Government Eases Compliance Burdens with Amendments to AML/CFT Act

Streamlined Regulations Aim to Support Businesses, Tackle Organised Crime, and Enhance Efficiency.

The New Zealand Government has introduced regulatory relief for businesses by amending the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act. Associate Justice Minister Nicole McKee announced the changes, designed to reduce compliance burdens while strengthening the fight against organised crime and aligning with international standards. Key Amendments to the AML/CFT Act

The newly introduced Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill includes 26 significant changes to the current framework:

Relaxed Due Diligence for Low-Risk Customers: Enhanced Customer Due Diligence (CDD) requirements for low-risk customers, including trusts and other personal asset vehicles, will be simplified.

Clarified Definitions: The definition of trust and company service providers has been revised to prevent businesses from being doubly regulated under overlapping definitions.

Risk-Based Approach to Foreign Politically Exposed Persons (PEPs): Obligations for identifying foreign PEPs will now depend on risk levels, enabling businesses to adopt a more targeted approach.

Clearer Obligations for Businesses: The amendments streamline the interpretation of obligations under the Act to improve consistency and compliance.

Immediate Impact on Businesses

“These changes will ensure that obligations align with actual risks, improving the efficiency, effectiveness, and consistency of the AML/CFT regime,” said Ms. McKee. “They will also help AML/CFT agencies function better and reduce unnecessary compliance costs for businesses.”

Exemptions to Ease Compliance

The Government is also prioritising exemptions to further support businesses:

• Ministerial Exemptions: Six exemptions have recently been approved, reducing compliance costs for businesses with minimal money laundering risks.
• Class Exemptions Renewal: The renewal of the Anti-Money Laundering and Countering Financing of Terrorism Class Exemptions Notice, effective from December 31, 2024, will minimise duplication and compliance burdens for businesses operating in complex chains of intermediaries.

A Broader Strategy for AML/CFT Improvements

The amendments are part of a larger work programme aimed at improving New Zealand’s AML/CFT regime. Key initiatives include:

• Tackling Organised Crime: Strengthened regulations will help combat money laundering and terrorism financing tied to criminal organisations.
• Improved Compliance with International Standards: Updates ensure New Zealand meets global benchmarks while tailoring obligations to local needs.
• Long-Term Changes: Work is underway to adjust the AML/CFT supervisory model, revise levy structures, and implement broader regulatory reforms to future-proof the regime.

“These changes are just the beginning of a broader effort to create a more balanced, effective, and business-friendly AML/CFT system,” Ms. McKee added. “We are committed to reducing unnecessary burdens while keeping New Zealand safe and compliant on the global stage.”

Next Steps

Businesses are encouraged to review the new amendments and exemptions to understand how they will benefit from the streamlined regulatory approach. Further updates on the Ministry of Justice’s long-term plans will follow in 2024.