Bodies Corporate

Date Made

Date signed: 2013-10-08

Sectors

Financial Institution (general)

Enacting statement

In accordance with section 159(3) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("AML/CFT Act"), the Minister of Justice hereby gives notice that she has granted the following exemptions from the AML/CFT Act:

Ministerial Exemptions: Bodies Corporate and Body Corporate Managers

Commencement date

This exemption comes into force on 2013-10-08

End date

This exemption will expire on 2018-06-30

Exemption

As the Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("Act"), I exempt all bodies corporate, created under the Unit Titles Act 2010 ("UT Act") or created under the Unit Titles Act 1972 and continued under the UT Act, from all the provisions of the Act in relation to any relevant services provided in carrying out any management, financial, or administrative functions relating to the body corporate and the unit title development in accordance with the UT Act or the Unit Titles Regulations 2011 ("UT Regulations").

I also exempt any persons contracted or otherwise engaged by a body corporate as a body corporate manager or body corporate secretary (collectively referred to as "body corporate managers") from Part 2 of the Act in relation to any relevant services provided whilst carrying out management, financial, or administrative functions and services on behalf of a body corporate. The scope of this exemption for body corporate managers covers only those functions and services that a body corporate would otherwise provide its constituent owners in accordance with the UT Act or the UT Regulations.

 

Conditions

The exemption provided to bodies corporate in paragraph 1 is not subject to any conditions.

The exemption provided to body corporate managers in paragraph 2 is subject to the following condition:

1. 1. A body corporate manager, in carrying out any functions and services on behalf of a body corporate, must adhere to all duties and other requirements contained in the UT Act, the UT Regulations, and any other relevant legislation as if the body corporate manager was acting as the body corporate itself.

Statement of reasons

These exemptions have been made for the following reasons:

1. 1. The risks of money laundering or the financing of terrorism are low.
   2. Funds paid to bodies corporate or body corporate managers are only payable by unit owners of bodies corporate. Funds are not accepted from any other parties (unless it is clear that such parties are acting as a unit owner's agent, such as a lawyer or accountant paying on instructions from their client).
   3. Funds are payable on levies struck during a financial year or (in the case of body corporate managers) on the supply of an invoice showing levies struck by the body corporate for the financial year. The levies struck are intended to cover the costs of insurance and other outgoings for that year. If further funds are required during the year, additional levies are struck by the body corporate.
   4. Payments are made by direct credit to either the body corporate or body corporate manager. On receipt, funds are held in specific accounts as required by the UT Act.
   5. Where the amount levied is in excess of the amount required for the year's outgoings, the surplus is usually credited to a long term maintenance fund
      or offset against the next year's levies.
   6. Individual unit owners have no control or ability to move money once it is received by the body corporate or body corporate manager.
   7. There is no automatic right of withdrawal or ability to use funds once levies are paid. Any surplus at the end of the financial year is usually minimal. These amounts are not usually returned to unit owners, but retained in the manner set out above.

Contact

Any person wishing to provide comment on this notice should contact the Anti-Money Laundering and Countering Financing of Terrorism Team at the Ministry of Justice by emailing amlcft.exemptions@justice.govt.nz