This note is not part of the regulations, but is intended to indicate their general effect.
These regulations come into force on 1 January 1998. They relate to the definition of facility in the Financial Transactions Reporting Act 1996 and clarify the position of overseas pensioners' special bank accounts.
Under section 2 of the principal Act, a facility is defined as an account or arrangement—
According to this definition, overseas pensioners' special bank accounts that are opened, administered, and operated under the Social Security (Alternative Arrangement for Overseas Pensions) Regulations 1996 are facilities. These special bank accounts are used in the offsetting of overseas pensions against New Zealand social security benefits where an overseas pensioner has entered into an alternative arrangement with the Director-General of Social Welfare.
These regulations deem overseas pensioners' special bank accounts not to be facilities for the purposes of the principal Act. The practical effect of the regulations is to exempt banks from the customer verification requirements of the principal Act. A bank does not have face to face dealings with a pensioner under an alternative arrangement, and an overseas pensioner's special bank account can be operated only in very limited circumstances. The Director-General of Social Welfare will have verified the identity of the overseas pensioner, and it is considered onerous to apply the verification requirements on banks.