Anti-Money Laundering and Countering Financing of Terrorism Amendment Act 2017

  • Corrections have been made to Schedule 1 on 14 August 2017 under section 25(1)(j)(iii) of the Legislation Act 2012.
5 Section 5 amended (Interpretation)

(1)

In section 5, insert in their appropriate alphabetical order:

accounting practice means—

(a)

an accountant in public practice on his or her own account in sole practice:

(b)

in relation to 2 or more accountants in public practice, and practising in partnership, the partnership:

(c)

an incorporated accounting practice

approved entity means an entity—

(a)

that is prescribed by regulations as an approved entity; or

(b)

that comes within a class of entities prescribed by regulations as a class of approved entities

conveyancing practitioner has the meaning given to it by section 6 of the Lawyers and Conveyancers Act 2006

designated non-financial business or profession means—

(a)

a law firm, a conveyancing practitioner, an incorporated conveyancing firm, an accounting practice, a real estate agent, or a trust and company service provider, who, in the ordinary course of business, carries out 1 or more of the following activities:

(i)

acting as a formation agent of legal persons or legal arrangements:

(ii)

acting as, or arranging for a person to act as, a nominee director or nominee shareholder or trustee in relation to legal persons or legal arrangements:

(iii)

providing a registered office or a business address, a correspondence address, or an administrative address for a company, or a partnership, or for any other legal person or arrangement, unless the office or address is provided solely as an ancillary service to the provision of other services (being services that do not constitute an activity listed in this subparagraph or subparagraphs (i), (ii), and (iv) to (vi)):

(iv)

managing client funds (other than sums paid as fees for professional services), accounts, securities, or other assets:

(v)

providing real estate agency work (within the meaning of section 4(1) of the Real Estate Agents Act 2008) to effect a transaction (within the meaning of section 4(1) of the Real Estate Agents Act 2008):

(vi)

engaging in or giving instructions on behalf of a customer to another person for—

(A)

any conveyancing (within the meaning of section 6 of the Lawyers and Conveyancers Act 2006) to effect a transaction (within the meaning of section 4(1) of the Real Estate Agents Act 2008), namely,—

  • the sale, the purchase, or any other disposal or acquisition of a freehold estate or interest in land:

  • the grant, sale, or purchase or any other disposal or acquisition of a leasehold estate or interest in land (other than a tenancy to which the Residential Tenancies Act 1986 applies):

  • the grant, sale, or purchase or any other disposal or acquisition of a licence that is registrable under the Land Transfer Act 1952:

  • the grant, sale, or purchase or any other disposal or acquisition of an occupation right agreement within the meaning of section 5 of the Retirement Villages Act 2003:

(B)

a transaction (within the meaning of section 4(1) of the Real Estate Agents Act 2008); or

(C)

the transfer of a beneficial interest in land or other real property; or

(D)

a transaction on behalf of any person in relation to the buying, transferring, or selling of a business or legal person (for example, a company) and any other legal arrangement; or

(E)

a transaction on behalf of a customer in relation to creating, operating, and managing a legal person (for example, a company) and any other legal arrangement; and

(b)

includes a person or class of persons declared by regulations to be a designated non-financial business or profession for the purposes of this Act; but

(c)

excludes a person or class of persons declared by regulations not to be a designated non-financial business or profession for the purposes of this Act

high-value dealer

(a)

means a person who is in trade and in the ordinary course of business, buys or sells all or any of the following articles by way of a cash transaction or a series of related cash transactions, if the total value of that transaction or those transactions is equal to or above the applicable threshold value:

(i)

jewellery:

(ii)

watches:

(iii)

gold, silver, or other precious metals:

(iv)

diamonds, sapphires, or other precious stones:

(v)

paintings:

(vi)

prints:

(vii)

protected foreign objects (within the meaning of section 2(1) of the Protected Objects Act 1975):

(viii)

protected New Zealand objects (within the meaning of section 2(1) of the Protected Objects Act 1975):

(ix)

sculptures:

(x)

photographs:

(xi)

carvings in any medium:

(xii)

other artistic or cultural artefacts:

(xiii)

motor vehicles (within the meaning of section 6(1) of the Motor Vehicle Sales Act 2003):

(xiv)

ships (within the meaning of section 2(1) of the Maritime Transport Act 1994); and

(b)

includes any person who carries out the activities referred to in paragraph (a) as a registered auctioneer (within the meaning of section 4(1) of the Auctioneers Act 2013); but

(c)

does not include any person, to the extent that the person is engaged in providing services other than the buying or selling of articles referred to in paragraph (a), including the following services:

(i)

mining precious metals or precious stones:

(ii)

manufacturing jewellery:

(iii)

crafting or polishing precious stones; and

(d)

does not include any person to the extent that the person is engaged in the buying or selling of precious metals or precious stones for industrial purposes

incorporated conveyancing firm has the meaning given to it by section 6 of the Lawyers and Conveyancers Act 2006

incorporated law firm has the meaning given to it by section 6 of the Lawyers and Conveyancers Act 2006

law firm means—

(a)

a barrister or a barrister and solicitor who is practising on the barrister’s or barrister and solicitor’s own account in sole practice:

