Sanctions

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The Russia sanction regulatory system has been in place in New Zealand for over two years now. If you are a reporting entity under the New Zealand Anti-Money Laundering and Counter Financing of Terrorism Act (AML/CFT Act), you need to consider sanctions. It comes down to two reasons.

First, if you are a reporting entity under the AML/CFT Act, you are also a duty holder under the Russia Sanctions Act. This means that you have freezing, reporting and due diligence obligations.  Sanctions monitoring is not part of your AML/CFT obligations, but what you need to do to identify sanctioned individuals and entities is pretty similar to what you need to do for AML/CFT, so it makes sense to look at the two together.

Second, New Zealand has usually applied United Nations (UN) sanctions, but due to the current climate within the UN Security Council, it is likely that New Zealand will move more towards autonomous sanctions. Currently, we only have sanctions in relation to Russia's invasion of Ukraine, but the regulatory framework allows other invasions to be included, if needed. The Ministry of Foreign Affairs and Trade has been taking an educational approach so far, but we can expect more enforcement actions in the future.

Get in touch if you want to talk about your sanction obligations and how they can fit into your current AML/CFT compliance.