Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698942930584.pdf (New Zealand)
Anti­Money Laundering and Countering Financing of Terrorism Bill Government Bill Explanatory note General policy statement The purpose of this Bill is to enhance New Zealand’s anti­money laundering and countering the ﬁnancing of terrorism (AML/CFT) framework, and in doing so, progress compliance with the Financial Action Task Force’s (FATF) AML/CFT Recommendations and as­ sure the robustness of New Zealand’s ﬁnancial system.
The FATF Recommendations, which have widespread support as be­ ing the international standard for AML/CFT, provide the reference point for the changes proposed by the Bill.

The FATF was created in 1989 by the then G­7 group of countries in response to the threat that money laundering posed to the international ﬁnancial system.

New Zealand has been an active member of the FATF since 1991.
Mem­ ber countries are routinely assessed via a Mutual Evaluation process for compliance with the FATF Recommendations.

New Zealand’s third Mutual Evaluation is currently underway.

New Zealand’s com­ pliance with the FATF Recommendations will be publicly reported on in October 2009.
The overarching objectives of the Bill are to— • improve the detection and deterrence of money laundering and the ﬁnancing of terrorism: 46—1 2 • • • Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note enhance New Zealand’s international reputation: contribute to public conﬁdence in the ﬁnancial system: realise these objectives with minimum cost through pro­ the AML/CFT framework is appropriate to viding that New Zealand’s broader ﬁnancial system, is compatible with international AML/CFT frameworks (particularly that of Aus­ tralia), and incorporates a risk based approach that provides businesses scope for assessing and responding to the risks of their particular operating environment.
The Bill requires that businesses covered by the AML/CFT reforms, which in this ﬁrst phase include casinos and businesses providing ﬁ­ nancial services (reporting entities), assess the AML/CFT risks that they may face in their business, establish and implement measures to appropriately manage those risks, and report any suspicious ﬁnancial transaction activity that they identify to law enforcement.
To do so effectively, the Bill requires reporting entities to— • establish, implement, maintain, and regularly audit an AML/CFT programme and undertake more rigorous cus­ tomer due diligence measures (improving upon those set out in the Financial Transactions Reporting Act 1996): implement enhanced due diligence measures relating to cus­ tomers, business relationships, and transactions presenting higher AML/CFT risks.
A notable measure in the Bill, in this respect, is the inclusion of enhanced measures relating to people responsible for prominent public functions, the intention being to enhance anti­corruption measures relating to such prominent public roles: undertake ongoing account and transaction monitoring: maintain records of account transaction activity for 5 years: more systematically report suspicious transactions to the Financial Intelligence Unit (again, improving upon the re­ quirements set out in the Financial Transactions Reporting Act 1996).
• • • • To support the overall functioning of the AML/CFT system, the Bill creates a AML/CFT supervisory regime to monitor, assist, and en­ force reporting entities’ compliance with their AML/CFT obliga­ tions, and maintain systems to identify and manage national level AML/CFT risks.
A supervisory regime involves multiple existing Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 3 • government agencies, as this approach minimises establishment costs and builds on existing capabilities so that ongoing delivery is cost ef­ fective.
Supervisory agencies include the following: • the Securities Commission for issuers of securities, trustee companies, futures dealers, collective investment schemes, brokers, and ﬁnancial advisers: the Reserve Bank of New Zealand (RBNZ) for banks, life in­ surers, and non­bank deposit takers: the Department of Internal Affairs for casinos, non­deposit taking lenders, and money changers, and other ﬁnancial insti­ tutions not supervised by the Securities Commission or RBNZ.
The Bill provides supervising agencies with additional powers to undertake their new role, and establishes governance and account­ ability, and information sharing arrangements to help ensure con­ sistency and effectiveness of implementation across the AML/CFT regime.

Key provisions include— • • powers to monitor, inspect, and sanction reporting entities so that supervisors can properly enforce reporting entities’ com­ pliance with AML/CFT obligations.
The effectiveness of the AML/CFT reforms is dependent on the willingness and ability of reporting entities to comply with the regime.
The powers are designed to be facilitative in the ﬁrst instance, but include a range of civil and criminal offence and penalty provisions to reinforce compliance: conditions on the use of AML/CFT information, including provision for supervisors and the Police and Financial Intelli­ gence Unit (FIU) to request and share AML/CFT compliance information and money laundering and terrorism ﬁnancing­re­ lated information with each other in both domestic and inter­ national contexts.
This would be subject to a proper interest protection: the creation of an AFL/CFT co­ordination committee, com­ prising agencies involved in the operation of the AML/CFT regime, tasked with ensuring the regime is implemented efﬁ­ ciently and effectively: measures to exempt certain ﬁnancial products justiﬁed as be­ ing of low risk, and certain businesses inadvertently caught by the Bill.
• • • 4 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note The Bill also extends the cross­border cash reporting regime admin­ istered by the New Zealand Customs Service.

Clause by clause analysis Clause 1 is the Title clause.

Clause 2 is the commencement clause.

It provides for the Bill, and for different provisions of the Bill, to be brought into force by Orders in Council.

Part 1 Preliminary provisions Clause 3 states the purpose of the Bill.
Clause 4 relates to interpretation and deﬁnes certain terms used in the Bill.

Clause 5 effectively provides that cash denominated in a currency other than a New Zealand currency is taken to be the equivalent in New Zealand currency.

Clause 6 provides that the Act binds the Crown.

Part 2 AML/CFT requirements and compliance Clause 7 provides that the Bill has effect despite anything to the con­ trary in any contract or agreement.
Subpart 1—Customer due diligence Subpart 1 of Part 2 (clauses 8 to 36) sets out the process by which a reporting entity satisﬁes itself that its customers are who they purport to be and that their ﬁnancial transactions are legitimate.

This process is known as customer due diligence and there are different forms of customer due diligence depending on the type of customer, the nature or circumstances of the transaction, and the level of risk involved.
Clause 8 deﬁnes the various forms of customer due diligence with reference to the sections that set out the requirements for each type.

The types of customer due diligence are enhanced, simpliﬁed, and standard.

Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 5 Clause 9 provides that customer due diligence must be conducted not only on the customer but on any beneﬁcial owner of a customer or any person acting on behalf of a customer.
The clause also indicates when the different types of customer due diligence must be conducted.

Clause 10 requires a reporting entity to rely on its risk assessment (undertaken in accordance with clauses 54(c) and (f) and 55) in order to establish the level of risk involved when conducting customer due diligence Clause 11 describes the basis on which customer identity is to be veriﬁed.
Standard customer due diligence Clause 12 sets out the circumstances in which a reporting entity must conduct standard customer due diligence.

Clause 13 sets out the information a reporting entity must obtain in order to identify a customer when conducting standard customer due diligence.

Clause 14 sets out the process for verifying the identity of a customer when conducting standard customer due diligence.
Clause 15 sets out some additional information a reporting entity must obtain when conducting standard customer due diligence.

Simpliﬁed customer due diligence Clause 16 sets out the circumstances in which a reporting entity may conduct simpliﬁed customer due diligence.
This type of due dili­ gence may be conducted in place of standard customer due diligence if the customer is a company listed on an exchange registered under Part 2B of the Securities Markets Act 1988, a government depart­ ment, a local government organisation, the New Zealand Police, the New Zealand Security Intelligence Service, or an entity speciﬁed in regulations.
Clause 17 sets out the information a reporting entity must obtain in order to identify a customer when conducting simpliﬁed customer due diligence.

Clause 18 sets out the process for verifying the identity of a customer when conducting simpliﬁed customer due diligence.

6 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note Clause 19 sets out some additional information a reporting entity must obtain when conducting simpliﬁed customer due diligence.
Enhanced customer due diligence Clause 20 sets out the circumstances in which a reporting entity must conduct enhanced customer due diligence.

The types of cir­ cumstances listed are those that involve customers or situations that, by their nature, are considered to have a high risk of money laun­ dering or the ﬁnancing of terrorism.
This includes customers who are trusts, are not resident in New Zealand and come from coun­ tries that have insufﬁcient anti­money laundering or counter­terror­ ism ﬁnancing systems or measures in place, companies with nominee shareholders or shares in bearer form, or politically exposed persons.

Transactions regarded as high risk are wire transfers, or transactions that are complex and unusually large or that show an unusual pat­ tern that appears to have no economic or lawful purpose.
Other situ­ ations in which enhanced customer due diligence must be conducted are those involving a correspondent banking relationship, those that the reporting entity considers should be subject to enhanced cus­ tomer due diligence because of the level of risk involved, or those that involve new or developing technologies and products that may favour anonymity.

Regulations may also be made to cover other cir­ cumstances that must be subject to enhanced customer due diligence.
Clause 21 sets out the information a reporting entity must obtain in order to identify a customer when conducting enhanced customer due diligence.

Clause 22 sets out the process for verifying the identity of a customer when conducting enhanced customer due diligence.
Clauses 23 to 27 set out additional requirements for enhanced cus­ tomer due diligence in situations involving politically exposed per­ sons, wire transfers, correspondent banking relationships, and new or developing technologies and products.

Ongoing customer due diligence and account monitoring Clause 28 requires reporting entities to continue to conduct due dili­ gence and to monitor accounts.

It sets out the minimum requirements for ongoing customer due diligence.
This includes a review of cus­ Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 7 tomer account activity and transaction behaviour and customer infor­ mation held by a reporting entity.

Reliance on third parties Clause 29 allows one member of a designated business group to rely on another member of that group to perform certain aspects of the AML/CFT requirements.
In particular, one member of the group may rely on another member to conduct customer due diligence pro­ cedures if certain conditions are met.

In addition, it may adopt part of another member of the group’s AML/CFT programme relating to record keeping, account monitoring, ongoing customer due dili­ gence, and annual reporting of the group (subject to any conditions) or, if relevant to the member’s business, use another member’s risk assessment.
One member of the group may also make a suspicious transaction report on behalf of another member or all members of the group.

The clause is subject to clause 33, which relates to the pro­ tection of personal information.

Clause 30 allows a reporting entity to rely on a third party in an­ other country to conduct customer due diligence procedures subject to certain conditions.
In particular, the third party being relied on must either be a reporting entity or be resident in a country with suf­ ﬁcient anti­money laundering and countering the ﬁnancing of terror­ ism systems and measures in place and be supervised or regulated for AML/CFT purposes.

The reporting entity, however, remains re­ sponsible for ensuring that customer due diligence is conducted in accordance with the Bill.
Clause 31 allows a reporting entity to authorise a person to be its agent and to rely on that agent to conduct customer due diligence on its behalf and to obtain information for that purpose.

Clause 32 provides that the information obtained from a third party conducting customer due diligence procedures for a reporting entity may only be used by that entity for the purposes of complying with the Bill and the regulations.
Clause 33 provides for the protection of personal information sup­ plied by one member of a designated business group to another mem­ ber of that group.
The protection is limited to personal information provided for the purposes of establishing identity or veriﬁcation of identity when conducting customer due diligence on behalf of an­ 8 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note other member of the group or for the purposes of adopting part of one member’s AML/CFT programme.
The information must be subject to privacy protections at least equivalent to those set out in privacy principles 5 to 11 in section 6 of the Privacy Act 1993.

The reporting entity providing the information, however, remains responsible for the use or disclosure of that information.

Prohibitions Clauses 34 to 36 contain prohibitions on establishing or continuing a business relationship in certain circumstances or in relation to certain transactions.
Subpart 2—Suspicious transaction reports Subpart 2 of Part 2 (clauses 37 to 45) deals with the reporting of suspicious transactions by reporting entities to the Commissioner of Police and restricts the disclosure of information relating to a suspi­ cious transaction report.

Subpart 3—Record keeping Subpart 3 of Part 2 (clauses 46 to 52) sets out the requirements for a reporting entity to keep records relating to transactions and business relationships.
Subpart 4—Compliance with AML/CFT requirements Subpart 4 of Part 2 (clauses 53 to 58) deals with internal procedures, policies, and controls that a reporting entity must have in order to prevent activities related to money laundering and the ﬁnancing of terrorism.

In particular, a reporting entity must have an AML/CFT compliance programme and an AML/CFT compliance ofﬁcer, and staff must receive appropriate AML/CFT training.
Before conduct­ ing customer due diligence or establishing an AML/CFT programme, a reporting entity must undertake an assessment of the risk of money laundering and ﬁnancing of terrorism (a risk assessment).

This risk assessment is used to determine the level of risk when conducting different types of customer due diligence.
A reporting entity must review both its risk assessment and AML/CFT programme and en­ Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 9 sure that they are audited every 2 years or at any time if a request for an audit is made by the reporting entity’s AML/CFT supervisor.

A reporting entity is also required to provide an annual report on its risk assessment and AML/CFT programme to its AML/CFT supervisor.
The report must take into account the results and implications of any review or audit.

Reporting entities must ensure that their branches and subsidiaries comply with AML/CFT requirements.

Subpart 5—Codes of practice Subpart 5 of Part 2 (clauses 59 to 64) provides for the preparation, approval, and publication of codes of practice.

Clause 59 provides deﬁnitions of codes of practice and proposed codes of practice.
Clause 60 provides that AML/CFT supervisors must prepare codes of practice for their sectors if directed to do so by their Minister.

The purpose of the code is to provide a statement of practice to assist reporting entities to comply with their obligations under the Bill and the regulations.

Clause 61 sets out the procedure for approval and publication of codes of practice.
Before recommending a code of practice to the Minister for approval, the AML/CFT supervisor must consult with persons and organisations that the Minister thinks have an interest in the subject matter of the code.

The Minister may direct the AML/CFT supervisor to reconsider any aspect of the code of practice and make amendments.
In the event that the AML/CFT supervisor does not amend the code of practice as directed by the Minister, the Minister may make those amendments as well as any other amendments that the Minister, after consultation with the AML/CFT supervisor, considers necessary.

Clause 62 provides for the amendment and revocation of codes of practice.
Clause 63 provides that publication in the Gazette of a notice of a code of practice is conclusive evidence that the procedural require­ ments for approval and publication of the code have been complied with.

Clause 64 provides for the legal effect of codes of practice.

10 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note Subpart 6—Cross­border transportation of cash Subpart 6 of Part 2 (clauses 65 to 68) deals with cross­border transportation of cash.
This subpart requires a person who brings cash (which includes physical currency and bearer­negotiable instruments) into, or takes cash out of, New Zealand (whether accompanied or unaccompanied) to make a cash report to the New Zealand Customs Service if the cash amount is over the applicable threshold value.

The applicable threshold value will be prescribed in regulations made under the Bill.
A person in New Zealand who receives cash over the applicable threshold value from overseas will also be required to make a cash report.

The Customs ofﬁcer who receives a report must forward that report to the Commissioner of Police.

The chief executive of the New Zealand Customs Service is required to keep records of cash reports.

The report must include details of the identity of the person making the report and the date on which it is made.

These records are to be retained for at least 1 year.
Part 3 Enforcement Part 3 sets out the enforcement regime (which consists of civil and criminal enforcement) relating to non­compliance with the AML/CFT requirements set out in Part 2.
Subpart 1—General provisions relating to Part Proceedings for civil penalties Clause 69 provides that applications for a civil penalty under this Part must be made within 6 years after the conduct giving rise to the liability occurred, and provides for the standard of proof and proced­ ural matters in civil penalty proceedings.
Relationship between civil penalty and criminal proceedings Clause 70 allows criminal proceedings for an offence under this Part to commence against a person even if proceedings for a civil penalty have commenced against that person for the same conduct.

How­ Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 11 ever, proceedings under this Part for a civil penalty against a person are stayed if criminal proceedings against the person for the same conduct have been commenced.
Clause 71 provides that a person may not be penalised more than once for the same conduct.

Clause 72 provides that evidence given in civil penalty proceedings is not generally admissible in subsequent criminal proceedings relating to the same conduct.
Liability of senior managers Clause 73 provides that a senior manager of a body corporate com­ mits an offence if— • • the body corporate commits an offence under this Part; and the manager knew that the offence was being or would be com­ mitted; and the manager was in a position to inﬂuence the conduct of the body corporate in relation to the commission of the offence; and the manager failed to take all reasonable steps to prevent the commission of the offence.
• • Clause 74 provides for the civil liability of a senior manager of a body corporate along the same lines set out in clause 73.

Clause 75 prescribes criteria for establishing whether a senior man­ ager failed to take all reasonable steps to prevent the commission of an offence or a civil liability act.

Subpart 2—Civil liability Clause 76 deﬁnes a civil liability act, which is effectively when a re­ porting entity fails to comply with any of its AML/CFT requirements under Part 2.
Clauses 77 to 88 set out what an AML/CFT supervisor may do in response to an alleged civil liability act.
AN AML/CFT supervisor may do 1 or more of the following: • • issue a formal warning under clause 78: accept an enforceable undertaking under clause 79 and seek an order in the court for breach of that undertaking under clause 80: 12 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note seek an injunction from the High Court under clause 83 or 85: apply to the court for a pecuniary penalty under clause 88.
• • The maximum pecuniary penalty for the following civil liability acts is $100,000 in the case of an individual and $1 million in the case of a body corporate: • • failing to adequately monitor accounts and transactions: entering into, or continuing, a business relationship with a per­ son who does not produce or provide satisfactory evidence of that person’s identity: entering into, or continuing, a correspondent banking relation­ ship with a shell bank: failing to ensure that the reporting entity’s branches and sub­ sidiaries comply with the relevant AML/CFT requirements.
• • The maximum pecuniary penalty for the following civil liability acts is $200,000 in the case of an individual and $2 million in the case of a body corporate: • failing to conduct customer due diligence as required by sub­ part 1 of Part 2: failing to keep records in accordance with the requirements of subpart 3 of Part 2: failing to establish, implement, or maintain an AML/CFT pro­ gramme.
• • Subpart 3—Offences Subpart 3 of Part 3 (clauses 89 to 112) deals with offences, which relate mainly to non­compliance with the AML requirements that are set out in Part 2.
A person who commits an offence relating to a civil liability act or re­ lating to suspicious transactions reports (except unlawful disclosure of information relating to a suspicious transaction report) is liable, on conviction, to,— • in the case of an individual, either or both of the following: • • in the case of a body corporate, a ﬁne of up to $5 million.
a term of imprisonment of not more than 2 years: a ﬁne of up to $300,000; and • Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 13 The time limit for bringing a prosecution in relation to these offences is within 6 months of the date on which the prosecutor is satisﬁed that there is sufﬁcient evidence to warrant commencement of proceed­ ings.

