Business now has increased certainty regarding the application of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML) with the setting of the commencement date and the release of supporting regulations. 

All businesses subject to the regime will need to be compliant on and from 30 June 2013.

Many financial market participants will be just drawing breath after the implementation of the Financial Advisers Act 2008.  The compliance deadline for AML now looms large as the next big challenge not just for the finance sector, but for other sectors as well (including casinos).

Unsurprising, but the detail is important

Much of the likely content of the regulations has been known for some time but affected entities will need to work carefully through the detail and the implications for their business including:

  • the effect on their AML planning, in particular the definitions which set the parameters of how the AML will apply to “occasional transactions” and “designated business groups”, groups within which a member can rely on the due diligence of another member (which will be important for large corporates), and
  • the extent to which relevant exclusions and exemptions may alleviate some or all of the compliance burden, either generally or for certain types of transactions.

Early planning is desirable

31 June 2013 is not far off so time is of the essence.  If an exemption is needed, the key will be to apply early.  The Ministry of Justice has helpfully published a Ministerial Exemption Policy which sets out how to apply, the process that will be followed and the basis on which the application will be assessed.

A user-friendly guide to the regulations

The detail is complex so for a full understanding of the nuances, it is important to scrutinise the regulations themselves or seek advice. 

Definitions

Please click here to view table.  

Exemptions

Please click here to view table.

Next steps

Links and some further explanation are provided below.

In addition to the Commencement Order, the regulations:

  • clarify the scope of some of the provisions of the Act by defining key terms, as well as excluding and including certain entities as “reporting entities” under the AML
  • exempt (wholly or partly) certain types of transactions and certain entities from the scope of the AML
  • prescribe certain levels of customer due diligence for specific scenarios (including anonymous accounts and beneficiaries of trusts), as well as prescribing the content requirements for annual reports by reporting entities, and
  • prescribe the form in which the Minister must make Ministerial exemptions (these can be applied for any time from 28 July 2011).