With the implementation date of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the AML/CFT Act) less than three months away, many reporting entities are fine-tuning their AML compliance programmes in anticipation of 'going live' on 30 June 2013.
In response to feedback from reporting entities and other stakeholders, the Ministry of Justice, in consultation with the three AML/CFT Act supervisors (the Financial Markets Authority, the Department of Internal Affairs and the Reserve Bank of New Zealand) recently announced the contents of a set of regulations to be passed into law prior to 30 June 2013. These regulations will address a number of technical issues that reporting entities have encountered while devising their AML/CFT compliance programmes. The regulations will, among other things, prescribe the form of annual reports and suspicious transaction reports and require reporting entities to conduct 'enhanced' customer due diligence where there is a suspicion of money laundering (even when the transaction in question falls below the prescribed threshold which would otherwise need to be satisfied for enhanced customer due diligence to apply).
The regulations will also amend the rules regarding an AML/CFT compliance officer across a designated business group (DBG). Currently, the AML/CFT Act requires all members of a DBG to each appoint their own AML/CFT compliance officer. This requirement arguably undermines the purpose of the DBG provisions, which are intended to simplify compliance for financial institutions whose businesses consist of multiple reporting entities within the same corporate group. In reality, each member of a DBG would likely appoint the same person to be its compliance officer, who would likely replicate the same compliance functions across each reporting entity. The regulations will enable one individual to be appointed as the AML/CFT compliance officer for an entire DBG. This is a welcome move that better aligns the mechanics of the legislation with the stated purpose of reducing the compliance burden of the AML/CFT Act in appropriate circumstances.
As the implementation date approaches, we are seeing an increased focus by reporting entities on translating the general principles of their AML/CFT programme into their business procedures. Please contact our financial services team or your usual Buddle Findlay adviser for assistance with any aspect of your AML/CFT programme.