However, proceedings may not be commenced if more than 3 years have passed since the offence was committed.
A person who unlawfully discloses information relating to a suspi­ cious transaction report is liable, on summary conviction, to,— in the case of an individual, a ﬁne of up to $10,000; and • • in the case of a body corporate, a ﬁne of up to $100,000.
A person who commits an offence relating to the structuring of trans­ actions to avoid application of AML/CFT requirements (other than a transaction involving cross­border transportation of cash) is liable, on conviction, to,— • in the case of an individual, either or both of the following: • • in the case of a body corporate, a ﬁne of up to $5 million.
a term of imprisonment of not more than 2 years: a ﬁne of up to $300,000; and • A person who commits an offence of obstructing an AML/CFT supervisor or providing false or misleading information to an AML/CFT supervisor is liable, on conviction, to,— • a term of imprisonment of not more than 3 months: a ﬁne of up to $10,000; and in the case of an individual, either or both of the following: • • • in the case of a body corporate, a ﬁne of up to $50,000.
The time limit for bringing a prosecution in relation to these offences is the same as that provided for offences relating to a civil liability act or suspicious transactions reports (except unlawful disclosure of information relating to a suspicious transaction report).
A person who commits an offence relating to cross­border transporta­ tion of cash is liable, on summary conviction, to— • a term of imprisonment of not more than 3 months: a ﬁne of up to $10,000; and in the case of an individual, either or both of the following: • • • in the case of a body corporate, a ﬁne of up to $50,000.
Clause 111 allows the chief executive of the New Zealand Customs Service to deal summarily with certain reporting offences relating to 14 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note failure to report cash over the applicable threshold value.
The chief executive may also, at any time before an information has been laid in respect of an offence, accept from the person who failed to report a sum, not exceeding $500, in full satisfaction of any ﬁne the person would otherwise be liable to pay.

Clause 112 provides that nothing in the Bill limits or affects the Cus­ toms and Excise Act 1996.
It also imposes a duty on Customs ofﬁcers to prevent the movement of cash in breach of any requirements of the Bill or regulations and enables them to exercise powers under certain sections of the Customs and Excise Act 1996 in order to discharge that duty.

Subpart 4—Search and seizure Subpart 4 of Part 3 (clauses 113 to 126) sets out the provisions for search and seizure.

Searches may only be conducted with a warrant.
Part 4 Institutional arrangements and miscellaneous provisions Subpart 1—Institutional arrangements AML/CFT supervisors Clause 127 provides that there will be 3 AML/CFT supervisors as follows: • the Reserve Bank will be the AML/CFT supervisor for banks, life insurers, and non­bank deposit takers: the Securities Commission will be the AML/CFT supervisor for issuers of securities, trustee companies, futures dealers, collective investment schemes, brokers, and ﬁnancial advis­ ers: the Department of Internal Affairs will be the AML/CFT supervisor for casinos, non­deposit­taking lenders, money changers, and other reporting entities that are not covered by the other 2 AML/CFT supervisors.
• • If a reporting entity provides products or services that are covered by more than 1 AML/CFT supervisor, then the supervisors may agree between them who will be the reporting entity’s AML/CFT super­ Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 15 In the absence of agreement, the AML/CFT co­ordination visor.

committee will appoint the AML/CFT supervisor.

Clause 128 sets out the functions of an AML/CFT supervisor.
Clause 129 sets out the powers of an AML/CFT supervisor.

Clause 130 relates to the conduct of on­site inspections of report­ ing entities by their AML/CFT supervisors.

An AML/CFT super­ visor may require a reporting entity to answer questions relating to its records and documents and to provide further information in the course of an on­site inspection.
Use and disclosure of information Clause 131 allows an AML/CFT supervisor to use information (other than personal information) that it has obtained in another capacity for the purpose of exercising its powers or performing its functions and duties as an AML/CFT supervisor and vice versa.

Clause 132 places a restriction on the AML/CFT supervisors’ powers to use information obtained under clause 131.
They may only use that information if the person providing the information was advised of the purpose for which it was obtained at the time he or she provided it.

Clause 133 provides for the disclosure of information (other than per­ sonal information) by the Commissioner of Police, the New Zealand Customs Service, and AML/CFT supervisors to government agen­ cies for law enforcement purposes.
Clause 134 provides for the use and disclosure of information by a government agency or an AML/CFT supervisor to another govern­ ment agency or AML/CFT supervisor.

Clause 135 enables an AML/CFT supervisor to appoint enforcement ofﬁcers.

Financial intelligence functions of Commissioner Clause 136 sets out the ﬁnancial intelligence functions of the Com­ missioner of Police.

Clause 137 sets out the ﬁnancial intelligence powers of the Commis­ sioner of Police.
16 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note Clause 138 provides for the Commissioner of Police’s delegation powers.

Clauses 139 to 142 sets out the process for issuing suspicious trans­ actions guidelines.

Co­ordination Clause 143 sets out the co­ordination role of the Ministry responsible for the administration of the Bill (the Ministry) in relation to the AML/CFT regulatory system.
Clause 144 requires the chief executive of the Ministry to establish an AML/CFT co­ordination committee.

The committee must consist of— • • • • • a representative from the Ministry; and a representative from the New Zealand Customs Service; and every AML/CFT supervisor; and a representative of the Commissioner of Police; and such other persons (who must be from a government agency) who may be invited by the chief executive to attend from time to time.
Clause 145 provides that the role of the AML/CFT co­ordination committee is to ensure that the necessary connections are made be­ tween the various supervisors and agencies so that the AML/CFT regulatory system operates consistently, effectively, and efﬁciently.

Clause 146 sets out the functions of the AML/CFT co­ordination committee.

Subpart 2—Miscellaneous provisions Regulations Clauses 147 to 150 relate to the regulation­making power.
Ministerial exemptions Clause 151 allows the Minister to exempt reporting entities or trans­ actions, or classes of reporting entities or transactions, from all or any provisions of the Bill.

The exemption may be unconditional or subject to conditions.

The Minister must have regard to certain mat­ ters before granting the exemption.
Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 17 Clause 152 requires the Minister to consult with the relevant AML/CFT supervisor and other interested persons before granting an exemption.

Clause 153 provides that every exemption must include a reason for the granting of the exemption and be notiﬁed in the Gazette Transitional and savings provisions Clause 154 and Schedule 1 deal with transitional and savings provi­ sions.
Consequential amendments, repeals, and revocations Clause 155 and Schedule 2 deal with amendments, repeals, and revo­ cations to other enactments.

Regulatory impact statement The Financial Action Task Force (FATF), of which New Zealand is a member, has developed Recommendations to guide member coun­ tries in implementing anti­money laundering and counter­terrorist ﬁ­ nancing (AML/CFT) measures.

Member countries’ compliance with these Recommendations is rou­ tinely evaluated.
New Zealand’s compliance with the Recommenda­ tions will be evaluated by the FATF in 2009.

There are signiﬁcant deﬁciencies in New Zealand’s AML/CFT regime in respect of the standard established by the FATF Recommendations.
The main gaps in New Zealand’s AML/CFT regime are as follows: • ﬁnancial and non­ﬁnancial businesses are not required to im­ plement AML/CFT systems, involving, for example, customer due diligence and record keeping procedures, to the standard established according to the FATF Recommendations: not all businesses included in the scope of FATF Recommen­ dations fall within New Zealand’s regime: there is no mandatory supervision and monitoring of reporting entities (businesses determined as having AML/CFT respon­ sibilities) to ensure that they are carrying out their AML/CFT obligations.
• • 18 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note The status quo is not preferred as it would see New Zealand continue to have a deﬁcient AML/CFT regime in respect of the internation­ ally accepted standard.

[Information deleted in order to maintain the effective conduct of public affairs through the free and frank expres­ sion of opinions between ofﬁcials and Ministers.]
The expected costs of the proposed AML/CFT reform include— • costs to reporting entities and their customers of new and ex­ tended regulatory requirements related to customer due dili­ gence, transaction monitoring, transaction reporting, record keeping, and implementation of AML/CFT compliance pro­ grammes: costs to the Crown of monitoring and supervising reporting entities, assessing money laundering risks at national and sec­ tor levels, analysing an increased volume and variety of suspi­ cious transaction reports, and ensuring adequate co­ordination of regulatory functions across multiple supervisors.
• Over time, the expected beneﬁts of the proposed AML/CFT reform include— • supporting and protecting New Zealand’s international trade, borrowing, investment, and business objectives: strengthening the ability of law enforcement agencies to de­ tect, investigate, prosecute, and recover the proceeds of ser­ ious crime: deterring predicate offending by ensuring that any proceeds of crime are more difﬁcult to launder, therefore reducing the crime incentive: supporting counter­terrorism efforts in New Zealand and the Asia Paciﬁc region.
• • • Ofﬁcials have consulted on options for compliance with the FATF Recommendations that seek to avoid excessive compliance burdens, are effective in their resolve, and are appropriate to New Zealand circumstances.
Adequacy statement The Regulatory Impact Analysis Team has reviewed this regulatory impact statement (RIS) and considers that it contains the required information and accurately reﬂects the regulatory impact analysis undertaken in relation to the proposal, which we also consider to be Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 19 adequate according to the criteria set out in the CabGuide.

As a re­ sult, we consider that this RIS is adequate.
Status quo and problem Money laundering and the ﬁnancing of terrorism are global problems.

The FATF, associated with the OECD, was established by the G­7 countries in 1989 to develop and promote policies and legislation to combat money laundering and terrorist ﬁnancing.

In April 1990, the FATF issued Forty Recommendations to guide governments in their implementation of laws and regulations to combat money launder­ ing.
In response to the attacks in the United States on 11 September 2001, the FATF issued an additional 8 special Recommendations to guide governments in their implementation of laws and regulations to combat terrorist ﬁnancing (with a ninth added in 2004).

New Zealand is a member of the FATF and, while they are not legally binding, there is a strong impetus for compliance with the Recom­ mendations.
There is widespread acceptance of the Recommenda­ tions as a robust standard of AML/CFT measures, with FATF mem­ bership extending well beyond the OECD membership (32 jurisdic­ tions and 2 regional organisations including the European Commis­ sion and the Gulf Cooperation Council).
New Zealand voted in favour of the revised Recommendations in 2004, and the United Nations (UN) Security Council has strongly urged UN member states to comply with FATF standards (Secur­ ity Council Resolution No 1617, 29 July 2005).
Implementing the FATF recommendations would also enable New Zealand to demon­ strate its compliance with the UN Convention Against Trans­national Organized Crime (ratiﬁed in 2002) and the International Convention for the Suppression of the Financing of Terrorism (to which New Zealand is a State Party) and progress compliance with the UN Con­ vention Against Corruption (signed in December 2003).

Member countries’ compliance with the FATF Recommendations is routinely evaluated.
New Zealand’s compliance with the Recom­ mendations will be evaluated by a FATF/Asia Paciﬁc Group (APG) Mutual Evaluation process commencing in April 2009 and later pub­ licised in October 2009.
New Zealand to some degree achieves compliance with the Rec­ ommendations via the Financial Transactions Reporting Act 1996 20 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note (FTRA), which places obligations on ﬁnancial institutions to under­ take measures, such as verifying the identity of customers, keeping records of transactions and veriﬁcations of identity, and reporting suspicious transactions to the Commissioner of Police.
Compliance with the 9 Special Recommendations relating to terrorist ﬁnancing is achieved primarily through the Terrorism Suppression Act 2002.

A 2003 assessment of New Zealand’s implementation of FATF’s Rec­ ommendations found New Zealand to be non­compliant or materi­ ally non­compliant with 8 of the 40 Recommendations and 2 of 8 (latterly extended to 9) Special Recommendations, including core re­ quirements of the regime, which are accorded additional scrutiny and weight.
Signiﬁcant deﬁciencies in New Zealand’s AML/CFT regime remain, including— • ﬁnancial and non­ﬁnancial businesses are not required to im­ plement AML/CFT systems, involving, for example, customer due diligence and record keeping procedures, to the standards set out in the FATF Recommendations: not all businesses included in the scope of FATF Recommen­ dations fall within New Zealand’s regime: there is no mandatory supervision and monitoring of reporting entities to ensure that they are carrying out their AML/CFT obligations.
• • Objectives The objectives proposed for New Zealand’s AML/CFT regulatory framework are to— • • • • detect and deter money laundering and terrorist ﬁnancing: maintain and enhance New Zealand’s international reputation: contribute to public conﬁdence in the ﬁnancial system: realise these objectives with minimum cost to industry.
Alternative options [Information deleted in order to maintain the effective conduct of public affairs through the free and frank expression of opinions be­ tween ofﬁcials and Ministers.]
Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 21 Status quo Retaining the status quo is not appropriate given New Zealand’s cur­ rent system (established in 1996) is not equipped to deal with the technological and international regulatory developments along with the greater interconnectedness of jurisdictions and transactional ac­ tivity, and the associated risk of domestic and cross­jurisdictional money laundering and terrorism ﬁnancing.
Neither would this op­ tion satisfy the objective of progressing New Zealand’s compliance with our international obligations.

There have been a number of ex­ tensions to the current legislative and administrative framework in recent years, however, the extent to which the current framework needs to change rules out the option of a simple patch.
Implementation without supervisory system An alternative approach would be to introduce the AML/CFT obliga­ tions for ﬁnancial institutions and casinos as per the preferred option set out below, without a supervision system to support and enforce the implementation of those obligations.

This approach, while providing savings to the Crown in the short term, would not satisfy the FATF’s test of having an effective regime.
FATF recommends explicitly that countries ensure that reporting entities are adequately supervised for compliance with their AML/CFT obligations (Recommendations 23 and 24), competent authorities (including supervisors) are provided with appropriate ﬁnancial, human, and technical resources (Recom­ mendation 30), and the effectiveness of AML/CFT systems is kept under review (Recommendation 32).
This option is therefore not preferred as it would not satisfy the stan­ dard established by the FATF recommendations and, most impor­ tantly, would impose compliance costs on compliant businesses for little intelligence beneﬁt.
This approach would raise fundamental questions about the integrity of New Zealand’s AML/CFT measures and its commitment to international AML/CFT efforts, and would therefore fail to satisfy the policy objectives of detecting money laun­ dering and terrorist ﬁnancing and maintaining New Zealand’s inter­ national reputation, at minimum cost to industry.
22 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note Deferral An alternative approach would be to defer the proposed legislative AML/CFT reform until 2010, to ensure that business costs are kept to a minimum and allow businesses to attend to managing the most pressing commercial challenges posed by the current ﬁnancial cli­ mate.

This would mean that legislation would not be in force until late 2012 at the earliest.
[Information deleted in order to maintain the effective conduct of public affairs through the free and frank expression of opinions between ofﬁcials and Ministers.]
Immediate full compliance A fourth alternative approach is to provide for the proposed reforms to take effect at the enactment of the legislation, and at the same time extend the obligations to other industries that the FATF recommen­ dations indicate should be covered by a country’s AML/CFT meas­ ures (eg, lawyers, real estate agents, accountants, and other industries considered to be at risk of abuse by money launderers and terrorist ﬁ­ nanciers).
This option is not preferred as it would signiﬁcantly exac­ erbate the cost to businesses during the establishment phase through heightening the competition for AML/CFT systems development ex­ pertise.

Preferred option The preferred option is to progress compliance with the FATF Rec­ ommendations.
The preferred option would see the implementation of a new AML/CFT regime in late 2011 (ie, 2 years following legis­ lative assent) requiring ﬁnancial institutions and casinos to undertake to— • assess their business operating environment (including, for example, product/service offerings and customer base) for money laundering and terrorism ﬁnancing risks: based on the assessment of risks, and legislative obligations, implement AML/CFT policies and procedures to identify, mitigate, and report suspicious activity, including— • identiﬁcation and veriﬁcation of customers identities and beneﬁcial ownership considerations: • Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 23 • • • monitoring transactions for unusual or suspicious trans­ actions: established reporting processes: store records of account ﬁles, business correspondence, and transactions for 5 years: • conduct annual assessments and 2 yearly independent audits of their AML/CFT systems.
• Other relevant reporting entities would be brought within scope of the regime in a second phase.
The reform would also see the establishment of a new AML/CFT supervisory regime, involving monitoring and enforcement (with re­ course to civil and criminal penalties) of reporting entities’ compli­ ance with their AML/CFT regulatory obligations by the— • Securities Commission for issuers of securities, trustee com­ panies, futures dealers, collective investment schemes, bro­ kers, and ﬁnancial advisers: Reserve Bank of New Zealand (RBNZ) for banks, life insur­ ers, and non­bank deposit takers: Department of Internal Affairs for casinos, non­deposit taking lenders, and money changers, and other ﬁnancial institutions not supervised by the Securities Commission or RBNZ.
A National Co­ordination Committee, comprising the supervisors, FIU, Ministry of Justice and other agencies involved in the operation of the AML/CFT regime, would be established as a central point of operational co­ordination of the regime to ensure gaps and duplica­ tion of supervisory activity are minimised, and that supervisory ac­ tivity is applied consistency and proportionately.
• Costs and beneﬁts The costs of the overall proposal are estimated as being— (1) Compliance costs for reporting entities, of complying with ad­ ditional and strengthened AML/CFT requirements.

An independent cost estimation (undertaken by Deloitte for the Ministry of Justice in 2008) assessed the start­up costs across ﬁnancial institutions and casinos as $97 million (to be spread over a 2­year implementation period), with ongoing costs of $21 million per year thereafter.
These adjusted ﬁgures 24 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note should be treated with some caution.

The data indicated an upper end cost estimate of $249 million for start up costs and $103 million for ongoing costs.

However, Deloitte assessed the probable cost being at the lower end of surveyed range, bringing the probable cost more into line with actual experi­ ence from overseas jurisdictions; particularly that of Australia.
These costs will vary across sectors.

Variables include the size and nature of a business, its transaction volumes, its customer base, its current level of compliance with existing AML/CFT requirements, and its ability to share technology and training materials with an overseas parent (depending upon the degree of common platforms).

The level of start­up cost is also ex­ pected to be directly proportionate to the current preparedness of sectors.
Estimate of business compliance costs (adjusted) ($million) Totals by sector Average per entity by sector Start­up total across years 1 and 2 ($) Ongoing (year 3 and beyond) ($) Start­up total across years 1 and 2 ($) Ongoing (year 3 and beyond) ($) 17 70 41 3 256 services to ﬁnance and investment companies 6 Registered banks Non­bank deposit takers Life insurers Trustee companies Other ﬁnancial institutions Casinos Total 81.60 15.60 0.40 1.80 2.20 9.80 1.50 97.30 0.07 0.40 0.14 4.10 0.90 21.21 4.80 0.01 0.04 N/A N/A 0.25 0.92 0.00 0.01 N/A N/A 0.15 Of the affected sectors, the banking sector is expected to bear 84% of the start­up cost, and 74% of the ongoing costs, mainly because this sector undertakes the bulk of the transactional activity in the economy.
The median estimate of the ongoing cost to the banking sector is 0.12% of gross revenue per year.
The banking sector is expected to have lower per transaction costs than other sectors, given economies of scale consider­ ations, it having existing responsibilities under the Financial Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 25 Transactions Reporting Act 1996 (which is based on earlier FATF recommendations), and that a number of the banks are headquartered in jurisdictions that have already updated their AML/CFT laws to fully meet FATF requirements.
The ability to leverage a fully developed parent AML/CFT programme is often one of the single biggest catalysts to reducing costs and ensuring timeliness of programme completion.

