With only a few days to go before the new anti-money laundering regime comes fully into force, the Minister of Justice released amendments to three sets of anti-money laundering and countering of terrorism (AML/CFT) regulations:
- Anti-Money Laundering and Countering of Terrorism (Definitions) Amendment Regulations 2013;
- Anti-Money Laundering and Countering of Terrorism (Exemptions) Amendment Regulations 2013;
- Anti-Money Laundering and Countering of Terrorism (Requirements and Compliance) Amendment Regulations 2013.
These regulations contain a number of minor and technical amendments to the principal regulations, but also reflect some policy changes to the regime approved by Cabinet earlier this year. Some of the key amendments include:
Enhanced customer due diligence measures to be carried out when a reporting entity suspects money laundering or terrorist financing. This applies to a transaction if a suspicious transaction report is needed for the transaction and the transaction:
- takes place outside a business relationship and is below the applicable threshold value prescribed for an occasional transaction; or
- is conducted by an existing customer (that is, a person who was in a business relationship with the reporting entity immediately before 30 June 2013);
- Clarification of the beneficial ownership exemption in relation to trust accounts so that it also applies to any account that is operated by a reporting entity or person subject to the Financial Transactions Reporting Act 1996 for the purpose of holding funds that belong to more than one client.
- Extension of simplified customer due diligence. Customers for whom simplified due diligence is sufficient now include registered banks, licensed insurers, and companies listed on overseas stock exchanges with sufficient disclosure requirements and located in a country with sufficient anti-money laundering and countering financing of terrorism systems and measures in place.
- An exemption for auctioneers and Internet auction providers from being classified as reporting entities for the purposes of the AML/CFT Act merely because they provide relevant services in the course of carrying out their respective businesses. Coverage of these sectors is to be considered at a later date.
- A limitation on the exemption for stored value instruments (that is, instruments issued to enable purchases of certain goods and services) so that the exemption does not apply to stored value instruments that are capable of being reloaded with $10,000 or more in any consecutive 12-month period or that are capable of being reloaded directly through a transfer from an account held at a financial institution that is unregulated for anti-money laundering and countering financing of terrorism purposes, or that is located in a country with insufficient anti-money laundering and countering financing of terrorism systems and measures.
Some of the key administrative changes include:
- a new prescribed form for reporting entities to use to meet annual reporting obligations;
- detailed requirements for suspicious transaction reports; and
- a new formal warning form, to be used by AML/CFT supervisor agencies to issue formal warnings under the AML/CFT Act 2009.