Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Amendment Notice 2015

2015/168

Coat of Arms of New Zealand

Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Amendment Notice 2015

Pursuant to section 157(1) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, the Minister of Justice gives the following notice,—

(a)

having had regard to the matters specified in section 157(3) of that Act; and

(b)

having consulted in accordance with section 158 of that Act.

Notice

1 Title

This notice is the Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Amendment Notice 2015.

2 Commencement

This notice comes into force on the day after the date of its notification in the Gazette.

3 Principal notice
4 Schedule amended

In the Schedule, after Part 2, insert the Part 3 set out in the Schedule of this notice.

Schedule

cl 4

Part 3 PAYE intermediaries

1

As the Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt all PAYE intermediaries, only with respect to authorised transactions, from the following provisions of the Act:

(a)

sections 11 to 39:

(b)

sections 49 to 71:

(c)

sections 106 to 163.

2

In this exemption,—

authorised transactions means any transaction that satisfies the requirements of section RP 2(2), RP 6, RP 14, RP 15 or RP 16 of the Income Tax Act 2007 or that fulfils the obligations of a PAYE intermediary under any of those provisions

PAYE intermediary means a person who is approved as a PAYE intermediary under section 15D of the Tax Administration Act 1994 (and includes a PAYE intermediary who is approved as a listed PAYE intermediary under section 15G of that Act).

3

This exemption is subject to the following conditions:

(a)

the exemption applies only to transfers between New Zealand bank accounts and does not extend to any transfer from or to a foreign bank account:

(b)

to be eligible for the exemption, a PAYE intermediary must not use or provide any payroll remittance card in the course of its authorised activities.

4

This exemption has been made for the following reasons:

(a)

the risk of money laundering or terrorist financing through the authorised transactions conducted by PAYE intermediaries is very low because—

(i)

PAYE intermediaries must be registered with the Inland Revenue Department:

(ii)

PAYE intermediaries are regulated by requirements under the Income Tax Act 2007 and the Tax Administration Act 1994:

(iii)

PAYE intermediaries rely on information provided by the Inland Revenue Department in relation to employees:

(iv)

wire transfers are repetitive, are periodic, and go repeatedly through the same financial institutions:

(v)

PAYE intermediaries must provide an employer schedule to the Inland Revenue Commissioner on a monthly basis:

(vi)

PAYE intermediaries must submit IR348 reports, which include information identifying all parties to any wire transfer:

(vii)

the tasks performed by PAYE intermediaries in the manipulation and transfer of funds are limited to the deduction and transfer of income tax and other specific deductions:

(viii)

any risks present within the authorised transactions conducted by PAYE intermediaries are dealt with by the conditions of the exemption:

(b)

any benefits of requiring compliance with the Act are not justified given the associated costs, due to the very low money laundering and terrorism financing risks raised by the authorised transactions conducted by PAYE intermediaries and the significant compliance costs that would arise from not granting the exemption.

5

This exemption comes into force on the day after the date of its notification in the Gazette.

6

This exemption expires on 30 June 2018.

Dated at Wellington this 21st day of June 2015.

Simon Bridges,
for Minister of Justice.

Explanatory note

This note is not part of the notice, but is intended to indicate its general effect.

This notice, which comes into force on the day after the date of its notification in the Gazette, amends the Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Notice 2014 (the principal notice). The amendment inserts in the Schedule of the principal notice new Part 3, which provides an exemption from most of the provisions of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 for PAYE intermediaries conducting authorised transactions under the Income Tax Act 2007.

New Part 3 expires on 30 June 2018 and, under clause 4(2) of the principal notice, is revoked on that date.

Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 2 July 2015.

This notice is administered by the Ministry of Justice.