Govt Welcomes New International Standards to Simplify Anti-Money Laundering Measures

Minister Nicole McKee Announces Plans to Streamline AML/CFT Regulations While Strengthening Efforts Against Organised Crime.

The New Zealand government has welcomed recent changes to international anti-money laundering (AML) standards, which will enable a more balanced approach to financial regulations by easing compliance burdens on low-risk businesses while maintaining a strong focus on combatting organised crime.

Associate Justice Minister Nicole McKee expressed strong support for the Financial Action Taskforce’s (FATF) newly revised standards, which now allow for simplified regulatory measures for sectors and organisations deemed to pose a lower risk of money laundering and terrorist financing.

“This Government is committed to upholding its international obligations in the fight against money laundering and financial crime. However, we must ensure our anti-money laundering and countering financing of terrorism (AML/CFT) framework does not impose unnecessary regulatory barriers on businesses, community organisations, and individuals who present minimal risk,” Mrs McKee said.

Addressing an Overburdened System

For years, New Zealand businesses, charities, and individuals have faced challenges navigating the AML/CFT regime. Stringent regulations have inadvertently caused difficulties for groups that were never the intended targets of these rules.

“We’ve heard countless stories of people struggling to access financial services—children, elderly citizens, the disabled, and unhoused individuals facing unnecessary obstacles in obtaining bank accounts. Community groups have been subjected to excessive scrutiny, and businesses have been pushed to the brink due to inflexible regulatory requirements,” McKee explained.

Acknowledging these challenges, the government took a leadership role in advocating for practical reforms at FATF, promoting changes that reflect a more nuanced, risk-based approach.

“That is why we pushed for these amendments on the international stage, and I am pleased that FATF members have aligned with us in recognising the need for a more common-sense regulatory approach,” McKee noted. “Our AML/CFT reform programme will implement these new standards, ensuring that low-risk activities and entities benefit from streamlined processes.”

Risk-Based Approach to Compliance

The FATF’s revised standards encourage countries to adopt a risk-based approach rather than applying blanket regulations across all sectors. This means that compliance measures will now better reflect the actual risk level posed by a particular business or activity.

“These updates are consistent with FATF’s guidance that AML/CFT rules should not only tackle money laundering risks but also avoid unnecessarily restricting access to essential financial services,” said McKee. “Our priority should be cracking down on fraudsters and organised criminals who inflict real harm on our communities, not wasting time and resources investigating everyday New Zealanders and community groups with no links to illicit activity.”

New Zealand’s experiences in addressing financial barriers faced by its Pasifika communities have played a crucial role in influencing these global changes. Many Pasifika individuals and families rely on remittance services to send money back to their home countries, but strict AML/CFT compliance measures have often made this process costly and difficult.

“Our advocacy at FATF was shaped by our efforts to address the challenges Pacific communities face when sending remittances abroad. The FATF has listened to our concerns and incorporated these lessons into their updated standards,” McKee said.

A Comprehensive Reform Programme

The Government’s broader AML/CFT reform agenda aims to refine the regulatory framework to be more effective and efficient, reducing unnecessary compliance burdens while ensuring robust protections remain in place against financial crime. These reforms are expected to deliver regulatory relief to businesses and non-profit organisations while enhancing New Zealand’s adherence to international best practices.

“The changes we are implementing form part of a wider package of reforms designed to strengthen our AML/CFT framework, improve efficiency, and ensure businesses and agencies can focus on practical actions that keep criminals out of our financial system,” McKee stated.

The Minister emphasised the government’s commitment to building smarter, more efficient regulatory structures that support risk-based settings and empower businesses to focus on genuine threats rather than excessive bureaucratic hurdles.

“By taking a more targeted approach, we can ensure our regulatory efforts are directed where they are truly needed—on stopping financial criminals—rather than imposing needless obstacles on legitimate businesses and individuals,” she concluded.

Looking Ahead

The implementation of the FATF’s revised standards marks a significant step forward in ensuring New Zealand’s AML/CFT framework remains robust yet flexible.

Over the coming months, the Government will be working closely with industry stakeholders, financial institutions, and community organisations to refine policy settings and roll out the necessary regulatory changes. The reforms are expected to create a more proportional and effective AML/CFT regime that balances international compliance requirements with the realities of New Zealand’s financial ecosystem.

As the Government moves forward with these initiatives, it remains steadfast in its commitment to tackling organised crime while protecting the financial access and rights of ordinary New Zealanders. With these reforms, New Zealand is set to maintain its global standing as a leader in effective yet practical financial crime prevention.