Across most sectors, account and transaction monitoring and AML/CFT compliance programmes are expected to account for around 90% of start­up costs and 80% of ongoing costs.
However, again given the varying transactional environments and readiness of existing systems and capabilities, the sectors will bear costs differently across the various elements of the proposed regime, as illustrated in the table below.
Estimate of compliance burdens across AML/CFT obligations by sector Customer ID Account & transaction monitoring Record keeping AML programmes Start­up total On­ going Start­up total On­ going 69% Start­up total — On­ going Start­up total On­ going 7% 24% 19% 71% 5% 0% 0% — 5% — — — — 18% 29% 89% 75% — 1% — — — — — 75% 71% — 9% 25% 50% 77% 50% 1% 16% 4% 84% 71% 40% 44% 13% 1% — 1% 47% 56% Registered banks Non­bank deposit takers Life insurers Trustee companies Other ﬁnancial institutions Casinos (2) • Costs to the Crown of new regulatory functions— [Information deleted in order to maintain the current constitu­ tional conventions protecting the conﬁdentiality of advice ten­ dered by ministers and ofﬁcials.]
monitoring and supervising reporting entities, as entities are not currently supervised in New Zealand for compliance with all AML/CFT requirements.
The costs of supervision will be 26 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note spread across the Securities Commission, RBNZ and the De­ partment of Internal Affairs and will include the costs of per­ forming each of the following functions: • issuing guidelines to assist reporting entities to meet their obligations: conducting onsite visits, or commissioning expert third parties to do so: providing feedback to reporting entities on their com­ pliance: taking actions, including enforcement actions, to effect compliance: • • • • • • assessing money laundering risks at national and sector levels, because this assessment is necessary for risk based implemen­ tation of regulatory requirements and is not currently under­ taken: analysing an increased volume and variety of suspicious trans­ action reports, (STRs) – because more entities will be required to ﬁle suspicious transaction reports, and because all entities will be supervised and monitored in their ﬁling of suspicious transaction reports: ensuring adequate co­ordination of regulatory functions across multiple supervisors, the FIU and other agencies performing AML/CFT regulatory functions, so as to ensure an effective and efﬁcient approach to regulation.
The beneﬁts of implementing the proposed reform are expected to include (once fully implemented)— • greater ability of law enforcement agencies to detect, inves­ tigate, prosecute, and recover the proceeds of serious crime.
Through ﬁrms having more systematic and robust risk iden­ tiﬁcation and reporting, the reporting of suspicious transac­ tion activity is expected to increase by between 232% (based on UK’s experience in enacting similar legislation) and 350% (based on Australia’s experience in enacting similar legisla­ tion) [information deleted in order to maintain the effective conduct of public affairs through the free and frank expres­ sion of opinions between ofﬁcials and Ministers]: deterrence of serious crime, tax evasion, and the facilitation of terrorism, to the extent that the reform makes the launder­ • Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 27 ing of proceeds of crime and terrorism ﬁnancing more difﬁcult and costly, and impacts the “returns to crime” and the capacity to reinvest in further criminal activity.
This includes transna­ tional organised crime and international tax evasion, which is expected to become more rather than less prevalent over time given the globalisation of goods, capital, and people is antici­ pated to grow, rather than shrink.

Evidence suggests that ro­ bust AML/CFT regimes reduce crime through detection and deterrence mechanisms.
A value to this particular beneﬁt is difﬁcult to quantify, [information deleted in order to main­ tain the effective conduct of public affairs through the free and frank expression of opinions between ofﬁcials and Ministers]: better compliance with our international obligations, which in turn contributes to New Zealand’s good name and our trade, foreign direct investment, and borrowing interests in the medium term (particularly important goals in the present context of international capital constraints): improved efﬁciency in the economy through improving mar­ ket integrity, business and industry reputations, reducing costs to law­abiding businesses and citizens from being exploited and defrauded by criminal interests, and the diversion of re­ sources to uses that would not otherwise be chosen other than for the objective of obscuring criminal offending: improved risk management in New Zealand businesses and industries, with the result of increased fraud detection and de­ terrence, better bad debt management, and improved domestic investor conﬁdence (particularly important goals in the present context of revelations of ﬁnancial fraud).
International experi­ ence suggests that, despite increased compliance costs, ﬁrms regard the regulatory burden as acceptable given the beneﬁts in terms of protecting the integrity of their ﬁrms.

For example, good risk assessment, customer due diligence, and monitoring measures are important from a wider prudential management perspective.
Without such measures, ﬁnancial institutions can become subject to reputation, credit, operational, and legal risks, which can result in signiﬁcant costs: improved competitiveness for New Zealand based businesses dealing internationally due to reduced risk premium and trans­ action costs ascribed to those businesses.

• • • • 28 Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note The beneﬁts of the proposed reform are considered to outweigh the costs of its implementation.
The reform is estimated to entail a signiﬁcant net direct quantiﬁable cost across industry and government in each of the 2 establishment years of approximately [information deleted in order to maintain the current constitutional conventions protecting the conﬁdentiality of advice tendered by ministers and ofﬁcials] per year.
However, while difﬁcult to quantify, the beneﬁts of introducing and passing legisla­ tion in 2009 are substantial, particularly in terms of protecting New Zealand’s international reputation and associated medium­term trade and other economic objectives.
In year 3, when the reform takes effect, while the net quantiﬁable beneﬁt of the proposed reform could range substantially (between a net cost of $17 million and a net beneﬁt of $59 million per year), over­ all, the beneﬁt of progressing the reform is considered to be substan­ tial to the national interest.
The beneﬁts of the reform, particularly in maintaining New Zealand’s international reputation and the ﬂow­on beneﬁts associated with this, while at this point are unquantiﬁed, are considered substantial and justify progressing the proposed reform.
Steps taken to minimise compliance costs A number of countries have implemented AML/CFT reforms in re­ cent years to comply with the revised FATF Recommendations, and have incurred costs in doing so as there is limited scope for discre­ tion in the FATF Recommendations.
Recognising the limited discre­ tion available in complying with the Recommendations, the proposal will minimise compliance costs by way of an approach that provides for— • a phased implementation, in which ﬁnancial institutions and casinos are covered by the reform in the ﬁrst period, whereas certain non­ﬁnancial institutions (such as the Racing Board and dealers in precious metals and stones) and designated pro­ fessions (such as lawyers and real estate agents) would be covered in a second phase of reform.
These latter groups will be the subject of subsequent Cabinet approval and amendment to the regime and will therefore have a longer period to pre­ pare for new AML/CFT requirements: Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 29 • • • • • the establishment of a supervision framework comprising mul­ tiple existing regulatory agencies (as opposed to a new dedi­ cated agency), that have existing comparable responsibilities and existing relationships with industry sectors for which they will be responsible for AML/CFT.
This beneﬁts industry, by minimising duplication of reporting measures, and ensuring the development of regulation that has beneﬁted from famil­ iarity with sector speciﬁc operating environments, and gov­ ernment, by enabling a single agency to undertake multiple functions in relation to a reporting entity or sector: following from the above point, to ensure that a co­ordinated approach to supervision and regulation is taken, a robust gov­ ernance arrangement is proposed, comprising a legislated op­ erational co­ordination committee, and strategic oversight and monitoring being co­ordinated by the Ministry of Justice: a risk based approach to implementation, so that the resources of reporting entities and supervisors can be concentrated on higher risk situations and saved in lower risk situations: based on the proposed risk assessment exercise, identiﬁcation of areas where it might be justiﬁable for New Zealand to aim for a lower cost approach to some low risk activities and cus­ tomer types: collaboration with industry on developing detailed regulatory provisions.
Implementation and review Provided the proposed legislative reform receives assent by October 2009, the new regulatory regime would be brought into force 2 years after legislation is passed.
The 2­year lead time is to provide for— • supervisors and other agencies to increase their capacities and capabilities to undertake additional AML/CFT functions: the Ministry of Justice, in consultation with supervisors, the FIU, and other agencies to ﬁnalise any necessary regulations: supervisors and other agencies to develop guidance materials (enforceable and non­enforceable) and to work with report­ ing entities so that all are aware of their AML/CFT regulatory obligations and of what they must do to achieve compliance: • • 30 • Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note reporting entities to make necessary adjustments and additions to their internal systems and procedures so that they are able to achieve compliance.
A phased approach is also provided for implementation, whereby the regulatory requirements will initially apply to ﬁnancial institutions and casinos, with a second phase of businesses being brought under the regime at a later date.

This will initially mean that New Zealand will not be compliant with FATF Recommendations with respect to these entities.
The Ministry of Justice will monitor and evaluate the overall per­ formance and effectiveness of the new regulatory system, and advise the Minister of Justice on any issues with its performance and options for addressing any such issues.
Consultation The proposals for a new AML/CFT regulatory system were devel­ oped in consultation with the Ministry of Economic Development, the Department of Internal Affairs, the Financial Intelligence Unit of the New Zealand Police, the Customs Service, the Inland Revenue Department, the State Services Commission, the Treasury, the Min­ istry of Foreign Affairs and Trade, the Reserve Bank of New Zealand, and the Securities Commission.
The Department of the Prime Min­ ister and Cabinet has been informed of the proposals.

Financial services providers and members of the public were con­ sulted on the proposals as they were developed.
Five consultation documents have been issued for public comment— • “Money Laundering and New Zealand’s Compliance with FATF Recommendations” released in August 2005: a second document entitled “Anti­Money Laundering and Countering the Financing of Terrorism: New Zealand’s Com­ pliance with FATF Recommendations” released in June 2006: a third discussion document entitled “Anti­Money Launder­ ing and Countering the Financing of Terrorism Supervisory Framework” released in October 2006.
• • About 30 submissions from mainly ﬁnancial institutions and their representatives were received on each of the consultations and in­ corporated into the policy development.
Submitters were also pro­ vided with the opportunity to comment on ofﬁcials’ consideration Explanatory note Anti­Money Laundering and Countering Financing of Terrorism Bill 31 of their submissions and regular meetings were held with businesses and industry associations during the different phases of consultation and policy development.
Key issues raised by submitters included— • supervisory framework—While some indicated support for a single supervisor on the basis of consistency and effectiveness, the majority favoured the multi­supervisor model to minimise compliance associated with duplication of reporting measures.
The proposal seeks to manage disadvantages of a multi­super­ visory model through the establishment of a national co­ordin­ ation committee to manage operational co­ordination of the regime, and the provision of mechanisms to designate respon­ sibility where multi­supervisory responsibilities become ap­ parent: that the framework be appropriate to New Zealand’s broader ﬁnancial framework, and compatible with international AML/CFT frameworks (particularly that of Australia).
These objectives have been key criteria guiding the policy develop­ ment: support for a risk based approach, provided the approach is supported by regulators with appropriate expectations and guidance provided, particularly for small and medium enterprises.

Regulators would inform and provide feedback to businesses about the risk environment, and regulatory expectations.
The proposed legislation also provides for the establishment of codes of practice setting out good practice interpretation of legislative requirements.

A key goal for the codes is to provide regulatory certainty to reporting entities in areas where uncertainty exists.

Codes would provide a legal defence against prosecution but would not be mandatory; reporting entities would have the ﬂexibility to either follow a relevant code or develop their own AML/CFT programme as per their statutory responsibilities.
• • In addition, in response to requests from submitters— • an independent compliance cost estimation was undertaken in 2008 to assess the start­up and ongoing costs across affected sectors (discussed in the cost beneﬁt section above); and 32 • Anti­Money Laundering and Countering Financing of Terrorism Bill Explanatory note a draft Bill setting out key elements of the proposal was re­ leased in October 2008 for comment.
Feedback on the compliance cost estimation and exposure draft of legislation has been incorporated into the development of the policy proposal.
Hon Simon Power Anti­Money Laundering and Countering Financing of Terrorism Bill Government Bill Contents Title Commencement Part 1 Preliminary provisions Purpose Interpretation Amounts not in New Zealand currency Act binds the Crown Part 2 AML/CFT requirements and compliance Non­compliance not excused by contractual obligations Subpart 1—Customer due diligence Deﬁnitions Customer due diligence Reliance on risk assessment when establishing level of risk Basis for verifying identity Standard customer due diligence Circumstances when standard customer due diligence applies 46—1 Page Anti­Money Laundering and Countering Financing of Terrorism Bill Standard customer due diligence: identity requirements Standard customer due diligence: veriﬁcation of identity requirements Standard customer due diligence: other requirements Simpliﬁed customer due diligence Circumstances when simpliﬁed customer due diligence applies Simpliﬁed customer due diligence: identity requirements Simpliﬁed customer due diligence: veriﬁcation of identity requirements Simpliﬁed customer due diligence: other requirements Enhanced customer due diligence Circumstances when enhanced customer due diligence applies Enhanced customer due diligence: identity requirements Enhanced customer due diligence: veriﬁcation of identity requirements Politically exposed persons Wire transfers: identity requirements Wire transfers: veriﬁcation of identity requirements Correspondent banking relationships New or developing technologies and products that might favour anonymity Ongoing customer due diligence and account monitoring 28 Ongoing customer due diligence and account monitoring Reliance on third parties Reliance on member of designated business group Reliance on other reporting entities or persons in another country Reliance on agents Use of information obtained from third party conducting customer due diligence Protection of personal information and
 designated business groups Prohibitions Prohibitions if customer due diligence not conducted Prohibition on false customer names and customer anonymity Anti­Money Laundering and Countering Financing of Terrorism Bill Prohibition on establishing or continuing business relationship involving shell bank Subpart 2—Suspicious transaction reports Reporting entities to report suspicious transactions Nature of suspicious transaction report Privileged communication deﬁned Auditors may report suspicious transactions Protection of persons reporting suspicious transactions Immunity from liability for disclosure of information relating to money laundering transactions Disclosure of information relating to suspicious transaction reports Disclosure of information in proceedings Disclosure of personal information relating to employees or senior managers Subpart 3—Record keeping Obligation to keep transaction records Obligation to keep identity and veriﬁcation records Obligation to keep other records How records to be kept When records need not be kept Destruction of records Other laws not affected Subpart 4—Compliance with AML/CFT requirements Reporting entity must have AML/CFT programme and AML/CFT compliance ofﬁcer Minimum requirements for AML/CFT programmes Risk assessment Review and audit of risk assessment and AML/CFT programme Annual AML/CFT report Reporting entities to ensure that branches and subsidiaries comply with AML/CFT requirements Subpart 5—Codes of practice Interpretation AML/CFT supervisors to prepare codes of practice for relevant sectors Procedure for approval and publication of codes of practice Anti­Money Laundering and Countering Financing of Terrorism Bill 62 63 64 65 66 67 68 Amendment and revocation of codes
 of practice Proof of codes of practice Legal effect of codes of practice Subpart 6—Cross­border transportation of cash Reports about movement of cash into or out of New Zealand Reports about receipt of cash from outside New Zealand Reporting requirements Information to be forwarded to Commissioner Part 3 Enforcement Subpart 1—General provisions relating to Part Proceedings for civil penalties 69 When and how civil penalty proceedings brought 70 71 72 73 74 75 76 77 Relationship between civil penalty and criminal proceedings Relationship between concurrent civil penalty proceedings and criminal proceedings One penalty only rule Restriction on use of evidence given in civil penalty proceedings Liability of senior managers Criminal liability of senior managers Liability of senior managers to civil penalty How to establish whether senior manager took all reasonable steps Subpart 2—Civil liability Meaning of civil liability act Possible responses to civil liability act Formal warnings 78 Formal warnings Enforceable undertakings Enforceable undertakings Enforcement of undertakings Assessment of compensation for breach of undertakings 79 80 81 4 54 54 55 55 56 56 57 57 58 58 59 59 60 60 61 61 61 62 62 62 Anti­Money Laundering and Countering Financing of Terrorism Bill Injunctions 82 83 84 85 86 87 Powers of High Court not affected Performance injunctions When High Court may grant performance injunctions Restraining injunctions When High Court may grant restraining injunctions and interim injunctions Undertaking as to damages not required by AML/CFT supervisor 88 Pecuniary penalties for civil liability act Pecuniary penalties Subpart 3—Offences Offence and penalties relating to civil liability act 89 Offence and penalties for civil liability act Offences relating to suspicious transaction reports Failing to report suspicious transaction Providing false or misleading information in connection with suspicious transaction report Unlawful disclosure of suspicious transaction
 report Failure to keep or retain adequate records relating to suspicious transaction Obstruction of investigation relating to suspicious transaction report Contravention of section 44(1) Defence Time limit for prosecution of offences relating to civil liability act and suspicious transaction reports Penalties Other offences relating to non­compliance with AML/CFT requirements Structuring transaction to avoid application of AML/CFT requirements Offence to obstruct AML/CFT supervisor Offence to provide false or misleading information to AML/CFT supervisor Time limit for prosecution of offences relating to non­compliance with AML/CFT requirements Penalties Anti­Money Laundering and Countering Financing of Terrorism Bill 104 105 106 107 108 109 110 111 Offences relating to cross­border transportation of cash Failure to report cash over applicable threshold value moved into or out of New Zealand Failure to report cash over applicable threshold value received by person in New Zealand from overseas Structuring cross­border transportation to avoid application of AML/CFT requirements Defence Providing false or misleading information in connection with cash report Offence to obstruct or not to answer questions from Customs ofﬁcer Penalties Chief executive of New Zealand Customs Service may deal with cash reporting offences Relationship with Customs and Excise Act 1996 112 Relationship with Customs and Excise Act 1996 Subpart 4—Search and seizure 113 Deﬁnitions 114 115 116 117 118 119 120 121 122 123 124 Search warrants Search warrant Powers under search warrant Conduct of entry, search, and seizure Assistance with searches Enforcement ofﬁcers to show identity card on request Announcement before entry Details of warrant to be given to occupier Occupier entitled to be present during search Use of electronic equipment Copies of documents seized to be provided Receipts
 for things seized Application of sections 198A and 198B of Summary Proceedings Act 1957 Return and retention of things seized 125 126 Return and retention of things seized Order to retain things seized 6 71 71 71 71 72 72 72 73 73 74 75 76 77 77 77 78 78 78 78 79 79 79 80 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 4 Institutional arrangements and miscellaneous provisions Subpart 1—Institutional arrangements AML/CFT supervisors AML/CFT supervisors Functions Powers 127 128 129 130 Matters relating to conduct of on­site inspections Use and disclosure of information Power to use information obtained as AML/CFT supervisor in other capacity and vice versa Restriction on power to use information under section 131 Power to disclose information supplied or obtained as AML/CFT supervisor Power to use and disclose information supplied or obtained under other enactments for AML/CFT purposes Enforcement ofﬁcers Financial intelligence functions of Commissioner Financial intelligence functions of Commissioner Powers relating to ﬁnancial intelligence functions of Commissioner Delegation of powers of Commissioner Guidelines relating to reporting of suspicious transactions Consultation on proposed guidelines Availability of guidelines Review of guidelines Co­ordination Role of Ministry AML/CFT co­ordination committee Role of AML/CFT co­ordination committee Functions Subpart 2—Miscellaneous provisions Regulations Regulations Regulations relating to application of Act Regulations relating to countermeasures cl 1 150 Anti­Money Laundering and Countering Financing of Terrorism Bill Consultation not required for consolidation of certain regulations and minor amendments Ministerial exemptions 151 Minister may grant exemptions 152 Minister must consult before granting exemption 153 Requirements relating to exemptions
 Transitional and savings provisions 154 Transitional and savings provisions Consequential amendments, repeals, and revocation 155 Amendments to other enactments Schedule 1 Transitional and savings provisions Schedule 2 Consequential amendments 97 97 98 98 98 99 100 101 The Parliament of New Zealand enacts as follows: 1 2 (1) Title This Act is the Anti­Money Laundering and Countering Fi­ nancing of Terrorism Act 2009.
Commencement This Act comes into force on a date to be appointed by the Governor­General by Order in Council.

