The Ministry of Justice is conducting a statutory review of the 2013 Law on Combating Money Laundering and the Financing of Terrorism (Act) to consider:
- its performance since its introduction in 2013;
- and what should change.
The ministry aims to complete this review by the end of June 2022 and provide a report to the minister.
A summary document was released by the ministry for comment. The scope of the statutory review of the Law and its impact on the fight against money laundering and the financing of terrorism (AML / CFT) is large and far-reaching, with the main areas of intervention, including:
- Institutional arrangements and management: The ministry will review the fundamentals of the Act, including what it aims to achieve, its risk-based approach to the preparation of regulations and the structure of the plan. It will also examine whether the right agencies and the right people are involved and whether they have been given the powers they need to carry out their work.
- Scope of the law: This involves a review of who should have AML / CFT obligations, including clarifying when international companies have obligations under the law.
- Supervision, regulation and enforcement: The ministry will review how companies are currently supervised to ensure that they comply with their AML / CFT obligations. He will see if the offenses and penalties provided by law are still appropriate. In particular, the ministry would like to determine whether sanctions are appropriate for employees, senior executives and company directors to ensure that the people who actually make the decisions in a company can be held accountable.
- Preventive measures: This section of the review will examine whether measures currently required by law for businesses to take (for example, customer due diligence checks) effectively protect businesses against the harm associated with money laundering and the financing of terrorism.
- Other issues or topics and minor changes: The ministry will examine other issues such as the use of technology, including digital identity services, privacy and protection of information and how to harmonize New Zealand’s AML / CFT regime with that of Australia.
Underlying the above, the ministry recognizes that while anti-money laundering laws are important, they can sometimes make things too difficult for people and businesses. This indicates that the ministry’s review will seek to balance a comprehensive and robust AML / CFT regime against the identified risks while allowing individuals and businesses to operate without disproportionate compliance obligations.
The public consultation ends on December 3, 2021 (via an online survey or an email submission). There will be further targeted consultations with the private sector and communities from February 2022 to April 2022, with the review ending by June 30, 2022.