process for approval of a standard AML/CTF program;
  • the designation of a person as the ‘AML/CTF Compliance Officer’;
  • customer identification and verification, including Sanctions Checks and PEP (Politically Exposed Persons) checks;
  • identify suspicious transactions;
  • report transactions and suspicious matters;
  • be aware of the Codes of Practice and Guidelines.

As the date of legal compliance approaches, lawyers, accountants and real estate agents in New Zealand must expedite the process of compliance to include Sanctions Checks, PEP Screening and Watch Lists offered by NameScan and MemberCheck, leaders in the customer due diligence landscape.