5 (2) One or more Orders in Council may be made appointing dif­ ferent dates for the commencement of different provisions.
Part 1 Preliminary provisions Purpose The purposes of this Act are— (a) to detect and deter money laundering and the ﬁnancing of terrorism; and 10 15 3 8 4 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 1 cl 4 (b) (c) to maintain and enhance New Zealand’s international reputation by adopting, where appropriate in the New Zealand context, recommendations issued by the Finan­ cial Action Task Force; and to contribute to public conﬁdence in the ﬁnancial sys­ 5 tem.
10 Interpretation In this Act, unless the context otherwise requires,— AML/CFT means anti­money laundering and countering the ﬁnancing of terrorism AML/CFT programme means a compliance programme es­ tablished under section 53(1) AML /CFT requirements means the requirements set out in Part 2 AML/CFT supervisor, in relation to a reporting entity, means 15 the person referred to in section 127(1) that is responsible for supervising the reporting entity under Parts 3 and 4 applicable threshold value means the threshold value that— (a) (b) is prescribed in regulations; and applies to a particular person, class of persons, transac­ 20 tion, class of transactions, ﬁnancial activity, or class of ﬁnancial activities prescribed in regulations a bill of exchange; or a cheque; or a promissory note; or a bearer bond; or a traveller’s cheque; or a money order, postal order, or similar order; or any other instrument prescribed by regulations bearer­negotiable instrument means— (a) (b) (c) (d) (e) (f) (g) beneﬁcial owner means the individual who― (a) has effective control of a customer or person on whose behalf a transaction is conducted; or owns a prescribed threshold of the customer or person on whose behalf a transaction is conducted (b) beneﬁciary institution, in relation to an electronic transfer of funds from an ordering institution, means any person who 9 25 30 35 Part 1 cl 4 Anti­Money Laundering and Countering Financing of Terrorism Bill 10 physical currency: bearer­negotiable instruments crediting it to an account held by the payee; or paying it to the payee receives those funds and then makes those funds available to a person (the payee) by— (a) (b) business relationship means a business, professional, or com­ 5 mercial relationship between a reporting entity and a customer that has an element of duration or that is expected by the re­ porting entity, at the time when contact is established, to have an element of duration cash means— (a) (b) cash report means a report made under subpart 6 of Part 2 casino means the
 holder of a casino operator’s licence under the Gambling Act 2003 chief executive means the chief executive of the Ministry civil liability act has the meaning set out in section 76 Commissioner means the Commissioner of Police constable has the same meaning as in section 4 of the Policing Act 2008 control of the Customs has the same meaning as in section 20 of the Customs and Excise Act 1996, except that, for the purposes of this Act, references in that section to goods are to be read as if they were references to cash correspondent banking relationship has the meaning set out 25 in section 26(3) country includes any State, territory, province, or other part of a country customer— (a) means a new customer or an existing customer; and (b) 15 30 20 includes— (i) (ii) a facility holder: a person conducting or seeking to conduct an oc­ casional transaction through a reporting entity: a junket organiser as deﬁned in section 4(1) of the 35 Gambling Act 2003: (iii) 10 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 1 cl 4 (iv) a person or class of persons declared by regula­ tions to be a customer for the purposes of this Act; but (c) excludes a person or class of persons that is declared by regulations not to be a customer for the purposes of this 5 Act Customs ofﬁcer has the same meaning as in section 2(1) of the Customs and Excise Act 1996 designated business group means a group of 2 or more per­ sons where— (a) (b) at least 1 member of the group is a reporting entity; and each member of the group has elected, in writing, to be a member of the group and the election is in force; and each election was made in accordance with the regula­ tions (if any); and no member of the group is a member of another desig­ nated business group; and each member of the group is— (i) (c) (d) (e) 10 15 (B) related to each other member of the group within the meaning of section 2(3) of the Companies Act 20 1993 and is— (A) a reporting entity resident in New Zealand;
 or a person that is resident in another coun­ try with sufﬁcient anti­money laundering 25 and countering the ﬁnancing of terrorism systems and is supervised or regulated for anti­money laundering and countering the ﬁnancing of terrorism purposes; or (ii) (iii) providing a service under a joint venture agree­ 30 ment, to which each member of the group is a party; or a government department named in Schedule 1 of the State Sector Act 1988, a State enterprise under the State­Owned Enterprises Act 1986, or 35 a Crown entity under section 7 of the Crown En­ tities Act 2004; or 11 Part 1 cl 4 Anti­Money Laundering and Countering Financing of Terrorism Bill (iv) related to the entities in subparagraph (iii) through the provision of common products or services; and (f) each member of the group satisﬁes any conditions that may be prescribed by regulations and that apply to that 5 member existing customer, in relation to a reporting entity, means a person who was in a business relationship with the reporting entity immediately before the commencement of Part 2 facility— (a) means any account or arrangement— (i) (ii) that is provided by a reporting entity; and through which a facility holder may conduct 2 or more transactions; and (b) without limiting paragraph (a), includes— a life insurance policy: (i) (ii) membership of a superannuation scheme: (iii) the provision, by a reporting entity, of facilities for safe custody, including (without limitation) a safety deposit box: an account or arrangement declared by regula­ tions to be a facility for the purposes of this Act; but (iv) 10 15 20 (c) excludes an account or arrangement declared by regu­ lations not to be a facility for the purposes of this Act 25 facility holder, in relation to a facility,— (a) means the person in whose name the facility is estab­ (b) (c) lished; or if that facility is a life insurance policy, means any per­ son who for the time being is the legal holder of that 30 policy; or if that facility consists
 of membership of a superannu­ ation scheme, means any person who is a member of the scheme within the meaning of member in section 2(1) of the Superannuation Schemes Act 1989 35 ﬁnancial institution— (a) means a person who, in the ordinary course of business, carries on 1 or more of the following ﬁnancial activities: 12 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 1 cl 4 (i) (ii) accepting deposits or other repayable funds from the public: lending to or for a customer, including consumer credit, mortgage credit, factoring (with or with­ out recourse), and ﬁnancing of commercial trans­ 5 actions (including forfeiting): (iii) ﬁnancial leasing (excluding ﬁnancial leasing ar­ (iv) (v) (vi) (vii) 10 rangements in relation to consumer products): transferring money or value for, or on behalf of, a customer: issuing or managing the means of payment (for example, credit or debit cards, cheques, trav­ eller’s cheques, money orders, bankers’ drafts, or electronic money): undertaking ﬁnancial guarantees and commit­ 15 ments: trading for the person’s own account or for the accounts of customers in any of the following: (A) money market instruments (for example, (B) (C) cheques, bills, certiﬁcates of deposit, or 20 derivatives): foreign exchange: exchange, interest rate, or index instru­ ments: transferable securities: commodity futures trading: (viii) participating in securities issues and the provi­ sion of ﬁnancial services related to those issues: (D) (E) 25 (ix) managing individual or collective portfolios: (x) safe keeping or administering of cash or liquid 30 securities on behalf of other persons: investing, administering, or managing funds or money on behalf of other persons: (xi) (xii) underwriting or placement of life insurance or other investment related insurance: 35 (b) (xiii) money or currency changing; and includes a person or class of persons declared by regu­ lations to be a ﬁnancial institution for the purposes of this Act; but 13 Part
 1 cl 4 Anti­Money Laundering and Countering Financing of Terrorism Bill (c) excludes a person or class of persons declared by regu­ lations not to be a ﬁnancial institution for the purposes of this Act ﬁnancing of terrorism has the same meaning as in section 4(1) of the Terrorism Suppression Act 2002 gambling inspector has the same meaning as in section 4(1) of the Gambling Act 2003 government agency means— (a) a government department named in Schedule 1 of the State Sector Act 1988; or a Crown entity under section 7 of the Crown Entities Act 2004; or the Reserve Bank, the Parliamentary Counsel Ofﬁce, the New Zealand Police, and the New Zealand Security Intelligence Service; or any international counterpart of the entities in para­ graphs (a) to (c) (b) (c) (d) 5 10 15 identity information means information obtained under sections 13, 17, 21, and 24(1) and (2) and any other in­ formation relating to identity prescribed by sections 23(b), 20 26(2)(g), and 27(b) individual means a natural person, other than a deceased nat­ ural person intermediary institution, in relation to a wire transfer, is a person that participates in a transfer of funds that takes place 25 through more than 1 institution but is not an ordering institu­ tion or a beneﬁciary institution law enforcement purposes means— the administration of this Act: (a) the detection, investigation, and prosecution of— (b) (i) (ii) (iii) (iv) any offence under this Act; and a money laundering offence; and any offence under the Income Tax Act 2007; and any serious offence (within the meaning of sec­ tion 243(1) of the Crimes Act 1961): 35 30 (c) (d) the enforcement of the Proceeds of Crime Act 1991 or the Criminal Proceeds (Recovery) Act 2009: the enforcement of the Misuse of Drugs Act 1975: 14 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 1 cl 4 (e) (f) (g) the enforcement of the Terrorism Suppression Act 2002: the administration of the Mutual Assistance in Criminal Matters Act 1992: the
 investigation of matters relating to security under the New Zealand Security Intelligence Service Act 5 1969 Minister means the Minister who is, with the authority of the Prime Minister, for the time being responsible for the admin­ istration of this Act Ministry means the department of State that, with the author­ 10 ity of the Prime Minister, is for the time being responsible for the administration of this Act money laundering offence means an offence against section 243 of the Crimes Act 1961 or section 12B of the Misuse of Drugs Act 1975 or any act committed overseas that, if commit­ 15 ted in New Zealand, would be an offence under those sections of those Acts occasional transaction— (a) means a transaction that is over the applicable threshold (b) (c) value (whether the transaction is carried out in a single 20 operation or several operations that appear to be linked); and includes a transaction or class of transactions declared by regulations to be an occasional transaction for the purposes of this Act; but excludes— (i) (ii) cheque deposits; and a transaction or class of transactions declared by regulations not to be an occasional transaction for the purposes of this Act 30 25 ordering institution— (a) means any person who has been instructed by a person (the payer) to electronically transfer funds controlled by the payer to a person (the payee) who may or may not be the payer on the basis that the transferred funds 35 will be made available to the payee by a beneﬁciary institution; and includes a person declared by regulations to be an order­ ing institution for the purposes of this Act; but (b) 15 Part 1 cl 4 Anti­Money Laundering and Countering Financing of Terrorism Bill (c) excludes a person or class of persons declared by regu­ lations not to be an ordering institution for the purposes of this Act physical currency means the coin and printed money (whether of New Zealand or of a foreign country) that— (a) (b) is designated as legal tender; and circulates
 as, and is customarily used and accepted as, a medium of exchange in the country of issue Police employee has the same meaning as in section 4 of the Policing Act 2008 politically exposed person means— (a) an individual who holds in New Zealand the prominent public function of— (i) Prime Minister; or (ii) Minister of the Crown; or (iii) (iv) Governor of the Reserve Bank of New Zealand; Judge of the Supreme Court; or or ambassador or high commissioner; or (v) (vi) Chief of Defence Force; or (vii) board chair, chief executive, or chief ﬁnancial ofﬁcer of any State enterprise as deﬁned by the State­Owned Enterprises Act 1986; and an individual who holds in any other country the promi­ nent public function of— (i) Head of State or head of a country or government; or government minister or equivalent senior politi­ cian; or (ii) (iii) Supreme Court Judge or equivalent senior Judge; 30 or governor of a central bank or any other position that has comparable inﬂuence to the Governor of the Reserve Bank of New Zealand; or senior foreign representative, ambassador, or 35 high commissioner; or high­ranking member of the armed forces; or (iv) (v) (vi) (b) 16 (c) (d) Anti­Money Laundering and Countering Financing of Terrorism Bill Part 1 cl 4 (vii) board chair, chief executive, or chief ﬁnancial of­ ﬁcer of, or any other position that has comparable inﬂuence in, any State enterprise; and an immediate family member of a person referred to in paragraph (a) or (b), including— (i) (ii) a spouse; or a partner, being a person who is considered by the relevant national law as equivalent to a spouse; or a child and the child’s spouse or partner; or a parent; and (iii) (iv) having regard to information that is public or readily available,— (i) any individual who is known to have joint bene­ ﬁcial ownership of a legal entity or legal arrange­ ment, or any other close relationship, with a per­ 15 son referred to in paragraph (a) or (b); or any individual who has sole
 beneﬁcial owner­ ship of a legal entity or legal arrangement that is known to exist for the beneﬁt of a person referred to in paragraph (a) or (b) 20 (ii) 5 10 registered bank has the same meaning as in section 2(1) of the Reserve Bank of New Zealand Act 1989 regulations means regulations made under this Act reporting entity means— (a) (b) (c) a ﬁnancial institution; or a casino; or any other person that is required by any enactment to comply with this Act as if it were a reporting entity security has the same meaning as in section 2(1) of the New Zealand Security Intelligence Service Act 1969 senior manager (and senior management correspondingly) means,— (a) in relation to a reporting entity that is a company, a dir­ ector within the meaning of section 126 of the Compan­ ies Act 1993; and in relation to a reporting entity that is not a company, a person who occupies a position comparable to that of a director (for example, a trustee or partner); and (b) 25 30 35 17 Part 1 cl 4 Anti­Money Laundering and Countering Financing of Terrorism Bill (c) any other person who occupies a position within a re­ porting entity that allows that person to exercise an in­ ﬂuence over the management or administration of the reporting entity (for example, a chief executive or a chief ﬁnancial ofﬁcer) 5 10 shell bank has the meaning set out in section 36(2) suspicious property report has the same meaning as in sec­ tion 4(1) of the Terrorism Suppression Act 2002 suspicious transaction report means a report made under section 37 transaction— (a) means any deposit, withdrawal, exchange, or transfer of funds (in any denominated currency), whether— (i) (ii) in cash; or by cheque, payment order, or other instrument; 15 or by electronic or other non­physical means; and (iii) (b) without limiting paragraph (a), includes— (c) (i) (ii) any payment made in satisfaction, in whole or in part, of any contractual or other legal obligation; 20 and a transaction or class of transactions declared by
 regulations to be a transaction for the purposes of this Act; but excludes the following: (i) (ii) the placing of any bet: participation in gambling as deﬁned in section 4(1) of the Gambling Act 2003: a transaction or class of transactions declared by regulations not to be a transaction for the pur­ 30 poses of this Act (iii) 25 trustee has the same meaning as in section 2(1) of the Trustee Act 1956 veriﬁcation information means information obtained under sections 14, 18, 22, and 25 wire transfer— (a) means a transaction carried out on behalf of a person (the originator) through a reporting entity by electronic 35 18 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 1 cl 5 (b) (c) means with a view to making an amount of money avail­ able to a beneﬁciary (who may also be the originator) at another ﬁnancial institution; and includes a transfer or transaction, or class of transfers or transactions, declared by regulations to be a wire trans­ 5 fer for the purposes of this Act; but excludes— (i) transfers and settlements between ﬁnancial insti­ tutions if both the originator and the beneﬁciary are ﬁnancial institutions acting on their own be­ 10 half; and credit and debit card transactions if the credit or debit card number accompanies the transaction; and any other transfer or transaction or class of trans­ 15 fers or transactions declared by regulations not to be a wire transfer for the purposes of this Act.
(ii) (iii) 5 (1) (2) (3) Amounts not in New Zealand currency This section applies if, for the purposes of this Act, it is neces­ sary to determine whether the amount of any cash (whether 20 alone or together with any other amount of cash)— (a) (b) exceeds the applicable threshold value; and is denominated in a currency other than New Zealand currency.
If this section applies, the amount of the cash is taken to be the 25 equivalent in New Zealand currency,— (a) calculated at the rate of exchange on the date of the determination; or if there is more than 1 rate of exchange on that date, calculated at the average of those rates.
(b) 30 For the purposes of this section, a written certiﬁcate purport­ ing to be signed by an ofﬁcer of any bank in New Zealand that a speciﬁed rate of exchange prevailed between currencies on a speciﬁed day, and that at such rate a speciﬁed sum in a par­ ticular currency is equivalent to a speciﬁed sum in terms of the 35 currency of New Zealand, is sufﬁcient evidence of the rate of 19 Part 1 cl 6 Anti­Money Laundering and Countering Financing of Terrorism Bill exchange so prevailing and of the equivalent sums in terms of the respective currencies.
Compare: 1996 No 9 s 4 6 Act binds the Crown This Act binds the Crown.

5 Part 2 AML/CFT requirements and compliance 7 (1) Non­compliance not excused by contractual obligations This Act has effect despite anything to the contrary in any contract or agreement.