(b)

in relation to 2 or more barristers and solicitors practising law in partnership, the partnership:

(c)

an incorporated law firm

lawyer has the meaning given to it by section 6 of the Lawyers and Conveyancers Act 2006

legal arrangement means—

(a)

a trust:

(b)

a partnership:

(c)

a charitable entity (within the meaning of section 4(1) of the Charities Act 2005):

(d)

any other prescribed arrangement (being an arrangement that involves a risk of money laundering or the financing of terrorism)

non-bank deposit taker has the meaning given to NBDT by section 5 of the Non-bank Deposit Takers Act 2013

occasional activity

(a)

means an activity—

(i)

that is specified in section 6(4) in relation to a reporting entity (other than an occasional transaction); and

(ii)

that does not involve a business relationship between the reporting entity and the reporting entity’s customer; and

(b)

includes an activity or a class of activities declared by regulations to be an occasional activity for the purposes of this Act; but

(c)

excludes an activity or a class of activities declared by regulations not to be an occasional activity for the purposes of this Act

occasional transaction or activity means—

(a)

an occasional transaction:

(b)

an occasional activity

privileged communication has the meaning set out in section 42

real estate agent has the same meaning as the definition of agent in section 4(1) of the Real Estate Agents Act 2008

real estate agency work has the same meaning as in the definition of that term in section 4(1) of the Real Estate Agents Act 2008

regulator

(a)

means a professional body responsible under any New Zealand enactment for enforcing the regulatory obligations of a particular industry or profession whose members are subject to this Act; and

(b)

includes any other body prescribed in regulations

search warrant means a warrant issued under section 117

suspicious activity report

(a)

means a report made under section 40:

(b)

includes—

(i)

a suspicious transaction report made under this Act; and

(ii)

a suspicious transaction report made under the Financial Transactions Reporting Act 1996

trust and company service provider means a person (other than a law firm, a conveyancing practitioner, an incorporated conveyancing firm, an accounting practice, or a real estate agent) who carries out any of the activities described in paragraphs (a)(i) to (vi) of the definition of designated non-financial business or profession

(2)

In section 5, replace the definition of designated business group with:

designated business group means a group of 2 or more persons in which—

(a)

each member of the group has elected, in writing, to be a member of the group and the election is in force; and

(b)

each election was made in accordance with regulations (if any); and

(c)

no member of the group is a member of another designated business group; and

(d)

each member of the group is—

(i)

related to each other member of the group within the meaning of section 2(3) of the Companies Act 1993 and is—

(A)

a reporting entity resident in New Zealand; or

(B)

a person that is resident in a country that has sufficient AML/CFT systems and is supervised or regulated for AML/CFT purposes; or

(ii)

providing a service under a joint venture agreement to which each member of the group is a party; or

(iii)

a government department named in Schedule 1 of the State Sector Act 1988, a State enterprise under the State-Owned Enterprises Act 1986, or a Crown entity under section 7 of the Crown Entities Act 2004; or

(iv)

related to 1 or more of the entities referred to in subparagraph (iii) through the provision of common products or services; or

(v)

a body corporate that is—

(A)

either a company (within the meaning of section 2(1) of the Companies Act 1993) or an overseas company within the meaning of that section; and

(B)

related (within the meaning of section 12(2) of the Financial Markets Conduct Act 2013) to every body corporate in the designated business group or proposed designated business group; and

(C)

either a reporting entity resident in New Zealand or a person who is resident in a country that has sufficient AML/CFT systems and that is supervised or regulated for AML/CFT purposes; or

(vi)

a related law firm, or a subsidiary of a law firm, that is a reporting entity in New Zealand (or the equivalent body in another country that has sufficient AML/CFT systems and that is supervised or regulated for AML/CFT purposes); or

(vii)

a related conveyancer, or a subsidiary of a conveyancer, that is a reporting entity in New Zealand (or the equivalent body in another country that has sufficient AML/CFT systems and that is supervised or regulated for AML/CFT purposes); or

(viii)

a related accounting practice, or a subsidiary of an accounting practice, that is a reporting entity in New Zealand (or the equivalent body in another country that has sufficient AML/CFT systems and that is supervised or regulated for AML/CFT purposes); or

(ix)

a related trust and company service provider, or a subsidiary of a trust and company service provider, that is a reporting entity in New Zealand (or the equivalent body in another country that has sufficient AML/CFT systems and that is supervised or regulated for AML/CFT purposes); or

(x)

a related real estate agent, or a subsidiary of a real estate agent, that is a reporting entity in New Zealand (or the equivalent in another country that has sufficient AML/CFT systems and that is supervised or regulated for AML/CFT purposes); or

(xi)

a related high-value dealer, or a subsidiary of a high-value dealer, that is a reporting entity in New Zealand (or an equivalent person resident outside New Zealand in a country that has sufficient AML/CFT systems and that is supervised or regulated for AML/CFT purposes); or

(xii)

a group of reporting entities, if the entities are each money transfer agents or sub-agents and each entity is related to every other entity in the designated business group or proposed designated business group in either of the following ways:

(A)

one of those entities is a money transfer agent and the other entities are the sub-agents of those agents:

(B)

those entities are each sub-agents of the same money transfer agent; or

(xiii)

an entity or a class of entities prescribed by regulations; and

(e)

each member of the group satisfies any conditions in subsection (3) that apply to that member

(3)

In section 5, replace the definition of existing customer with:

existing customer, in relation to a reporting entity, means a person who was in a business relationship with the reporting entity immediately before any provisions of this Act began to apply to the reporting entity

(4)

In section 5, definition of financial institution, paragraph (a)(vii), replace “for the person’s own account or for the accounts of customers in any of the following:” with “for, or on behalf of, a customer in any of the following using the person’s account or the customer’s account:”.

