Dealers of expensive goods are at risk of being exploited by criminals to launder money. They’re among a range of businesses whose members may be affected by changes to the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act.
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If you deal in high value goods, you may need to put AML/CFT measures in place.
This will help prevent money laundering, make it easier for authorities to find out where ‘dirty’ money came from, prosecute criminals, seize illegally earned money and assets, and stop crime and terrorism.
Here’s a summary of the proposed changes.
You’ll need to comply with the AML/CFT Act if you buy or sell jewellery, precious metals, precious stones, watches, motor vehicles, boats, art or antiquities, and you:
The applicable threshold defines the value a cash transaction needs to be at or above to trigger obligations under the AML/CFT Act. This threshold has not yet been set. It will be set in regulations once the Ministry has consulted with the industry.
* cash is defined in the AML/CFT Act as including physical currency (notes and coins), but also other things like cheques and bearer bonds. A full definition is available here(external link).
If you accept or make cash* payments at or above the applicable threshold or more, you’ll have to comply from 1 August 2019.
To help you get ready, see What will I have to do to comply with the AML/CFT Act? and What help will be available?
Criminals target high value dealers to launder the proceeds of their crimes — their ‘dirty’ money — to cover their tracks and avoid detection. For example, some criminals may buy expensive goods with cash, then sell them and get ‘clean’ money for personal use or to fund more criminal activity. Others might, for example, keep expensive goods for personal use, trade them with other criminals, or take them overseas and sell them there to avoid raising ‘red flags’ in New Zealand financial institutions.
Introducing AML/CFT measures will deter criminals from using your services and help detect them if they do.
Importantly, it will also strengthen the overall AML/CFT system. It will make it harder for criminals to move cash anonymously using high value goods. Reporting by high value dealers will provide valuable information and help make it easier to detect crime.
When you deal in any of these expensive goods and accept or make a cash* payment (or a series of ‘related transactions’) at or above the applicable threshold or more, you would need to:
If a customer’s activity is suspicious, you may decide to file a suspicious activity report with the FIU. For high value dealers, this is optional. For more information on reporting to the FIU, see the information about rules for businesses that deal in high value goods at:
Businesses that deal in high value goods won’t have to do anything if they don’t accept or make cash* payments at or above the applicable threshold.
If you do have AML/CFT responsibilities, for information about potential ways to reduce compliance costs, see:
The Department of Internal Affairs will supervise high value dealers, as well as other businesses that Phase 2 of the Act applies to. It will help you comply with the law and enforce it when needed. For more information see:
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