10 (2) No person is excused from compliance with any requirement of this Act or the regulations by reason only that compliance with that requirement would constitute breach of any contract or agreement.
8 Subpart 1—Customer due diligence 15 Deﬁnitions In this subpart, unless the context otherwise requires,— enhanced customer due diligence means customer due dili­ gence in accordance with the requirements set out in sections 21 to 27 and any other requirements prescribed by regulations 20 simpliﬁed customer due diligence means customer due dili­ gence in accordance with the requirements set out in sections 17 to 19 and any other requirements prescribed by regulations standard customer due diligence means customer due dili­ gence in accordance with the requirements set out in sections 25 13 to 15 and any other requirements prescribed by regula­ tions.
Customer due diligence 9 (1) A reporting entity must conduct customer due diligence on— (a) (b) (c) a customer: any beneﬁcial owner of a customer: any person acting on behalf of a customer.
30 20 (2) (3) 10 11 12 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 12 For the purposes of subsection (1)(b), a customer who is an individual and who the reporting entity believes on reason­ able grounds is not acting on behalf of another person is to be treated as if he or she were also the beneﬁcial owner unless the reporting entity has reasonable grounds to suspect that that 5 customer is not the beneﬁcial owner.
The type of customer due diligence that must be conducted by a reporting entity is,— (a) in the circumstances described in section 12, at least standard customer due diligence: in the circumstances described in section 16, at least simpliﬁed customer due diligence: in the circumstances described in section 20, enhanced customer due diligence.
(b) (c) 10 Reliance on risk assessment when establishing level of risk 15 When establishing the level of risk involved for the purposes of this subpart, a reporting entity must rely on its risk assess­ ment undertaken in accordance with sections 54(c) and (f) and 55.
Basis for verifying identity Veriﬁcation of identity must be done on— (a) (b) the basis of documents, data, or information obtained from a reliable and independent source; or any other basis applying to a speciﬁed situation, cus­ tomer, product, service, business relationship, or trans­ 25 action prescribed by regulations.
20 Standard customer due diligence Circumstances when standard customer due diligence applies A reporting entity must conduct standard customer due dili­ 30 gence in the following circumstances: (a) if the reporting entity establishes a business relationship with a new customer: if a customer seeks to conduct an occasional transaction through the reporting entity: (b) 35 21 Part 2 cl 13 Anti­Money Laundering and Countering Financing of Terrorism Bill (c) (d) (e) if, in relation to any customer, the reporting entity sus­ pects that money laundering or ﬁnancing of terrorism may be involved: if, in relation to any customer, the reporting entity sus­ pects on reasonable grounds that the customer is not 5 who he or she claims to be: if, in relation to an existing customer,— (i) (ii) (iii) (iv) there has been a change in the nature or purpose of the business relationship; or doubt arises as to the adequacy or veracity of 10 documents, data, or information previously ob­ tained for the purposes of identiﬁcation or veri­ ﬁcation of the customer, the beneﬁcial owner, or the person who is acting, or who has acted, on behalf of the customer, as the case may be; or the reporting entity suspects that a transaction the customer is seeking to conduct may involve money laundering or the ﬁnancing of terrorism; or the reporting entity considers that, according to 20 the level of risk involved, it has insufﬁcient in­ formation about the customer: 15 (f) any other circumstances speciﬁed in regulations.
Standard customer due diligence: identity requirements A reporting entity must obtain the following identity informa­ 25 tion in relation to the persons referred to in section 9(1): (a) (b) (c) the person’s full name; and the person’s date of birth; and if the person is not the customer, the person’s relation­ ship to the customer; and the person’s address or registered ofﬁce; and the person’s company identiﬁer or registration number; and any information prescribed by regulations; and any other information that, according to the level of risk 35 involved, could reasonably be obtained.
(d) (e) (f) (g) 30 13 22 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 15 14 Standard customer due diligence: veriﬁcation of identity requirements (1) A reporting entity must, according to the level of risk in­ volved,— (a) 10 (c) (b) take all reasonable steps to satisfy itself that the infor­ 5 mation provided under section 13 is current and cor­ rect; and take all reasonable steps to verify any beneﬁcial owner’s identity so that the reporting entity is satisﬁed that it knows who the beneﬁcial owner is; and if a person is acting on behalf of the customer, verify both the customer’s and the person’s identity and that person’s authority to act on behalf of the customer so that the reporting entity is satisﬁed it knows who the person is and that the person has authority to act on 15 behalf of the customer; and (d) verify any other information prescribed by regulations.
Except as provided in subsection (3), a reporting entity must carry out veriﬁcation of identity before establishing a business relationship or conducting an occasional transaction.
(3) Veriﬁcation of identity may be completed after the business relationship has been established or the occasional transaction conducted if— (a) it is essential not to interrupt normal business practice; and (2) 25 20 (b) money laundering and ﬁnancing of terrorism risks are effectively managed through procedures of transaction limitations and account monitoring; and veriﬁcation of identity is completed within 5 days of the business relationship being established or the occa­ 30 sional transaction being conducted.
(c) 15 Standard customer due diligence: other requirements A reporting entity must also obtain— (a) information on the nature and purpose of the proposed business relationship between the customer and the re­ 35 porting entity; and 23 Part 2 cl 16 Anti­Money Laundering and Countering Financing of Terrorism Bill (b) sufﬁcient information to determine whether the cus­ tomer should be subject to enhanced customer due dili­ gence.
Simpliﬁed customer due diligence 16 Circumstances when simpliﬁed customer due diligence applies 5 10 (c) (b) (1) A reporting entity may conduct simpliﬁed customer due dili­ gence if it establishes a business relationship with one of the following customers or one of the following customers con­ ducts an occasional transaction through the reporting entity: (a) a company that is listed on an exchange registered under Part 2B of the Securities Markets Act 1988: a government department named in Schedule 1 of the State Sector Act 1988: a local government organisation as deﬁned in section 15 124 of the Local Government Act 2002: the New Zealand Police: the New Zealand Security Intelligence Service Act 1969: any other entity speciﬁed in regulations.
(2) A reporting entity may also conduct simpliﬁed customer due diligence on a person who purports to act on behalf of a cus­ tomer when— (a) (d) (e) 20 (f) the reporting entity already has a business relationship with the customer at the time the person acts on behalf 25 of the customer; and the reporting entity has conducted one of the speciﬁed types of customer due diligence on the customer in ac­ cordance with this Act and the regulations (if any).
(b) Simpliﬁed customer due diligence: identity requirements A reporting entity must obtain the following identity informa­ tion in relation to a person acting on behalf of the customer: (a) (b) (c) (d) the person’s full name; and the person’s date of birth; and the person’s relationship to the customer; and any information prescribed by regulations; and 30 35 17 24 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 20 (e) any other information that, according to the level of risk involved, could reasonably be obtained.
18 Simpliﬁed customer due diligence: veriﬁcation of identity requirements (1) A reporting entity must, according to the level of risk involved, 5 verify the identity of a person acting on behalf of a customer and that person’s authority to act for the customer so that it is satisﬁed it knows who the person is and that the person has authority to act on behalf of the customer.
(3) (2) Veriﬁcation of identity must be carried out before the business 10 relationship is established or the occasional transaction is con­ ducted or the person acts on behalf of the customer.

For the purposes of verifying a person’s authority to act in the circumstances described in section 16, a reporting entity may rely on an authority provided in an application form or 15 other document provided to the reporting entity that shows a person’s authority to act or transact on an account.
19 Simpliﬁed customer due diligence: other requirements A reporting entity must also obtain— (a) information on the nature and purpose of the proposed 20 business relationship between the customer and the re­ porting entity; and sufﬁcient information to determine whether the cus­ tomer should be subject to enhanced customer due dili­ gence.
25 (b) Enhanced customer due diligence 20 Circumstances when enhanced customer due diligence applies (1) A reporting entity must conduct enhanced customer due dili­ gence in accordance with sections 21 and 22 in the follow­ 30 ing circumstances: (a) if the reporting entity establishes a business relation­ ship with a customer or if a customer seeks to conduct an occasional transaction through the reporting entity and that customer is— 35 25 Part 2 cl 20 Anti­Money Laundering and Countering Financing of Terrorism Bill (i) (ii) (iii) a trust or another vehicle for holding personal assets: a non­resident customer from a country that has insufﬁcient anti­money laundering or countering ﬁnancing of terrorism systems or measures in 5 place: a company with nominee shareholders or shares in bearer form: if a customer seeks to conduct, through the reporting en­ tity, a complex, unusually large transaction or unusual 10 pattern of transactions that have no apparent or visible economic or lawful purpose: when a reporting entity considers that the level of risk involved is such that enhanced due diligence should ap­ ply to a particular situation: any other circumstances speciﬁed in regulations.
15 (b) (c) (d) (2) A reporting entity must conduct enhanced customer due dili­ gence in accordance with sections 21, 22, and 23 if it es­ tablishes a business relationship with a customer who is a po­ litically exposed person or if a customer who is a politically 20 exposed person seeks to conduct an occasional transaction through the reporting entity.
(3) A reporting entity must conduct enhanced customer due dili­ gence in accordance with section 24 if it is an ordering insti­ tution, an intermediary institution, or a beneﬁciary institution 25 in relation to a wire transfer.

(4) A reporting entity must conduct enhanced customer due dili­ gence in accordance with section 26 if it has, or proposes to have, a correspondent banking relationship.
(5) A reporting entity must conduct enhanced due diligence in ac­ 30 cordance with sections 21, 22, and 27 if it establishes a business relationship with a customer, or if a customer seeks to conduct an occasional transaction through the reporting en­ tity, that involves new or developing technologies and prod­ ucts that might favour anonymity.
35 26 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 22 21 Enhanced customer due diligence: identity requirements In relation to a person referred to in section 9(1), a reporting entity must obtain the information required under section 13 and the following additional information: (a) information relating to the source of the funds or the 5 wealth of the customer; and any other information prescribed by regulations.
(b) 22 Enhanced customer due diligence: veriﬁcation of identity requirements (1) A reporting entity must, according to the level of risk in­ 10 volved,— (a) take all reasonable steps to satisfy itself that the infor­ mation provided under section 21 is current and cor­ rect; and take all reasonable steps to verify any beneﬁcial owner’s 15 identity so that the reporting entity is satisﬁed that it knows who the beneﬁcial owner is; and if a person is acting on behalf of the customer, verify the customer’s identity and the identity of the person acting on behalf of the customer in accordance with section 20 21 and that person’s authority to act on behalf of the cus­ tomer, so that the reporting entity is satisﬁed it knows who the person is and that the person has authority to act on behalf of the customer; and take all reasonable steps to verify the source of wealth 25 or funds of the customer; and verify any other information prescribed by regulations or required by codes of practice.
(b) (c) (d) (e) (2) Except as provided in subsection (3), a reporting entity must carry out veriﬁcation of identity before establishing a business 30 relationship or conducting an occasional transaction.
(3) Veriﬁcation of identity may be completed after the business relationship has been established or the occasional transaction conducted if— (a) it is essential not to interrupt normal business practice; 35 and 27 Part 2 cl 23 Anti­Money Laundering and Countering Financing of Terrorism Bill (b) money laundering and ﬁnancing of terrorism risks are effectively managed through procedures of transaction limitations and account monitoring; and veriﬁcation of identity is completed within 5 days of the business relationship being established or the occa­ 5 sional transaction being conducted.
(c) 23 Politically exposed persons Before a reporting entity establishes a business relationship or conducts an occasional transaction that involves a customer or a beneﬁcial owner who is a politically exposed person, the 10 reporting entity must, in addition to the requirements in sec­ tions 21 and 22,— (a) have approval from its senior management for estab­ lishing the business relationship in accordance with the regulations (if any); and 15 (b) meet any other requirements prescribed by regulations and that apply to politically exposed persons.
24 Wire transfers: identity requirements (1) A reporting entity that is an ordering institution must iden­ (c) tify the originator of a wire transfer that is over the applicable 20 threshold value by obtaining the following information: (a) (b) the originator’s full name; and the originator’s account number or other identifying in­ formation that may be prescribed and allows the trans­ action to be traced back to the originator; and one of the following: (i) (ii) (iii) (iv) any information prescribed by regulations; and any other information that, according to the level of risk involved, could reasonably be obtained.
(2) However, if the wire transfer is a domestic wire transfer, a the originator’s address: the originator’s national identity number: the originator’s customer identiﬁcation number: the originator’s place and date of birth; and 25 30 (d) (e) reporting entity that is an ordering institution may identify 35 the originator by obtaining the originator’s account number or other identifying information that may be prescribed and al­ 28 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 25 lows the transaction to be traced back to the originator if the reporting entity that is the ordering institution is able to pro­ vide the information speciﬁed in subsection (1)(a) and (c) to (e) within 3 working days of a request being made by the beneﬁciary institution.
Regulations may be made under section 147(g) exempting the reporting entity from the obligation to obtain some or all of the information set out in subsection (1) in relation to a speciﬁed transfer or transaction.

The information obtained by the reporting entity (the ordering 10 institution under subsection (1) or (2), as the case may be) must accompany the wire transfer.
5 (3) (4) (5) A reporting entity that is a beneﬁciary institution must take all practicable steps to ensure that the information speciﬁed in subsection (1) or (2), as the case may be, accompanies the 15 wire transfer.
(6) A reporting entity that is an intermediary institution must transfer the information speciﬁed in subsection (1) to the next reporting entity in the chain unless it has a reasonable belief that the ﬁnal destination of the wire transfer is to a 20 beneﬁciary institution resident in New Zealand, in which case it may transfer the information speciﬁed in subsection (2).
For the purposes of this section, a domestic wire transfer is a wire transfer where the ordering institution, the intermedi­ ary institution, and the beneﬁciary institution are all in New 25 Zealand.
(7) 25 Wire transfers: veriﬁcation of identity requirements (1) The ordering institution must, according to the level of risk involved,— (a) verify the originator’s identity so that the reporting en­ 30 tity is satisﬁed that the information provided under sec­ tion 24 is current and correct; and verify any other information prescribed by regulations.

(2) Veriﬁcation of the originator’s identity must be carried out be­ (b) fore the wire transfer is ordered.
35 29 Part 2 cl 26 Anti­Money Laundering and Countering Financing of Terrorism Bill Correspondent banking relationships 26 (1) A ﬁnancial institution (the correspondent) that has, or pro­ poses to have, a correspondent banking relationship with a re­ spondent ﬁnancial institution (the respondent) must, accord­ ing to the level of risk involved, conduct enhanced customer 5 due diligence as set out in subsection (2) in relation to cor­ respondent accounts that are used for payments to, or receipts from, foreign ﬁnancial institutions.
The correspondent must— (a) (2) (b) (c) (d) (e) (f) gather enough information about the respondent to 10 understand fully the nature of the respondent’s busi­ ness; and determine from publicly available information the repu­ tation of the respondent and whether and to what extent the respondent is supervised for AML/CFT purposes, 15 including whether the respondent has been subject to a money laundering or ﬁnancing of terrorism investiga­ tion or regulatory action; and assess the respondent’s anti­money laundering and countering ﬁnancing of terrorism controls to ascertain 20 that those controls are adequate and effective; and have approval from its senior management before estab­ lishing a new correspondent banking relationship; and document the respective AML/CFT responsibilities of the correspondent and the respondent; and be satisﬁed that, in respect of those of the respondent’s customers who have direct access to accounts of the correspondent, the respondent― (i) 25 has veriﬁed the identity of, and conducts ongoing monitoring in respect of, those customers; and is able to provide to the correspondent, on re­ quest, the documents, data, or information ob­ tained when conducting the relevant customer due diligence and ongoing customer due dili­ gence; and 30 35 (ii) (g) meet any other requirements prescribed by regulations and that apply to correspondent banking relationships.
For the purposes of this Act, a correspondent banking re­ lationship means a relationship that involves the provision of (3) 30 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 28 banking services by a ﬁnancial institution (the correspondent) to another ﬁnancial institution (the respondent) if— (a) the correspondent carries on an activity or business at or through a permanent establishment of the correspon­ dent in a particular country; and the respondent carries on an activity or business at or through a permanent establishment of the respondent in another country; and the correspondent banking relationship relates, in whole or in part, to those permanent establishments; and the relationship is not of a kind speciﬁed in regulations; and the banking services are not of a kind speciﬁed in regu­ lations.
(b) (c) (d) (e) 5 10 27 15 New or developing technologies and products that might favour anonymity Before a reporting entity establishes a business relationship or conducts an occasional transaction that involves new or devel­ oping technologies and products that might favour anonymity, the reporting entity must, in addition to the requirements in 20 sections 21 and 22,— (a) take any additional measures that may be needed to pre­ vent any new or developing technologies and products from being used in the commission of a money launder­ ing offence or for the ﬁnancing of terrorism; and (b) meet any other requirements prescribed by regulations and that apply to the particular technology or product.
25 Ongoing customer due diligence and account monitoring 28 (1) Ongoing customer due diligence and account monitoring This section applies to a business relationship between a re­ porting entity and a customer.
30 (2) A reporting entity must conduct ongoing customer due dili­ gence and undertake account monitoring in order to— (a) ensure that the business relationship and the transac­ 35 tions relating to that business relationship are consis­ 31 Part 2 cl 29 Anti­Money Laundering and Countering Financing of Terrorism Bill tent with the reporting entity’s knowledge about the cus­ tomer and the customer’s business and risk proﬁle; and identify any grounds for reporting a suspicious transac­ tion under section 37(1)(b).
(b) (3) When conducting ongoing customer due diligence and under­ 5 taking account monitoring, the reporting entity must have re­ gard to— (a) the type of customer due diligence conducted when the business relationship with the customer was estab­ lished; and the level of risk involved.
(b) 10 (4) When conducting ongoing customer due diligence and under­ taking account monitoring, a reporting entity must do at least the following: (a) regularly review the customer’s account activity and 15 transaction behaviour; and regularly review any customer information obtained under sections 13, 15, 17, 19, 21, 23, 24, 26, and 27, or, in relation to an existing customer, any customer information the reporting entity holds about 20 the customer; and anything prescribed by regulations.
(b) (c) Reliance on third parties Reliance on member of designated business group 29 (1) A reporting entity (member A) that is a member of a desig­ 25 nated business group may— (a) rely on another member of the group (member B) to conduct any customer due diligence procedures required for customer due diligence under this Act or the regulations as long as— (i) any identity information is given to member A by member B before member A establishes a busi­ ness relationship or an occasional transaction is conducted; and any veriﬁcation information is given to member 35 A by member B as soon as practicable, but no later than 5 days, after the business relationship is 30 (ii) 32 (2) 30 (1) (2) Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 30 established or the occasional transaction is con­ ducted: (b) adopt that part of an AML/CFT programme of another member of the group that relates to record keeping, ac­ count monitoring, ongoing customer due diligence, and 5 annual reporting subject to any conditions prescribed by regulations: use another member of the group’s risk assessment if that risk assessment is relevant to member A’s business: (d) make a suspicious transaction report on behalf of any 10 other member or all members of the designated business group.
(c) This section is subject to section 33, which relates to the protection of personal information.

