Compliance Guidelines:

Regulatory Bodies in New Zealand

In New Zealand, the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act 2009) is supervised and enforced by three regulatory bodies. The specific regulatory body depends on the type of institution or entity being supervised. These bodies are:

• The Department of Internal Affairs (DIA): The DIA is responsible for a wide range of entities such as casinos, non-bank credit card providers, money remitters, trust and company service providers, and several other non-financial businesses and professions.
• The Financial Markets Authority (FMA): The FMA supervises issuers of securities, licensed supervisors, fund managers, brokers and custodians, financial advisers, derivatives issuers and dealers, peer-to-peer lending and equity crowdfunding service providers, and managed investment schemes.
• The Reserve Bank of New Zealand (RBNZ): The RBNZ supervises registered banks, life insurers, and non-bank deposit takers.

Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act 2009)

Risk Assessment

• Requirement to conduct risk assessment: Reporting entities are mandated to assess the nature and level of risk they face in terms of money laundering and terrorism financing. This involves an analysis of their customers, delivery channels, and the regions in which they operate.
• Risk assessment guidelines: Offers specifics on how assessments must be conducted and documented. This includes considering the types of products, delivery methods, and the types of customers they deal with.

Customer Due Diligence (CDD)

• CDD requirements: Sets out when and how businesses must conduct due diligence on their customers.
• Levels of CDD: Distinguishes between standard, simplified, and enhanced CDD, each catering to different levels of identified risks.
• Reliance on third parties for CDD: Specifies conditions where businesses can rely on third parties to conduct CDD.
• Existing customers: Guidelines on when and how to conduct CDD on customers that have pre-existing relationships with the business.

Account Monitoring and Suspicious Transaction Reporting

• Account monitoring: Mandates regular monitoring of customer accounts and transactions to detect unusual or suspicious activity.
• Reporting obligations: Outlines the duty of entities to report any suspicious transactions to the Financial Intelligence Unit (FIU) without delay.
• Tipping-off offenses: Establishes that businesses cannot inform customers that they have been reported for suspicious activities.

Record Keeping

• Record-keeping requirements: Dictates what kind of transaction and identity records entities must maintain, and in what format.
• Duration: Records typically must be kept for a minimum of five years.

AML/CFT Supervisors

• Supervisor roles: Designates specific roles for the Reserve Bank of New Zealand (RBNZ), the Financial Markets Authority (FMA), and the Department of Internal Affairs (DIA) in supervising and enforcing the AML/CFT regime.
• Powers of supervisors: Enumerates powers like conducting audits, issuing directives, and gathering information from entities.
• Information sharing: Establishes protocols for supervisors to share vital information among themselves and with the FIU.

References:

1. The Parliament of New Zealand