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Timeline to New Zealand's AML Amendments

In June 2023, New Zealand’s Ministry of Justice updated its webpage with important changes to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act). These changes, known as the Amendment Regulations, have been long-awaited and are now official. Additionally, certain parts of the Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Notice 2018, which were set to expire, have been extended. 

Why do the Amendments Matter? 

The Amendment Regulations bring significant changes to the AML/CFT regime, the most substantial since the incorporation of Phase 2 entities. It's crucial for the following groups to carefully review these changes: 

  • Existing reporting entities under the AML/CFT Act: They need to understand how these changes affect their treatment under the AML/CFT regime. 
  • Service providers dealing with virtual assets and entities relying on online auctions exemption: These entities may now come under the AML/CFT regime and need to be aware of the implications. 
  • Individuals interested in financial inclusion and innovation in the financial sector: The application of the AML/CFT regime has far-reaching consequences in these areas, so it's important for them to stay informed. 

All reporting entities, both current and prospective, should be aware of these changes to ensure they remain compliant with the AML/CFT regime, as non-compliance can have significant consequences

What do these changes cover? 

The Amendment Regulations introduce various changes to the AML/CFT regime, which can be divided into three stages: 

  • Immediate regulatory relief (starting July 31, 2023): These changes include adjustments to the definition of beneficial owner, the classification of virtual asset service providers, and clarifications on stored value instruments, among others. 
  • New obligations for existing reporting entities (starting June 1, 2024): These changes involve declarations regarding virtual asset transfers, expanded customer due diligence requirements, enhanced compliance program details, and more. 
  • Extending the coverage of the regime (starting June 1, 2025): These changes encompass requirements related to customer risk assessment and the replacement of the online auctions' exemption. 

For the complete details, you can refer to the specific Regulations

Additionally, the Class Exemptions Notice, which came into effect on June 30, 2023, extends various class exemptions and introduces a phase-out period for certain managing intermediary exemptions. 

Some proposed changes have been removed, and others have been delayed due to the need for legislative changes rather than regulatory ones. 

In summary, these changes are substantial and will require reporting entities to update their compliance documents and practices. It's advisable for affected entities to identify the impact on their operations promptly and prepare for the necessary adjustments. 

Looking ahead, the Ministry of Justice is planning further reforms to the AML/CFT regime, including operational changes, regulatory amendments, and revisions to the AML/CFT Act itself. Affected entities should stay informed and be prepared for these upcoming changes. 

How SaaS Solves for Complex Regulation   

A software as a service (SaaS) ecosystem like Fenergo is a game-changer in navigating the complex regulatory landscape outlined in the recent amendments. SaaS tools streamline compliance for reporting entities under the Anti-Money Laundering and Countering Financing of Terrorism Act because it provides a complete view of the entity in one location.  

It offers a centralized hub for managing client data, due diligence, and regulatory reporting. With real-time updates and automated compliance checks, it ensures that businesses can effortlessly adapt to evolving AML/CFT requirements.  

This technology reduces manual errors, minimizes the risk of non-compliance penalties, and enhances the efficiency of client onboarding and monitoring. In an era of regulatory scrutiny, a cloud-based customer onboarding tool becomes an indispensable asset for staying ahead of compliance challenges. 

Read more about adapting to regulatory change through customer insights here.

About the Author

Rory Doyle, Head of Financial Crime Policy, joined Fenergo in 2017 and brings with him a wealth of subject matter expertise surrounding financial services, hedge funds, anti-money laundering, and financial crime regulations. Rory is also qualified with ACAMS as a Certified Anti-Money Laundering Specialist (CAMS). Additionally, Rory has extensive experience in the financial, legal, and compliance sectors from the likes of Merrill Lynch, Brown Brothers Harriman, and J.P. Morgan.

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