Compare: Anti­Money Laundering and Counter­Terrorism Financing Act 2006 15 s 36(4) (Aust) Reliance on other reporting entities or persons in another country Subject to the conditions in subsection (2), a reporting entity may rely on another person (who is not an agent) to conduct 20 the customer due diligence procedures required for customer due diligence under this Act or the regulations.
The conditions are that— (a) the person being relied on is either— (i) (ii) a reporting entity; or a person who is resident in a country with suf­ ﬁcient anti­money laundering and countering ﬁnancing of terrorism systems and measures in place and who is supervised or regulated for AML/CFT purposes; and 25 30 (b) (c) the person has a business relationship with the customer concerned; and the person has conducted relevant customer due dili­ gence procedures to at least the standard required by this Act and regulations and has provided to the report­ 35 ing entity— 33 Part 2 cl 31 Anti­Money Laundering and Countering Financing of Terrorism Bill (i) (ii) relevant identity information before the reporting entity establishes a business relationship or an occasional transaction is conducted; and relevant veriﬁcation information as soon as prac­ ticable, but no later than 5 days, after the busi­ 5 ness relationship is established or the occasional transaction is conducted; and (d) (e) the person has consented to conducting the customer due diligence procedures for the reporting entity and to providing all relevant information to the reporting 10 entity; and any other conditions prescribed by regulations are com­ plied with.
(3) Despite subsection (1), a reporting entity, and not the person carrying out the customer due diligence procedure, is respon­ 15 sible for ensuring that customer due diligence is carried out in accordance with this Act.
Reliance on agents Subject to any conditions that may be prescribed by regula­ tions, a reporting entity may authorise a person to be its agent 20 and rely on that agent to conduct the customer due diligence procedures and obtain any information required for customer due diligence under this Act or the regulations.
Use of information obtained from third party conducting customer due diligence Information obtained from a third party conducting customer due diligence under sections 29 to 31 for a reporting entity may only be used by that entity for the purpose of complying with this Act and the regulations.
Protection of personal information and designated business groups This section applies to personal information that is either— (a) identity or veriﬁcation information received for the pur­ poses of section 29(1)(a); or information received for the purposes of section 35 29(1)(b).
(b) 25 30 31 32 33 (1) 34 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 34 (3) (2) Any information supplied by any member of a designated business group to another member of that group must be subject to privacy protections at least equivalent to those set out in privacy principles 5 to 11 in section 6 of the Privacy Act 1993.
Each member of the designated business group must agree, in writing, to comply with privacy principles 5 to 11 in section 6 of the Privacy Act 1993 or their equivalent if the member is resident overseas.

The reporting entity that provides information to another 10 member of its designated business group remains responsible for the use or disclosure of that information.
(4) 5 (5) A reporting entity may use or disclose information to which this section applies only as follows: (a) (b) it may use identity and veriﬁcation information received 15 for the purposes of section 29(1)(a) in a suspicious transactions report: it may disclose information for the purposes of section 29(1)(b) to another member of the designated business group unless such disclosure is likely to result in a sus­ 20 picious transaction report being ﬁled by the member to whom the information is disclosed.
Prohibitions 34 Prohibitions if customer due diligence not conducted If, in relation to a customer, a reporting entity is unable to con­ 25 duct customer due diligence in accordance with this subpart, the reporting entity— (a) must not establish a business relationship with the cus­ tomer; and (b) must terminate any existing business relationship with 30 the customer; and (c) must not carry out a transaction with or for the cus­ tomer; and (d) must consider whether to make a suspicious transac­ tions report; and 35 35 Part 2 cl 35 Anti­Money Laundering and Countering Financing of Terrorism Bill (e) may disclose the possibility of making a suspicious transaction report only to a person referred to in sec­ tion 43(2).
35 Prohibition on false customer names and customer anonymity 5 (1) A reporting entity must not,— (a) knowingly or recklessly, set up a facility for a customer on the basis of customer anonymity: (b) without lawful justiﬁcation or reasonable excuse, set up a facility for a customer under a false customer name.
10 (2) Subsection (1) does not apply to a facility— (a) that has a number or other identiﬁer allocated to it and the person who is authorised to act on behalf of the customer in respect of the facility has had their identity veriﬁed in accordance with the relevant customer due 15 diligence requirements; or that has been set up for the Commissioner or for the New Zealand Security Intelligence Service for law en­ forcement purposes.
(b) 36 Prohibition on establishing or continuing business relationship involving shell bank (1) A reporting entity must not establish or continue a business re­ lationship with, or allow an occasional transaction to be con­ ducted through it by,— a shell bank; or (a) a ﬁnancial institution that has a correspondent banking (b) relationship with a shell bank.
For the purposes of subsection (1), a shell bank is a corpor­ ation that— (a) (b) is incorporated in a foreign country; and is authorised to carry on banking business in its country of incorporation; and does not have a physical presence in its country of in­ corporation; and is not an afﬁliate of another corporation that— (i) is incorporated in a particular country; and (c) (d) (2) 36 20 25 30 35 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 37 (ii) (iii) (iv) is authorised to carry on banking business in its country of incorporation; and is sufﬁciently supervised and monitored in carry­ ing on its banking business; and has a physical presence in its country of incorpo­ 5 ration.
For the purposes of paragraph (d) of the deﬁnition of shell bank in subsection (2), a corporation is afﬁliated with an­ other corporation if, and only if,— (a) the corporation is a subsidiary of the other corporation; 10 or both corporations are under common effective control; or both corporations are declared to be afﬁliated in accord­ ance with regulations (if any).
15 (b) (c) For the purposes of the deﬁnition of shell bank in subsection (2), a corporation has a physical presence in a country if, and only if,— (a) the corporation carries on banking business at a place in that country; and banking operations of the corporation are managed or conducted from that place.
(b) Compare: Anti­Money Laundering and Counter­Terrorism Financing Act 2006 ss 15, 95 (Aust) (3) (4) Subpart 2—Suspicious transaction reports 37 Reporting entities to report suspicious transactions (1) Despite any other enactment or any rule of law, but subject to section 39 of this Act and to section 44(4) of the Terrorism Suppression Act 2002, this section applies if— (a) (b) a person conducts or seeks to conduct a transaction 30 through a reporting entity; and the reporting entity has reasonable grounds to suspect that the transaction or proposed transaction is or may be— (i) relevant to the investigation or prosecution of any 35 person for a money laundering offence; or relevant to the enforcement of the Misuse of Drugs Act 1975; or (ii) 20 25 37 Part 2 cl 38 Anti­Money Laundering and Countering Financing of Terrorism Bill (iii) (iv) relevant to the enforcement of the Terrorism Sup­ pression Act 2002; or relevant to the enforcement of the Proceeds of Crime Act 1991 or the Criminal Proceeds (Re­ covery) Act 2009.
5 (2) If this section applies, the reporting entity must, as soon as practicable, but no later than 3 working days after forming its suspicion, report the transaction or proposed transaction to the Commissioner, in accordance with section 38.

(3) Nothing in subsection (2) requires any lawyer to disclose any 10 privileged communication (as deﬁned in section 39).
Compare: 1996 No 9 ss 15(1), 19(1) 38 (1) Nature of suspicious transaction report Except as provided in subsection (2), a report under section 37 must— (a) (b) (c) be in the prescribed form (if any); and contain the details prescribed by regulations; and contain a statement of the grounds on which the report­ ing entity holds the suspicions referred to in section 37(1)(b); and be signed by a person authorised by the reporting entity to sign suspicious transaction reports (unless the report is forwarded by email or another similar means of com­ munication); and be forwarded, in writing, to the Commissioner— (i) (d) (e) 15 20 25 by way of secure electronic transmission by a means speciﬁed or provided by the Commis­ sioner for this purpose; or by another means (including, without limitation, by way of transmission by fax or email) that may 30 be agreed from time to time between the Com­ missioner and the reporting entity concerned.
(ii) (2) However, if the urgency of the situation requires, a suspicious transaction report may be made orally to any Police employee authorised for the purpose by the Commissioner, but in any 35 such case the reporting entity must, as soon as practicable, but no later than 3 working days, forward to the Commissioner a 38 5 10 15 (3) 39 (1) Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 39 suspicious transaction report that complies with the require­ ments in subsection (1).
The Commissioner may confer the authority to receive a sus­ picious transaction report under subsection (2) on— (a) (b) (c) any speciﬁed Police employee; or Police employees of any speciﬁed rank or class; or any Police employee or Police employees for the time being holding any speciﬁed ofﬁce or speciﬁed class of ofﬁces.
Compare: 1996 No 9 s 15(2)–(4) Privileged communication deﬁned For the purposes of section 37(3), a communication is a priv­ ileged communication only if— (a) (ii) (iii) it is a conﬁdential communication, whether oral or writ­ ten, passing between— (i) a lawyer in his or her professional capacity and another lawyer in that capacity: a lawyer in his or her professional capacity and his or her client: an agent of any person described in subpara­ 20 graph (i) or (ii), either directly or indirectly; and it is made or brought into existence for the purpose of obtaining or giving legal advice or assistance; and it is not made or brought into existence for the purpose of committing or furthering the commission of some 25 illegal or wrongful act.
(b) (c) (2) However, where the information consists wholly or partly of, or relates wholly or partly to, the receipts, payments, income, expenditure, or ﬁnancial transactions of a speciﬁed person (whether a lawyer, his or her client, or any other person), it 30 is not a privileged communication if it is contained in, or comprises the whole or part of, any book, account, statement, or other record prepared or kept by the lawyer in connection with a trust account of the lawyer within the meaning of section 6 of the Lawyers and Conveyancers Act 2006.
35 39 Part 2 cl 40 Anti­Money Laundering and Countering Financing of Terrorism Bill (3) For the purposes of this section, references to a lawyer include a ﬁrm in which he or she is a partner or is held out to be a partner.
Compare: 1996 No 9 s 19(2)–(4) Auditors may report suspicious transactions 40 (1) Despite any other enactment or any rule of law, this section ap­ plies to a person who, in the course of carrying out the duties of that person’s occupation as an auditor, has reasonable grounds to suspect, in relation to any transaction, that the transaction is— (a) 5 10 relevant to the investigation or prosecution of any per­ son for a money laundering offence; or relevant to the enforcement of the Terrorism Suppres­ sion Act 2002; or relevant to the enforcement of the Proceeds of Crime 15 Act 1991 or the Criminal Proceeds (Recovery) Act 2009.
(b) (c) (2) A person may report a transaction referred to in subsection (1) to the Commissioner.

Compare: 1996 No 9 s 16 20 41 (1) Protection of persons reporting suspicious transactions Subsection (2) applies to a person who— (a) discloses or supplies any information in any suspicious transaction report; or supplies any information in connection with any suspi­ 25 cious transaction report, whether at the time the report is made or afterwards.
(b) (2) No civil, criminal, and disciplinary proceedings lie against a person to whom subsection (1) applies— (a) in respect of the disclosure or supply, or the manner of 30 the disclosure or supply, by that person of the informa­ tion referred to in that subsection; or for any consequences that follow from the disclosure or supply of that information.
(b) If any information is reported, under section 40, to any Police 35 employee by any person, no civil, criminal, or disciplinary proceedings lie against that person— (3) 40 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 42 (a) (b) in respect of the disclosure or supply, or the manner of the disclosure or supply, of that information by that person; or for any consequences that follow from the disclosure or supply of that information.
(4) However, subsections (2) and (3) do not apply if the infor­ mation was disclosed or supplied in bad faith.

(5) Nothing in this section applies in respect of proceedings for an offence under any of sections 90 to 95.
Compare: 1996 No 9 s 17 5 10 42 (1) Immunity from liability for disclosure of information relating to money laundering transactions This section applies if— (a) (b) (c) (d) (e) 20 a person does any act that would constitute, or the per­ son believes would constitute, an offence against sec­ 15 tion 243(2) or (3) of the Crimes Act 1961; and in respect of the doing of that act, that person would have, by virtue of section 244(a) of the Crimes Act 1961, a defence to a charge under section 243(2) or (3) of that Act; and that person discloses, to any Police employee, any in­ formation relating to a money laundering transaction (within the meaning of section 243(4) of the Crimes Act 1961), being a money laundering transaction that con­ stitutes (in whole or in part), or is connected with or 25 related to, the act referred to in paragraph (a); and that information is so disclosed, in good faith, for the purpose of, or in connection with, the enforcement or intended enforcement of any enactment or provision re­ ferred to in section 244(a) of the Crimes Act 1961; and 30 that person is otherwise under any obligation (whether arising by virtue of any enactment or any rule of law or any other instrument) to maintain secrecy in relation to, or not to disclose, that information.
(2) If this section applies, then, without limiting section 41 and 35 despite that the disclosure would otherwise constitute a breach of that obligation of secrecy or non­disclosure, the disclosure by that person, to that Police employee, of that information is 41 Part 2 cl 43 Anti­Money Laundering and Countering Financing of Terrorism Bill not a breach of that obligation of secrecy or non­disclosure or (where applicable) of any enactment by which that obligation is imposed.
Compare: 1996 No 9 s 18 43 (1) Disclosure of information relating to suspicious transaction reports This section and section 44 apply in respect of the following information: (a) (b) any suspicious transaction report: any information the disclosure of which will identify, or 10 is reasonably likely to identify, any person— (i) 5 as a person who, in his or her capacity as an ofﬁ­ cer or employee of a reporting entity, has han­ dled a transaction in respect of which a suspi­ cious transaction report was made; or as a person who has prepared a suspicious trans­ action report; or as a person who has made a suspicious transac­ tion report: 15 (ii) (iii) (c) any information that discloses, or is reasonably likely 20 to disclose, the existence of a suspicious transaction re­ port.
(2) A reporting entity must not disclose information to which this section relates to any person except— (a) a Police employee who is authorised by the Commis­ 25 sioner to receive the information; or the reporting entity’s AML/CFT supervisor; or an ofﬁcer or employee of the reporting entity, for any purpose connected with the performance of that per­ son’s duties; or a barrister or solicitor, for the purpose of obtaining legal advice or representation in relation to the matter.
30 (b) (c) (d) (3) A Police employee may only disclose information to which this section applies for law enforcement purposes.

(4) An AML/CFT supervisor may only disclose information to 35 which this section applies to the Police for law enforcement purposes.
42 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 45 (5) A person (person A) referred to in subsection (2)(c) to whom disclosure of any information to which that subsection applies has been made must not disclose that information except to another person of the kind referred to in that subsec­ tion for the purpose of— (a) (b) the performance of person A’s duties; or obtaining legal advice or representation in relation to the matter.
5 (6) A person referred to in subsection (2)(d) to whom disclosure of any information to which that subsection applies has been 10 made must not disclose that information except to a person of the kind referred to in that subsection for the purpose of giving legal advice or making representations in relation to the matter.

(7) Any other person who has information to which this section applies may only disclose that information to the Police for 15 law enforcement purposes.
Compare: 1996 No 9 s 20 Disclosure of information in proceedings 44 (1) No person may disclose, in any judicial proceeding (within the meaning of section 108 of the Crimes Act 1961), any in­ 20 formation to which this section applies unless the Judge or, as the case requires, the person presiding at the proceeding is sat­ isﬁed that the disclosure of the information is necessary in the interests of justice.
(2) Nothing in this section prohibits the disclosure of any informa­ 25 tion for the purposes of the prosecution of any offence against section 91 or 92.
Compare: 1996 No 9 s 21 45 Disclosure of personal information relating to employees or senior managers An AML/CFT supervisor that has, in the performance and ex­ ercise of its functions and powers under this Act, obtained per­ sonal information about employees or senior managers may disclose that information to another government agency for the following purposes if the AML/CFT supervisor is satisﬁed 35 that the agency has a proper interest in receiving the informa­ tion: 30 43 Part 2 cl 46 Anti­Money Laundering and Countering Financing of Terrorism Bill (a) (b) law enforcement purposes: the detection, investigation, and prosecution of any of­ fence under the following Acts: the Companies Act 1993: (i) the Financial Advisers Act 2008: (ii) the Financial Service Providers (Registration and (iii) Dispute Resolution) Act 2008: the Gambling Act 2003: the Reserve Bank of New Zealand Act 1989: the Securities Act 1978: the Securities Markets Act 1988.
(iv) (v) (vi) (vii) 5 10 Subpart 3—Record keeping 46 (1) Obligation to keep transaction records In relation to every transaction that is conducted through a reporting entity, the reporting entity must keep those records 15 that are reasonably necessary to enable that transaction to be readily reconstructed at any time.
(2) Without limiting subsection (1), records must contain the following information: (a) (b) 20 the nature of the transaction: the amount of the transaction and the currency in which it was denominated: the date on which the transaction was conducted: the parties to the transaction: if applicable, the facility through which the transaction 25 was conducted, and any other facilities (whether or not provided by the reporting entity) directly involved in the transaction: the name of the ofﬁcer or employee or agent of the re­ porting entity who handled the transaction, if that ofﬁ­ 30 cer, employee, or agent— (i) has face­to­face dealings in respect of the trans­ action with any of the parties to the transaction; and has formed a suspicion (of the kind referred to in 35 section 37(1)(b)) about the transaction: any other information prescribed by regulations.
(ii) (c) (d) (e) (f) (g) 44 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 47 (3) A reporting entity must retain the records kept by that report­ ing entity, in accordance with this section, in relation to a trans­ action for— (a) a period of at least 5 years after the completion of that transaction; or any longer period that the AML/CFT supervisor for the reporting entity, or the Commissioner, speciﬁes.
(b) 5 Compare: 1996 No 9 s 29 47 (1) Obligation to keep identity and veriﬁcation records In respect of each case in which a reporting entity is required, 10 under subpart 1 of this Part, to identify and verify the iden­ tity of a person, the reporting entity must keep those records that are reasonably necessary to enable the nature of the evi­ dence used for the purposes of that identiﬁcation and veriﬁca­ tion to be readily identiﬁed at any time.
15 (2) Without limiting subsection (1), those records may com­ prise— (a) (b) a copy of the evidence so used; or if it is not practicable to retain that evidence, any in­ formation as is reasonably necessary to enable that evi­ 20 dence to be obtained.
(3) A reporting entity must retain the records kept by that report­ ing entity for,— (a) (b) (c) in the case of records relating to the identity and veriﬁ­ cation of the identity of a person in relation to establish­ 25 ing a business relationship, a period of at least 5 years after the end of that business relationship; or in the case of records relating to the identity and veriﬁ­ cation of the identity of a person in relation to conduct­ ing an occasional transaction, a period of at least 5 years 30 after the completion of that occasional transaction; or in the case of records relating to the identity and veri­ ﬁcation of the identity of an originator in relation to a wire transfer,— (i) if the wire transfer is conducted by a customer 35 with whom the reporting entity has a business relationship, a period of at least 5 years after the end of that business relationship; or 45 Part 2 cl 48 Anti­Money Laundering and Countering Financing of Terrorism Bill (ii) if the wire transfer is an occasional transaction, a period of at least 5 years after the completion of the wire transfer.
Compare: 1996 No 9 s 30 Obligation to keep other records 48 (1) A reporting entity must keep the following records in addition 5 (b) to the records referred to in sections 46 and 47: (a) records that are relevant to the establishment of the busi­ ness relationship; and any other records (for example, account ﬁles, business 10 correspondence, and written ﬁndings) relating to, and obtained during the course of, a business relationship that are reasonably necessary to establish the nature and purpose of, and activities relating to, the business rela­ tionship.
15 (2) 49 The records must be kept in accordance with section 49 for a period of at least 5 years after the end of the business rela­ tionship.
Compare: 1996 No 9 s 31 How records to be kept Records required by this subpart to be kept by a reporting en­ tity must— (a) be kept either in written form in the English language, or so as to enable the records to be readily accessible and readily convertible into written form in the English 25 language; and be kept in the manner prescribed by regulations (if any).
20 (b) Compare: 1996 No 9 s 32 50 When records need not be kept Nothing in this subpart requires the retention of any records 30 kept by a reporting entity that has been liquidated and ﬁnally dissolved.
Compare: 1996 No 9 s 33 46 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 53 51 (1) Destruction of records Subject to subsection (2), a reporting entity must ensure that every record retained by that reporting entity under this sub­ part, and every copy of that record, is destroyed as soon as practicable after the expiry of the period for which the report­ 5 ing entity is required to retain that record.
(2) Nothing in this section requires the destruction of any record, or any copy of any record, in any case where there is a lawful reason for retaining that record.
(3) Without limiting subsection (2), there is a lawful reason for 10 retaining a record if the retention of that record is necessary— in order to comply with the requirements of any other (a) enactment; or to enable a reporting entity to carry on its business; or for the purposes of the detection, investigation, or pros­ 15 ecution of any offence.
(b) (c) Compare: 1996 No 9 s 34 52 Other laws not affected Nothing in this subpart limits or affects any other enactment that requires any reporting entity to keep or retain a record.
Compare: 1996 No 9 s 35 Subpart 4—Compliance with AML/CFT requirements 53 Reporting entity must have AML/CFT programme and AML/CFT compliance ofﬁcer (1) A reporting entity must establish, implement, and maintain a compliance programme (an AML/CFT programme) that includes internal procedures, policies, and controls to— (a) detect money laundering and the ﬁnancing of terrorism; and (b) manage and mitigate the risk of money laundering and ﬁnancing of terrorism.
(2) A reporting entity must designate an employee as an AML/CFT compliance ofﬁcer to administer and maintain its AML/CFT programme.

