Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Amendment Notice (No 2) 2022
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Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Amendment Notice (No 2) 2022
This notice is made by the Associate Minister of Justice under section 157(1) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 after—
(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 (No 2) 2022.
2 Commencement
This notice comes into force on 1 October 2022.
3 Principal notice
This notice amends the Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Notice 2018.
Schedule New Part 17 inserted into Schedule
Part 17 New Zealand Financial Crime Prevention Network
1
As the Associate Minister of Justice, and under section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt any reporting entity that is a member of the New Zealand Financial Crime Prevention Network (FCPN) from the requirements of the Act as set out in clauses 2 to 7.
Enhanced customer due diligence: level of risk involved in particular situation
2
The reporting entity is exempt from the requirement under section 11 to conduct enhanced customer due diligence (enhanced CDD), in accordance with sections 23 and 24, in the circumstances described in section 22(1)(d) if the reporting entity—
(a)
considers that there is an increased risk of money laundering or financing of terrorism involved in the situation concerned; and
(b)
has formed that view solely or partly—
(i)
because the reporting entity is aware that the customer or any other CDD target is being investigated for a specified offence; or
(ii)
based on information that the reporting entity has received as a member of the FCPN; and
(c)
considers that there is a risk that complying with the requirement would tip off the customer or the other CDD target.
Enhanced customer due diligence: activities requiring suspicious activities report
3
The reporting entity is exempt from the requirement under section 11 to conduct enhanced CDD, in accordance with sections 23 and 24, in the circumstances specified in section 22A if the reporting entity—
(a)
has formed the relevant suspicion solely or partly—
(i)
because the reporting entity is aware that the customer or any other CDD target is being investigated for a specified offence; or
(ii)
based on information that the reporting entity has received as a member of the FCPN; and
(b)
considers that there is a risk that complying with the requirement would tip off the customer or the other CDD target.
Ongoing customer due diligence
4
The reporting entity is exempt from the requirement under section 31 to conduct ongoing customer due diligence (ongoing CDD) if the reporting entity—
(a)
considers that there is an increased risk of money laundering or financing of terrorism involved in the business relationship or the activities relating to that relationship; and
(b)
has formed that view solely or partly—
(i)
because the reporting entity is aware that the customer or any other CDD target is being investigated for a specified offence; or
(ii)
based on information that the reporting entity has received as a member of the FCPN; and
(c)
considers that there is a risk that complying with the requirement would tip off the customer or the other CDD target.
Prohibitions, etc, if customer due diligence unable to be conducted
5
The reporting entity is exempt from the requirements under section 37(1)(a) to (d) for a reporting entity that is unable to conduct enhanced CDD or ongoing CDD—
(a)
not to establish a business relationship with the customer; and
(b)
to terminate any existing business relationship with the customer; and
(c)
not to carry out an occasional transaction or activity with or for the customer; and
(d)
to consider whether to make a suspicious activity report.
6
However, the reporting entity is exempt from those requirements only to the extent that clause 2, 3, or 4 exempts it from the requirement to conduct the enhanced CDD or the ongoing CDD.
Disclosing information relating to reports on suspicious activities or prescribed transactions
7
The reporting entity is exempt from the following requirements if the disclosure concerned is to another member of the FCPN and is only for law enforcement purposes:
(a)
the requirement under section 37(1)(e) to disclose the possibility of making a suspicious transaction report only to a person specified in section 46(2):
(b)
the requirement under section 46(2) (including as applied by section 48C) not to disclose information referred to in section 46(1) (including as applied by section 48C) except to a person specified in section 46(2).
Definitions
8
In this exemption,—
CDD target means any person referred to in section 11(1)(a) to (c) of the Act
specified offence means any of the following offences:
(a)
a money laundering offence:
(b)
an offence within the meaning of that term in section 243(1) of the Crimes Act 1961:
(c)
an offence under the Terrorism Suppression Act 2002.
9
In this exemption, there is a risk that complying with a requirement would tip off a customer or any other CDD target if that compliance would cause the customer or the other CDD target to know or suspect that—
(a)
the customer or the other CDD target may be under investigation; or
(b)
the activity or activities conducted or sought to be conducted by the customer may be brought to the attention of the New Zealand Police.
Reasons
10
The exemption has been granted for the following reasons:
(a)
the co-operation of reporting entities with law enforcement agencies is consistent with the Act and expectations of the inter-governmental Financial Action Task Force:
(b)
the FCPN—
(i)
was established to enable its members (which are the New Zealand Police, the New Zealand Customs Service, and certain reporting entities) to collaborate for law enforcement purposes; and
(ii)
is governed by a board comprising senior executives of each of the FCPN’s members:
(c)
the exemption will enhance the detection and deterrence of money laundering and financing of terrorism by—
(i)
reducing the likelihood that a customer or other CDD target who is under investigation, or whose suspicious activities or prescribed transactions have been reported to the Commissioner, will be tipped off; and
(ii)
enabling reporting entities that are members of the FCPN to share reports of suspicious activities or prescribed transactions and, in doing that, to collaborate for law enforcement purposes and enhance the financial intelligence provided to the Commissioner by way of those reports.
Commencement and expiry
11
This exemption comes into force on 1 October 2022.
12
This exemption expires at the close of 30 September 2027.
Dated at Wellington this 18th day of August 2022.
Hon Aupito William Sio,
Associate 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 1 October 2022, amends the Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Notice 2018 (the principal notice).
This notice inserts new Part 17 into the Schedule of the principal notice. New Part 17 exempts reporting entities that are members of the New Zealand Financial Crime Prevention Network from certain requirements of the Act. Those reporting entities are currently all financial institutions (namely, ANZ Bank New Zealand Limited, ASB Bank Limited, Bank of New Zealand, Kiwibank Limited, and Westpac New Zealand Limited).
Date of notification in Gazette: 25 August 2022.
This notice is administered by the Ministry of Justice.
Versions
Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Amendment Notice (No 2) 2022
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