Anti-Money Laundering and
Countering the Financing of Terrorism 

INDUSTRY UPDATE ON PROGRESS OF THE FATF-COMPLIANCE REVIEW (AND RELATED ANTI-MONEY LAUNDERING POLICY & LEGISLATIVE DEVELOPMENT)

The Ministry of Justice is commissioning standardised cost modelling work to identify and estimate the costs on business of AML/CFT compliance. Select industry engagement underpinning this costing exercise is scheduled to occur between mid-March and late April.

As earlier advised, Cabinet consideration of the final policy proposals from the FATF-Compliance Review has been deferred at Minister Cosgrove’s request. This is to enable compliance costs to be estimated for each of the industry groups affected by the proposals, including those groups located in the non-financial sector, such as lawyers, conveyancers, accountants, real estate agents, TABs and jewellers.

Compliance cost information gained from the financial and gaming sector industry via the targeted consultation round late last year generated considerable qualitative information that has informed policy development. Whilst recognising that reform is necessary to comply with New Zealand’s international obligations, Government remains concerned to minimise industry compliance costs and, to that end, now requires more detailed information from all affected groups concerning the likely behaviour of industry under the proposals.

Accordingly, the Ministry is commissioning standardised cost modelling work to identify and quantify the costs on business of specified AML/CFT compliance obligations. The compliance obligations to be costed will be indicative only and will be informed by any parallel obligations in Australia and the United Kingdom. Information gained during this exercise will be applied toward both cost estimation and the development of New Zealand’s regulatory framework.

This costing project has gone to tender. It will require those undertaking the work to use a standardised cost model, for instance the Australian Business Cost Calculator, and to engage directly with a sample of businesses from each of the sectors identified as being covered by the proposals.

Final policy decisions from Cabinet are anticipated in July 2008 with a view to introduction of legislation by the end of 2008.

FATF Interagency Working Group
Ministry of Justice