Source: New Zealand Government
Associate Justice Minister Nicole McKee says that small businesses will benefit from upcoming reforms to New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) laws, as the Government moves to make compliance more proportionate and practical for low-risk operators.
Associate Justice Minister Nicole McKee has announced Cabinet’s approval to draft a new Anti-Money Laundering and Countering Financing of Terrorism (Omnibus) Amendment Bill to overhaul the existing system.
Under current rules, even small businesses and professionals, such as real estate agents, face complex and time-consuming checks, often regardless of how much risk they face,” Mrs McKee says.
“This level of scrutiny is overkill for a small business dealing with law abiding New Zealanders and it’s an example of why our AML laws need to be smarter and more risk-based,” Mrs McKee says.
“These reforms will enable simplified customer due diligence (CDD) where businesses have assessed the risk of money laundering or terrorist financing to be low and have appropriate controls in place to manage risk. This will support a wide range of small businesses to reduce costs for their customers.
“For example, currently, families selling their home must undergo enhanced customer due diligence if the home is held within a family trust.
“Even when there are clear low risk indicators, such as a property being owned for over a decade and held in a non-trading trust, real estate agents are still required to collect extensive personal and legal information.
“For real estate agents, this would mean taking a common-sense approach to low-risk customers, for example only needing to verify the homeowners’ identity documents and their role as trustees, and retaining a copy of the trust deed.
“Similarly, share brokers and bookkeepers may be able to reduce the level of CDD required for low-risk customers and businesses where there are appropriate restrictions and conditions put in place, such as transaction limits.”
The Government has also directed the future AML/CFT supervisor to issue clear guidance so that businesses like bookkeepers, real estate agents, lawyers, and banks know exactly how to apply these simplified checks without fear of penalty.
“This Government is serious about targeting criminals, not clogging up legitimate businesses and everyday people with red tape.
“We’ve heard from parents who’ve been unable to set up bank accounts for their kids because they can’t prove where their child lives. We’ve heard from elderly Kiwis who, after the death of a spouse, find they can’t open an account in their own name due to a lack of documentation. That’s not a system based on risk, that’s bureaucracy getting in the way of people’s lives.”
As well as making things easier for small business, the bill will enable:
- Simplified CDD for low-risk individuals and activities such as opening children’s bank accounts and using digital wallets.
- Simplify compliance for small businesses in rural areas.
- Grant new powers to combat criminal activity, such as a $5,000 cap on payments of cash for international transfers and banning crypto ATMs.
“Since 2019, the global financial landscape has shifted dramatically, and New Zealand is overdue for a clear and modern national strategy, one that protects against organised crime, while also making compliance easier for those doing the right thing,” Mrs McKee says.
“We want New Zealand to be the safest place in the world to do business legitimately, and the hardest place for criminals to operate.
“By the time we’re finished, New Zealand will have a world-class AML/CFT regime – one that hits criminals hard, not ordinary New Zealanders.”
