AML/CFT Legislative Changes
Summary
The Ministry of Justice has released a Cabinet Paper on four associated bills relating to reforms in the justice system, among which there is the AML/CFT Amendment Bill (the Bill). Key proposed changes are:
To provide relief on your obligations and apply a more risk-based approach to customer due diligence (CDD) for trusts, the Bill proposes to specify that you would not be required to verify information relating to the source of funds or source of wealth of the trust, if you are satisfied that standard CDD would be sufficient.
You are required to ‘have regard to’ any applicable guidance material produced by the Department of Internal Affairs or the Police for your risk assessment. This language could be interpreted as allowing you to consider, but ultimately reject, government advice. The Bill proposes to change the language from ‘have regard to’, to something more appropriate.
You are required to take ‘reasonable steps’ to determine whether a customer is a politically exposed person (PEP). This wording has created uncertainty on the nature of the steps to be taken and when those steps should be taken. The Bill proposes to clarify this passage.
You are required to retain record in a form enabling their ‘immediate’ availability. The Bill proposes to amend this provision to specify a timeframe within which you would be required to comply with requests to produce records.
Timeframe
The Minister and Associate Minister of Justice intend to introduce these bills to Parliament by December 2024. Following that, there will be an implementation period, to make sure that you have adequate time to adapt your policies, procedures and controls.
Resources
The Cabinet Paper (from page 56): Regulatory Systems Justice Amendment-Bill
Current guidance on PEP can be found at question 19: AML-CFT Frequently Asked Questions for DIA Reporting Entities
