The New Zealand Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 2017, commonly referred to in compliance circles as “Phase 2” of the AML/CFT Act, passed its third reading in Parliament last night.
In short? It’s the AML/CFT Act you know (and love?) with some new additions and small changes.
Here, we talk you through what’s new, and what’s different.
First of all, if you’re in business as a lawyer, accountant, real estate agent, or a high value dealer,
you’re about to enter a whole new world. You are what we call a Phase 2 entity.
As a result of the amendment, you now have the regulatory obligations that financial service providers have had in New Zealand for the past four years. Consequently, you’re going to need to undertake a Risk Assessment Programme, appoint an AML/CFT Compliance Officer, and vet and train your staff.
Perhaps most importantly, you’re going to need to prove that you know your customer
(KYC); that you have verified their identity, assessed the level of money laundering or terrorist
financing (ML/TF) risk they pose, and verified where they get their money from.
Each industry has a different date by which they must be compliant:
- lawyers and conveyancers by no later than 1 July 2018
- accountants by no later than 1 October 2018
- real estate agents by no later than 1 January 2019
- high value dealers and the New Zealand Racing Board (which administers sports and
racing betting) by no later than 1 July 2019
What do Phase 2 entities need to do?
We’ve got you covered. We will be offering a series of AML/CFT Phase 2 Entity Webinars lined up for you. They’re free, online, and tailored to your industry. You’ll be able to ask us questions and learn how others are managing these changes. Subscribe to our eNewsletter for updates.
If you’re a Phase 1 entity and this is old hat, wake up and smell the legislation, you’ve got
some changes to make, too:
- All references to Suspicious Transaction Reports (STRs) are now to be changed to
Suspicious Activity Reports (SARS). The Police Financial Intelligence Unit (FIU) have
been concerned that important information is not being reported to them because it’s not
directly related to a transaction. Especially relevant to you is that you ensure you’re reporting anything you deem to be suspicious in the course of offering your products and services, even if it relates to someone who isn’t even your customer.
- Updates to Sector Risk Assessments (SRA). The Reserve Bank of New Zealand (RBNZ)
released their updated SRA in April, the Financial Market Authority (FMA) updated theirs
in June, and we’re expecting the Department of Internal Affairs (DIA) update any minute.
It’s a requirement of the AML/CFT Act that your risk assessments and programmes
analyse the ways in which your business are exposed to the discussion and guidance in
these SRAs – update your documents if you haven’t already.
- The supervisors have told us that they intend on issuing guidance, training, and holding
information seminars to educate the Phase 2 entities, and clarify their expectations for
Phase 1 entities. It’s important you stay up to date with information and guidance issued
by the supervisors so that you’re sure your policies, procedures, and controls are
meeting their expectations.
How is a Phase 1 entity expected to keep up with all this? We’ve got your back.
Sign up to the Fiducia AML/CFT eNewsletter which will mean you’ll know everything that’s relevant to you and your business as soon as it happens.