20 25 30 35 47 Part 2 cl 54 Anti­Money Laundering and Countering Financing of Terrorism Bill (3) The AML/CFT compliance ofﬁcer must report to a senior manager of the reporting entity.
54 Minimum requirements for AML/CFT programmes A reporting entity’s AML/CFT programme must include ad­ equate and effective procedures, policies, and controls for― 5 (a) vetting— (i) (ii) (iii) senior managers: the AML/CFT compliance ofﬁcer: any other employee that is engaged in AML/CFT related duties; and 10 training on AML/CFT matters for the following em­ ployees: (i) (ii) (iii) senior managers: the AML/CFT compliance ofﬁcer: any other employee that is engaged in AML/CFT 15 related duties; and 20 complying with customer due diligence requirements (including ongoing customer due diligence); and reporting suspicious transactions; and record keeping; and setting out what the reporting entity needs to do, or con­ tinue to do, to manage and mitigate the risks of money laundering and the ﬁnancing of terrorism; and account monitoring; and examining, and keeping written ﬁndings relating to,— 25 complex or unusually large transactions; and (i) unusual patterns of transactions that have no ap­ (ii) parent economic or visible lawful purpose; and any other activity that the reporting entity regards as being particularly likely by its nature to be 30 related to money laundering or the ﬁnancing of terrorism; and (iii) monitoring, examining, and keeping written ﬁndings re­ lating to business relationships and transactions from or in countries that do not have or have insufﬁcient 35 anti­money laundering or countering ﬁnancing of ter­ rorism systems in place and have additional measures (b) (c) (d) (e) (f) (g) (h) (i) 48 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 55 (j) (k) (l) for dealing with or restricting dealings with such coun­ tries; and preventing the use, for money laundering or the ﬁnan­ cing of terrorism, of products (for example, the mis­ use of technology) and transactions (for example, non­ 5 face­to­face business relationships or transactions) that might favour anonymity; and determining when enhanced customer due diligence is required and when simpliﬁed customer due diligence might be permitted; and providing when a person who is not the reporting entity may, and setting out the procedures for the person to, conduct the relevant customer due diligence on behalf of the reporting entity; and 10 (m) monitoring and managing compliance with, and the in­ 15 ternal communication of and training in, those proced­ ures, policies, and controls; and any other matters prescribed by regulations; and any other matters that may be provided for in the guid­ ance produced by the AML/CFT supervisor for the re­ 20 porting entity or by the Commissioner.
(n) (o) 55 (1) (2) Risk assessment Before conducting customer due diligence or establishing an AML/CFT programme, a reporting entity must ﬁrst undertake an assessment of the risk of money laundering and the ﬁnan­ 25 cing of terrorism (a risk assessment) that it may reasonably expect to face in the course of its business.
In assessing the risk, the reporting entity must have regard to the following: (a) (b) (c) the nature, size, and complexity of its business; and the products and services it offers; and the methods by which it delivers products and services to its customers; and the types of customers it deals with; and the countries it deals with; and the institutions it deals with; and (d) (e) (f) 35 30 49 5 10 15 Part 2 cl 56 Anti­Money Laundering and Countering Financing of Terrorism Bill (g) (h) any applicable guidance material produced by AML/CFT supervisors or the Commissioner relat­ ing to risk assessments; and any other factors that may be provided for in regula­ tions.
(3) The risk assessment must be in writing and— (a) (b) (c) identify the risks faced by the reporting entity in the course of its business; and describe how the reporting entity will ensure that the assessment remains current; and enable the reporting entity to determine the level of risk involved in relation to relevant obligations under this Act and the regulations.
56 Review and audit of risk assessment and AML/CFT programme (1) A reporting entity must conduct a review of its risk assessment and AML/CFT programme to— (a) (b) ensure the risk assessment and AML/CFT programme remain current; and identify any deﬁciencies in the effectiveness of the risk 20 assessment and the AML/CFT programme; and (c) make any changes to the risk assessment or AML/CFT programme identiﬁed as being necessary under para­ graph (b).
(2) A reporting entity must ensure its risk assessment and 25 AML/CFT programme are audited every 2 years or at any other time at the request of the relevant AML/CFT supervisor.

The audit must be carried out by an independent person ap­ pointed by the reporting entity who is appropriately qualiﬁed to conduct the audit.
(3) 30 (a) (4) A person appointed to conduct an audit is not required to be— a chartered accountant within the meaning of section 19 of the Institute of Chartered Accountants of New Zealand Act 1996; or qualiﬁed to undertake ﬁnancial audits.
(b) (5) A person appointed to conduct an audit must not have been involved in— 50 35 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 58 (a) (b) the establishment, implementation, or maintenance of the reporting entity’s AML/CFT programme: the undertaking of the reporting entity’s risk assess­ ment.

(6) The audit of the risk assessment is limited to an audit of 5 whether the reporting entity’s risk assessment fulﬁls the requirements in section 55(3).
(7) As soon as practicable after conducting an audit, the reporting entity must provide a copy to the relevant AML/CFT super­ visor.

10 57 (1) Annual AML/CFT report The reporting entity must prepare an annual report on its risk assessment and AML/CFT programme.
(2) An annual report must— (a) (b) be in the prescribed form; and take into account the results and implications of the re­ view required by section 56(1) or the audit required by section 56(2); and contain any information prescribed by regulations.

(c) The reporting entity must provide the annual report to its 20 AML/CFT supervisor at a time agreed between the reporting entity and the AML/CFT supervisor.
15 (3) 58 Reporting entities to ensure that branches and subsidiaries comply with AML/CFT requirements (1) A reporting entity must ensure that its branches and sub­ 25 sidiaries that are in a foreign country apply, to the extent permitted by the law of that country, measures at least equiva­ lent to those set out in this Act and the regulations with regard to the requirements for customer due diligence (including on­ going customer due diligence), risk assessments, AML/CFT 30 programmes, and record keeping.
If the law of the foreign country does not permit the application of those equivalent measures by the branch or the subsidiary located in that country, the reporting entity must— (a) inform its AML/CFT supervisor accordingly; and (2) 35 51 Part 2 cl 59 Anti­Money Laundering and Countering Financing of Terrorism Bill (b) take additional measures to effectively handle the risk of a money laundering offence and the ﬁnancing of ter­ rorism.
(3) A reporting entity must communicate (where relevant) the policies, procedures, and controls that it establishes, imple­ 5 ments, and maintains in accordance with this subpart to its branches and subsidiaries that are outside New Zealand.
Subpart 5—Codes of practice 59 Interpretation In this Part, unless the context otherwise requires,— code of practice means a code of practice approved by the responsible Minister under section 61, as amended from time to time proposed code of practice means a document prepared under section 60(1).
60 AML/CFT supervisors to prepare codes of practice for relevant sectors (1) An AML/CFT supervisor must, if directed to do so by the Min­ ister responsible for that AML/CFT supervisor (the responsi­ ble Minister), prepare— (a) 10 15 20 1 or more codes of practice for the sector of activity of the reporting entities for which it is the supervisor under section 127 or in respect of different reporting entities speciﬁed by the responsible Minister: an instrument that amends a code of practice or revokes 25 the whole or any provision of a code of practice pre­ pared under paragraph (a).
(b) (2) The purpose of a code of practice is to provide a statement of practice that assists reporting entities to comply with their obligations under this Act and the regulations.
(a) (3) A direction under subsection (1) may (without limitation)— relate generally to the obligations imposed on the rele­ vant reporting entities by or under this Act or the regu­ lations or specify particular aspects of those obligations that are to be covered by the code of practice: 30 35 52 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 61 (b) (c) (d) specify the amendments to be made or their intended effect, and specify the extent of the revocation to be made: indicate the date by which the responsible Minister wishes the code of practice to be provided to him or 5 her: include details about the AML/CFT supervisor is required to provide under section 61(1)(a).
the recommendation that (4) An AML/CFT supervisor must comply with a direction under 10 subsection (1) as soon as practicable.

(5) No code of practice has legal effect until approved by the re­ sponsible Minister under section 61(6).
61 (1) (2) (3) Procedure for approval and publication of codes of practice The responsible Minister must not approve a code of practice prepared by an AML/CFT supervisor unless— (a) the AML/CFT supervisor has made a recommendation that the Minister should approve the code of practice; and the AML/CFT supervisor has consulted the persons and organisations that the Minister thinks appropriate, hav­ ing regard to the subject matter of the proposed code of practice.
(b) 15 20 In consulting under subsection (1)(b), the AML/CFT super­ 25 visor must ensure that— (a) a copy of the proposed code of practice or a summary of its contents, in hard copy or electronic format, is pro­ vided to the persons and organisations being consulted; and the persons and organisations being consulted have at least 20 working days to make submissions or repre­ sentations about the proposed code of practice.
The responsible Minister may direct the AML/CFT supervisor to reconsider any aspect of the proposed code of practice and to 35 make any amendments that the Minister considers necessary.
(b) 30 (4) Despite subsection (3),— 53 Part 2 cl 62 Anti­Money Laundering and Countering Financing of Terrorism Bill (a) (b) if the AML/CFT supervisor does not amend the pro­ posed code of practice as directed by the Minister or within the time speciﬁed by the Minister, the Minister may make those amendments: the Minister may, after consultation with the AML/CFT 5 supervisor, make any further amendments to the pro­ posed code of practice that he or she considers neces­ sary.
(5) The responsible Minister must— (a) (b) (c) approve the proposed code of practice as prepared by 10 the AML/CFT supervisor; or approve the proposed code of practice as amended by the AML/CFT supervisor; or approve the proposed code of practice as amended by the Minister after consultation with the AML/CFT 15 supervisor.
(6) The responsible Minister approves a code of practice by notice in the Gazette, and the notice— (a) must either set out the code of practice or state where (b) copies of the code of practice in hard copy or electronic 20 format may be obtained or viewed: is not a regulation for the purposes of the Acts and Regulations Publication Act 1989, but is a regulation for the purposes of the Regulations (Disallowance) Act 1989.
25 Amendment and revocation of codes of practice 62 (1) A code of practice may be amended or revoked in the same manner as that in which it was made.

Sections 60, 61, 63, and 64 apply with the necessary modi­ ﬁcations to the amendment or revocation of a code of practice.
30 Proof of codes of practice Publication in the Gazette of a notice under section 61(6) is conclusive evidence that the requirements of sections 61(1) to (5) and 62 have been complied with in respect of the ap­ proval speciﬁed in the notice.
35 (2) 63 54 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 2 cl 65 Legal effect of codes of practice 64 (1) A reporting entity complies with an obligation imposed on it by or under this Act or the regulations by— (a) complying with those provisions of a code of practice that state a means of satisfying the obligation; or complying with the obligation by some other equally effective means.
(b) 5 (3) (2) However, a reporting entity may not rely on subsection (1)(b) as a defence to an act or omission on its part unless it has, by notice in writing given before the act or omission 10 occurred, advised the AML/CFT supervisor that it has opted out of compliance with the code of practice and intends to satisfy its obligations by some other equally effective means.
If a person is charged with an offence in respect of a failure to comply with any provision of this Act, a court must, in 15 determining whether that person has failed to comply with the provision, have regard to any code of practice in force under section 61(6) at the time of the alleged failure relating to matters of the kind to which the provision relates.
If an application for an injunction against a person has been 20 made under this Act, a court must, in determining whether to grant the injunction, have regard to any code of practice in force under section 61(6).
If an application for a pecuniary penalty against a person has been made under this Act, a court must, in determining 25 whether to impose a pecuniary penalty, have regard to any code of practice in force under section 61(6) at the time the person engaged in conduct that constituted the relevant civil liability act.
(5) (4) Subpart 6—Cross­border transportation of cash Reports about movement of cash into or out of New Zealand 65 30 (1) A person must not move cash into or out of New Zealand if— (a) the total amount of the cash is more than the applicable 35 threshold value; and 55 Part 2 cl 66 Anti­Money Laundering and Countering Financing of Terrorism Bill (b) (c) the person has not given a report in respect of the move­ ment of that cash in accordance with this subpart; and the movement of that cash is not exempted under this Act or regulations (if any).
For the purposes of this Act, a person moves cash into New 5 Zealand if the person brings or sends the cash into New Zealand.

For the purposes of this Act, a person moves cash out of New Zealand if the person takes or sends the cash out of New Zealand.
Compare: Anti­Money Laundering and Counter­Terrorism Financing Act 2006 ss 53(3), 57(2), 58 (Aust) 10 Reports about receipt of cash from outside New Zealand A person must not receive cash moved to the person from out­ side New Zealand if— (a) the total amount of the cash is more than the applicable threshold value; and the person has not given a report in respect of the move­ ment of that cash in accordance with this subpart; and the movement of that cash is not exempted under this 20 Act or regulations (if any).
(b) (c) 15 Compare: Anti­Money Laundering and Counter­Terrorism Financing Act 2006 s 55(3) (Aust) Reporting requirements A report under this subpart must— (a) (b) (c) be in writing in the prescribed form; and contain the prescribed information; and be completed in accordance with regulations (if any); and be provided to a Customs ofﬁcer before the cash leaves 30 the control of the Customs.
(d) 25 Compare: 1996 No 9 s 37; Anti­Money Laundering and Counter­Terrorism Financing Act 2006 s 55(5) (Aust) (2) (3) 66 67 56 68 (1) (2) (3) (4) Anti­Money Laundering and Countering Financing of Terrorism Bill Part 3 cl 69 Information to be forwarded to Commissioner If a report is made to a Customs ofﬁcer under this subpart, that ofﬁcer must, as soon as practicable, forward the report to the Commissioner.
If, in the course of conducting a search under this Act, a Cus­ 5 toms ofﬁcer discovers any cash in respect of which a report is required to be made under this subpart but has not been made, that ofﬁcer must, as soon as practicable, report the details of the search, and of the cash, to the Commissioner.

Every report made under subsection (2) must be in the form 10 that the Commissioner may determine after consultation with the chief executive of the New Zealand Customs Service.
The chief executive of the New Zealand Customs Service must— (a) cause a record to be made and kept of― (i) 15 each occasion on which a cash report is made to a Customs ofﬁcer; and the details of the identity of the person making the cash report; and the date on which the cash report is made; and (b) (iii) ensure that the record is retained for a period of not less than 1 year after the date on which the cash report is made.
Compare: 1996 No 9 s 42 (ii) Part 3 Enforcement Subpart 1—General provisions relating to Part Proceedings for civil penalties 69 When and how civil penalty proceedings brought (1) An application for a civil penalty under this Part may be made no later than 6 years after the conduct giving rise to the liability to pay the civil penalty occurred.
In proceedings for a civil penalty under this Part,— (a) the standard of proof is the standard of proof that applies 35 in civil proceedings; and (2) 20 25 30 57 Part 3 cl 70 Anti­Money Laundering and Countering Financing of Terrorism Bill (b) the relevant AML/CFT supervisor may, by order of the court, obtain discovery and administer interrogatories.
Relationship between civil penalty and criminal proceedings 70 (1) (2) Relationship between concurrent civil penalty proceedings 5 and criminal proceedings Criminal proceedings for an offence under this Part may be commenced against a person in relation to particular conduct whether or not proceedings for a civil penalty under this Part have been commenced against the person in relation to the 10 same or substantially the same conduct.
Proceedings under this Part for a civil penalty against a person in relation to particular conduct are stayed if criminal proceed­ ings against the person are or have been commenced for an offence under this Part in relation to the same or substantially 15 the same conduct.