(5)

In section 5, replace the definition of law enforcement purposes with:

law enforcement purposes means—

(a)

the prevention, disruption, detection, investigation, and prosecution of—

(i)

any offence under this Act; or

(ii)

a money laundering offence; or

(iii)

any offence within the meaning of that term in section 243(1) of the Crimes Act 1961; or

(iv)

an offence under the Terrorism Suppression Act 2002:

(b)

the enforcement and administration of—

(i)

this Act:

(ii)

the Criminal Proceeds (Recovery) Act 2009:

(iii)

the Misuse of Drugs Act 1975:

(iv)

the Terrorism Suppression Act 2002:

(v)

the Mutual Assistance in Criminal Matters Act 1992:

(vi)

the Customs and Excise Act 1996:

(c)

the performance by the New Zealand Security Intelligence Service or the Government Communications Security Bureau of its functions under the Intelligence and Security Act 2017:

(d)

the detection and prevention of the harms specified in section 58(2) of the Intelligence and Security Act 2017:

(e)

any purpose or action referred to in paragraphs (a) to (d) relating to, or taken in respect of, legislation of an overseas jurisdiction that is broadly equivalent to the enactments referred to in those paragraphs

(6)

In section 5, definition of occasional transaction, paragraph (a), replace “over” with “equal to or above”.

(7)

In section 5, definition of prescribed transaction, paragraphs (a) and (b) (as inserted by section 5(1) of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Act 2015), replace “value greater than” with “value equal to or above”.

(8)

In section 5, definition of reporting entity, replace paragraph (a) with:

(a)

means—

(i)

a casino:

(ii)

a designated non-financial business or profession:

(iii)

a financial institution:

(iv)

a high-value dealer:

(v)

the New Zealand Racing Board; and

(9)

In section 5, repeal the definition of suspicious transaction report.

(10)

In section 5, definition of transaction, replace paragraph (c) with:

(c)

excludes the following:

(i)

the placing of any bet unless authorised under the Racing Act 2003:

(ii)

participation in gambling (as defined in section 4(1) of the Gambling Act 2003) unless authorised under the Racing Act 2003:

(iii)

a transaction or class of transactions declared by regulations not to be a transaction for the purposes of this Act

(11)

In section 5, replace the definition of wire transfer with—

wire transfer

(a)

means a transaction carried out on behalf of a person (the originator) through a reporting entity by electronic means with a view to making an amount of money available to a beneficiary (who may also be the originator) at another reporting entity; and

(b)

includes a transfer or transaction, or class of transfers or transactions, declared by regulations to be a wire transfer for the purposes of this Act; but

(c)

excludes—

(i)

transfers and settlements between financial institutions or other reporting entities if both the originator and the beneficiary are financial institutions or other reporting entities acting on their own behalf; and

(ii)

credit and debit card transactions if the credit or debit card number accompanies the transaction; and

(iii)

any other transfer or transaction or class of transfers or transactions declared by regulations not to be a wire transfer for the purposes of this Act.

(12)

In section 5, insert as subsections (2) to (4):

(2)

For the purposes of paragraph (d)(xii) of the definition of designated business group in subsection (1),—

money transfer agent, in relation to a money transfer provider, means a reporting entity that has a representation agreement with a money transfer provider

money transfer provider means a person who, under a representation agreement, authorises a money transfer agent to carry on money transfer services on behalf of the money transfer provider and to engage sub-agents for the purpose of carrying on those services in New Zealand

money transfer services means the provision of remittance services that are carried on, otherwise than by a bank, under a single brand, trade mark, or business name

representation agreement means a written agreement between a money transfer provider and a money transfer agent, or between a money transfer agent and a sub-agent, that states the terms on which the money transfer agent, or the sub-agent, carries on money transactions for customers relating to creating, operating, and managing companies

sub-agent means a reporting entity that has a representation agreement with a money transfer agent.

(3)

For the purposes of paragraph (e) of the definition of designated business group in subsection (1), a condition of membership is that the contact person of a designated business group must notify the relevant AML/CFT supervisor, in writing within 30 days, of any of the following:

(a)

the withdrawal of a member from the designated business group:

(b)

the termination of the designated business group:

(c)

any other change in the details previously notified to any AML/CFT supervisor in respect of the designated business group.

(4)

For the purpose of applying the definitions of designated non-financial business or profession and designated business group, a reporting entity must take into account guidance (if any) on the application of those definitions issued by the relevant AML/CFT supervisor.