The Ministry of Justice is encouraging businesses affected by upcoming changes to anti-money laundering law to have their say on the proposed reforms.
The Ministry has issued a consultation document as part of the Government’s move to extend the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (external link) (AML/CFT Act) to more businesses and professions.
“We want to make sure our anti-money laundering laws are effective, while minimising the impact on businesses,” says Rajesh Chhana, Deputy Secretary Policy.
“Money laundering and terrorist financing are significant problems both here and worldwide. They allow criminals to hide the proceeds of their illegal activities and to fund serious crimes such as drug offending, organised crime, terrorism and tax evasion.”
It is hard to quantify how much ‘dirty’ money is channelled through New Zealand businesses, but it has been estimated at about $1.5 billion each year.
In 2013, Phase One of the AML/CFT Act came into effect. This placed obligations on financial institutions and casinos, and appointed government agencies to oversee and enforce the law and help businesses to comply with it. It also bolstered authorities’ ability to detect and investigate serious crimes by following the money trail that such offences generate.
In June this year, the Prime Minister announced the Government will accelerate Phase Two of the AML/CFT regime. This will extend it to many lawyers, accountants, real estate agents, conveyancers, some additional gambling service providers and some high-value goods dealers.
Dealers of high value goods that might be affected include auctioneers, bullion dealers, jewellers, precious metal and stone dealers, motor vehicle and boat dealers, antique and art dealers, second hand dealers and pawnbrokers, and other businesses that accept or provide large amounts of cash.
Under Phase Two, affected businesses will have to put AML/CFT measures in place, such as carrying out risk assessments, confirming customers’ identities so they know who they are dealing with, and reporting suspicious transactions to the Police’s Financial Intelligence Unit. There also may be minor changes to aspects of the current AML/CFT regime, which may affect sectors already subject to it, as well as Phase Two sectors.
“We know from domestic and international evidence that these sectors are at high risk of being misused by criminals,” Mr Chhana says. “Our aim is to design a regime that balances risks and benefits.
“The Ministry’s consultation seeks views on how AML/CFT compliance requirements might be implemented, taking into account respective business sectors’ structures and practices.
“The Government intends to introduce a Bill to Parliament later this year, and have it passed by July 2017. After that, businesses will need a period of time to prepare for the changes, but it’s expected the extended Act will come into force as soon as practically feasible.”
The deadline for submissions on the consultation is 5pm Friday 16 September 2016.
The consultation document and more information about New Zealand’s anti-money laundering laws are available at www.justice.govt.nz/justice-sector-policy/key-initiatives/aml-cft
For more information, contact Antony Paltridge at the Ministry of Justice on 04 9188980 or 027 6890667.