(3) After the criminal proceedings referred to in subsection (2) have been completed or withdrawn, a person may apply to have the stay lifted on the civil penalty proceedings referred to in that subsection.
20 One penalty only rule If civil penalty or criminal proceedings under this Part are brought against a person in relation to particular conduct, a court may not impose a penalty (whether civil or criminal) on the person if a court has already imposed a penalty under this 25 Part in proceedings relating to the same or substantially the same conduct.
If a person is or may be liable to more than 1 civil penalty under this Part in respect of the same or substantially the same conduct, civil penalty proceedings may be brought against the 30 person for more than 1 civil penalty, but the person may not be required to pay more than 1 civil penalty in respect of the same or substantially the same conduct.
71 (1) (2) 58 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 3 cl 73 72 (1) Restriction on use of evidence given in civil penalty proceedings Evidence of information given, or evidence of production of documents, by a person is not admissible in criminal proceed­ ings against the person for an offence under this Part or any 5 other enactment if— (a) the person previously gave the evidence or produced the documents in civil penalty proceedings under this Part against him or her, whether or not a civil penalty was imposed; and the proceedings for the civil penalty related to conduct that was the same or substantially the same as the con­ duct constituting the offence.
(b) 10 (2) This section does not apply to criminal proceedings in respect of the falsity of the evidence given by the person in the pro­ 15 ceedings for the civil penalty.
Liability of senior managers Criminal liability of senior managers 73 (1) A senior manager of a body corporate commits an offence if— (a) (b) (c) (d) the body corporate commits an offence under this Part; 20 and the manager knew that the offence was being or would be committed; and the manager was in a position to inﬂuence the conduct of the body corporate in relation to the commission of 25 the offence; and the manager failed to take all reasonable steps to prevent the commission of the offence.
(2) The maximum penalty for an offence under this section is the maximum penalty that could have been imposed if an indi­ 30 vidual had been convicted of the offence that the body corpo­ rate committed.

(3) An offence under this section is triable in whatever manner the offence that the body corporate has committed could be tried.
59 Part 3 cl 74 Anti­Money Laundering and Countering Financing of Terrorism Bill Liability of senior managers to civil penalty 74 (1) A senior manager of a body corporate is liable to a civil penalty if— (a) (b) (c) (d) the body corporate engages in conduct that constitutes a civil liability act; and the manager knew that the civil liability act was occur­ ring or would occur; and the manager was in a position to inﬂuence the conduct of the body corporate in relation to the civil liability act; and the manager failed to take all reasonable steps to prevent the civil liability act.
5 10 The maximum civil penalty for a civil liability act under this section is the maximum civil penalty that could have been im­ posed if an individual had engaged in the conduct constituting 15 the civil liability act that the body corporate engaged in.
How to establish whether senior manager took all reasonable steps For the purposes of sections 73 and 74, in determining whether a senior manager of a body corporate failed to take 20 all reasonable steps to prevent the commission of an offence or a civil liability act, a court must have regard to the follow­ ing: (a) what action (if any) the manager took to ensure that the body corporate’s employees, agents, and contrac­ 25 tors had a reasonable knowledge and understanding of the requirements to comply with this Act and the regu­ lations, so far as they affect the employees, agents, or contractors concerned: (b) what action (if any) the manager took when he or she 30 became aware that the body corporate was committing an offence or a civil liability act under this Act.
This section does not limit the generality of sections 73 and 74.
(2) 75 (1) (2) 60 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 3 cl 78 Subpart 2—Civil liability 76 Meaning of civil liability act In this Part, a civil liability act occurs when a reporting en­ tity fails to comply with any of the AML/CFT requirements, including, without limitation, when the reporting entity— (a) 5 fails to conduct customer due diligence as required by subpart 1 of Part 2: fails to adequately monitor accounts and transactions: enters into or continues a business relationship with a person who does not produce or provide satisfactory 10 evidence of the person’s identity: enters into or continues a correspondent banking rela­ tionship with a shell bank: fails to keep records in accordance with the require­ ments of subpart 3 of Part 2: fails to establish, implement, or maintain an AML/CFT programme: fails to ensure that its branches and subsidiaries comply with the relevant AML/CFT requirements.
15 (b) (c) (d) (e) (f) (g) 77 20 Possible responses to civil liability act If a civil liability act is alleged to have occurred, the relevant AML/CFT supervisor may do 1 or more of the following: issue a formal warning under section 78: (a) accept an enforceable undertaking under section 79 (b) and seek an order in the court for breach of that under­ 25 taking under section 80: seek an injunction from the High Court under section 83 or 85: apply to the court for a pecuniary penalty under section 88.
(d) (c) 30 Formal warnings 78 (1) Formal warnings The relevant AML/CFT supervisor may issue 1 or more formal warnings to a person if the AML/CFT supervisor has reason­ able grounds to believe that that person has engaged in conduct 35 that constituted a civil liability act.

61 Part 3 cl 79 Anti­Money Laundering and Countering Financing of Terrorism Bill (2) A formal warning must be— (a) (b) in the prescribed form; and issued in the manner speciﬁed in regulations (if any).
Enforceable undertakings Enforceable undertakings The relevant AML/CFT supervisor may accept a written undertaking given by a person in connection with compliance with this Act or the regulations (if any).

The person may withdraw or vary the undertaking at any time, but only with the consent of the relevant AML/CFT supervisor.
10 5 Enforcement of undertakings If the relevant AML/CFT supervisor considers that a person who gave an undertaking under section 79 has breached 1 or more of its terms, the relevant AML/CFT supervisor may apply to the court for an order under subsection (2).
If the court is satisﬁed that the person has breached 1 or more of the terms of the undertaking, the court may make any or all of the following orders: (a) 15 20 an order directing the person to comply with any of the terms of the undertaking: an order directing the person to pay to the AML/CFT supervisor an amount up to the amount of any ﬁnancial beneﬁt that the person has obtained directly or indirectly and that is reasonably attributable to the breach: any order that the court considers appropriate directing 25 the person to compensate any other person who has suf­ fered loss or damage as a result of the breach: any other order that the court considers appropriate.
(b) (c) (d) Assessment of compensation for breach of undertakings For the purposes of section 80(2)(c), in determining whether 30 another person (person A) has suffered loss or damage as a result of the breach, and in assessing the amount of compen­ sation payable, the court may have regard to the following: (a) the extent to which any expenses incurred by person A are attributable to dealing with the breach: 35 79 (1) (2) 80 (1) (2) 81 62 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 3 cl 84 (b) (c) (d) (e) the effect of the breach on person A’s ability to carry on business or other activities: any damage to the reputation of person A’s business that is attributable to dealing with the breach: any loss of business opportunities suffered by person A 5 as a result of dealing with the breach: any other matters that the court considers relevant.
Injunctions Powers of High Court not affected The powers in sections 83 to 87 are in addition to, and do 10 not derogate from, any other powers of the High Court relating to the granting of injunctions.
Performance injunctions The High Court may, on the application of the relevant AML/CFT supervisor, grant an injunction requiring a person 15 to do an act or thing if— (a) that person has refused or failed, or is refusing or failing, or is proposing to refuse or fail, to do that act or thing; and the refusal or failure was, is, or would be a civil liability 20 act.

(b) 82 83 (1) (2) The court may rescind or vary an injunction granted under this section.
84 When High Court may grant performance injunctions (1) The High Court may grant an injunction requiring a person to 25 do an act or thing if— (a) it is satisﬁed that the person has refused or failed to do that act or thing; or it appears to the court that, granted, it is likely that the person will refuse or fail to 30 do that act or thing.
if an injunction is not (b) (2) (3) Subsection (1)(a) applies whether or not it appears to the court that the person intends to refuse or fail again, or to con­ tinue to refuse or fail, to do that act or thing.
Subsection (1)(b) applies— 35 63 Part 3 cl 85 Anti­Money Laundering and Countering Financing of Terrorism Bill (a) whether or not the person has previously refused or failed to do that act or thing; or (b) where there is an imminent danger of substantial dam­ age to any other person if that person refuses or fails to do that act or thing.
5 85 (1) (2) Restraining injunctions The High Court may, on the application of the relevant AML/CFT supervisor or any other person, grant an injunction restraining a person from engaging in conduct that constitutes or would constitute a contravention of a provision of this Act.

10 The court may rescind or vary an injunction granted under this section.
86 When High Court may grant restraining injunctions and interim injunctions The High Court may grant an injunction restraining a person 15 from engaging in conduct of a particular kind if— (a) it is satisﬁed that the person has engaged in conduct of that kind; or it appears to the court that, granted, it is likely that the person will engage in con­ 20 duct of that kind.
if an injunction is not (b) The court may grant an interim injunction restraining a person from engaging in conduct of a particular kind if, in its opinion, it is desirable to do so.

Subsections (1)(a) and (2) apply whether or not it appears to 25 the court that the person intends to engage again, or to continue to engage, in conduct of that kind.
Subsections (1)(b) and (2) apply— (a) whether or not the person has previously engaged in conduct of that kind; or 30 (b) where there is an imminent danger of substantial dam­ age to any other person if that person engages in conduct of that kind.
(1) (2) (3) (4) 64 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 3 cl 88 87 (1) Undertaking as to damages not required by AML/CFT supervisor If the relevant AML/CFT supervisor applies to the High Court for the grant of an interim injunction under this subpart, the court must not, as a condition of granting an interim injunction, 5 require the AML/CFT supervisor to give an undertaking as to damages.
(2) However, in determining the AML/CFT supervisor’s applica­ tion for the grant of an interim injunction, the court must not take into account that the AML/CFT supervisor is not required 10 to give an undertaking as to damages.

Pecuniary penalties Pecuniary penalties for civil liability act 88 (1) On the application of the relevant AML/CFT supervisor, the (2) (3) (4) in the case of an individual, $100,000; and in the case of a body corporate, $1 million.
High Court may order a person to pay a pecuniary penalty to 15 the Crown, or to any other person speciﬁed by the court, if the court is satisﬁed that that person has engaged in conduct that constituted a civil liability act.
For a civil liability act speciﬁed in section 76(b), (c), (d), or (g), the maximum amount of a pecuniary penalty under this 20 Act is,— (a) (b) For a civil liability act speciﬁed in section 76(a), (e), or (f), the maximum amount of a pecuniary penalty under this Act 25 is,— (a) (b) In determining an appropriate pecuniary penalty, the court must have regard to all relevant matters, including— (a) (b) the nature and extent of the civil liability act; and the likelihood, nature, and extent of any damage to the integrity or reputation of New Zealand’s ﬁnancial sys­ tem because of the civil liability act; and the circumstances in which the civil liability act oc­ 35 curred; and in the case of an individual, $200,000; and in the case of a body corporate, $2 million.
(c) 30 65 Part 3 cl 89 Anti­Money Laundering and Countering Financing of Terrorism Bill (d) whether the person has previously been found by the court in proceedings under this Act to have engaged in any similar conduct.
Subpart 3—Offences Offence and penalties relating to civil liability act Offence and penalties for civil liability act 89 (1) A reporting entity that engages in conduct constituting a civil liability act commits an offence if the reporting entity engages in that conduct knowingly or recklessly.

It is a defence to the offence under subsection (1) if the re­ porting entity proves that the reporting entity took all reason­ able steps to prevent the commission of the offence.
(2) Offences relating to suspicious transaction reports 5 10 15 Failing to report suspicious transaction A reporting entity commits an offence if— (a) (b) a transaction is conducted or is sought to be conducted through the reporting entity; and the reporting entity has reasonable grounds to suspect 20 that the transaction or the proposed transaction is or may be— (i) relevant to the investigation or prosecution of any person for a money laundering offence; or relevant to the enforcement of the Terrorism Sup­ 25 pression Act 2002; or relevant to the enforcement of the Proceeds of Crime Act 1991 or the Criminal Proceeds (Re­ covery) Act 2009; and (ii) (iii) (c) the reporting entity fails to report the transaction or the 30 proposed transaction to the Commissioner as soon as practicable, but no later than 3 working days, after form­ ing that suspicion.
Compare: 1996 No 9 s 22(1) 90 66 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 3 cl 92 91 Providing false or misleading information in connection with suspicious transaction report A person commits an offence who, in making a suspicious transaction report or in supplying information in connection with that report,— (a) makes any statement that the person knows is false or (b) misleading in a material particular; or omits from any statement any matter or thing without which the person knows that the statement is false or misleading in a material particular.
5 10 Compare: 1996 No 9 s 22(3) 92 Unlawful disclosure of suspicious transaction report (1) A person commits an offence who contravenes section 43— for the purpose of obtaining, directly or indirectly, an advantage or a pecuniary gain for that person or any 15 other person; or (a) (b) with intent to prejudice any investigation into— (i) (ii) the commission or possible commission of a money laundering offence; or the ﬁnancing of terrorism or the possible ﬁnan­ 20 cing of terrorism.
(2) A person commits an offence who— (a) (b) (c) (d) is an ofﬁcer or employee or a former ofﬁcer or employee of a reporting entity; and has become aware, or became aware, in the course of 25 that person’s duties as such an ofﬁcer or employee, that any investigation into any transaction or proposed trans­ action that is the subject of a suspicious transaction re­ port is being, or may be, conducted by the Police; and knows that he or she is not legally authorised to disclose 30 the information; and discloses that information to any other person— (i) for the purpose of obtaining, directly or indi­ rectly, an advantage or a pecuniary gain for that person or any other person; or 35 (ii) with intent to prejudice any investigation into— the commission or possible commission of a money laundering offence; or (A) 67 Part 3 cl 93 Anti­Money Laundering and Countering Financing of Terrorism Bill (B) the ﬁnancing of terrorism or the possible ﬁnancing of terrorism.
Compare: 1996 No 9 s 22(4), (5) Failure to keep or retain adequate records relating to suspicious transaction A reporting entity commits an offence if the reporting entity fails to keep or retain adequate records relating to a suspicious transaction.

Obstruction of investigation relating to suspicious transaction report A person commits an offence if the person obstructs any in­ vestigation relating to any suspicious transaction report with­ out lawful justiﬁcation or excuse.
5 10 Contravention of section 44(1) A person commits an offence if the person acts in contraven­ 15 tion of section 44(1) without lawful justiﬁcation or excuse.
Compare: 1996 No 9 s 22(8) Defence It is a defence to a charge against a person in relation to a contravention of, or a failure to comply with, subpart 1 of 20 Part 2 if the defendant proves that— (a) the defendant took all reasonable steps to ensure that the defendant complied with that subpart; or in the circumstances of the particular case, the defen­ dant could not reasonably have been expected to ensure 25 that the defendant complied with the subpart.
(b) In determining, for the purposes of subsection (1)(a), whether or not a defendant took all reasonable steps to com­ ply with subpart 1 of Part 2, the court must have regard to— (a) the nature of the reporting entity and the activities in which it engages; and the existence and adequacy of any procedures estab­ lished by the reporting entity to ensure compliance with that subpart.
(b) 30 35 93 94 95 96 (1) (2) 68 (3) (4) 97 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 3 cl 98 Except as provided in subsection (4), subsection (1) does not apply unless, within 21 days after the service of the sum­ mons, or within such further time as the court may allow, the defendant has delivered to the prosecutor a written notice— (a) stating that the defendant intends to rely on the defence 5 referred to in subsection (1); and specifying the reasonable steps that the defendant will claim to have taken.
(b) In any such prosecution, evidence that the defendant took a step not speciﬁed in the written notice required by subsection 10 (3) is not, except with the leave of the court, admissible for the purpose of supporting a defence under subsection (1).
Compare: 1996 No 9 s 23 Time limit for prosecution of offences relating to civil liability act and suspicious transaction reports A prosecution against a reporting entity or a person for an of­ fence under any of sections 89 to 91 and 93 to 95 must be commenced— (a) within 6 months of the date on which the prosecutor is satisﬁed that there is sufﬁcient evidence to warrant the 20 commencement of proceedings; but not later than 3 years after the offence was committed.
(b) 15 Penalties 98 (1) A reporting entity or person who commits an offence under any of sections 89 to 91 and 93 to 95 is liable, on convic­ 25 tion, to,— (a) in the case of an individual, either or both of the follow­ ing: (i) (ii) in the case of a body corporate, a ﬁne of up to $5 million.
(2) A person who commits an offence under section 92 is liable, a term of imprisonment of not more than 2 years: a ﬁne of up to $300,000; and (b) 30 on summary conviction, to,— (a) (b) in the case of an individual, a ﬁne of up to $10,000: in the case of a body corporate, a ﬁne of up to $100,000.
35 69 Part 3 cl 99 Anti­Money Laundering and Countering Financing of Terrorism Bill Other offences relating to non­compliance with AML/CFT requirements 99 Structuring transaction to avoid application of AML/CFT requirements A person commits an offence if the person structures a trans­ 5 action (other than a transaction that involves the cross­border transportation of cash) to avoid the application of any AML/CFT requirements.
100 Offence to obstruct AML/CFT supervisor A person commits an offence if the person wilfully obstructs 10 any AML/CFT supervisor in the exercise of any power con­ ferred or the performance of any function imposed on that supervisor by this Act.
101 Offence to provide false or misleading information to AML/CFT supervisor A person commits an offence if, without reasonable excuse, the person provides information to an AML/CFT supervisor knowing that information to be false or misleading in any ma­ terial respect.
15 102 Time limit for prosecution of offences relating to 20 non­compliance with AML/CFT requirements A prosecution against a person for an offence under any of sections 99, 100 and 101 must be commenced— (a) within 6 months of the date on which the prosecutor is satisﬁed that there is sufﬁcient evidence to warrant the 25 commencement of proceedings; but not later than 3 years after the offence was committed.
(b) 103 Penalties (1) A person who commits an offence under section 99 is liable, on conviction, to,— (a) in the case of an individual, either or both of the follow­ ing: (i) (ii) a term of imprisonment of not more than 2 years: a ﬁne of up to $300,000; and 30 70 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 3 cl 107 (b) in the case of a body corporate, a ﬁne of up to $5 million.
(2) A person who commits an offence under either of section 100 or 101 is liable, on conviction, to,— (a) in the case of an individual, either or both of the follow­ ing: (i) a term of imprisonment of not more than 3 months: a ﬁne of up to $10,000; and (ii) in the case of a body corporate, a ﬁne of up to $50,000.
(b) Offences relating to cross­border transportation of cash 104 Failure to report cash over applicable threshold value 5 10 moved into or out of New Zealand A person commits an offence if the person fails, without rea­ sonable excuse, to make or cause to be made a cash report, in 15 accordance with subpart 6 of Part 2, concerning cash over the applicable threshold value that the person has moved into or out of New Zealand.
105 Failure to report cash over applicable threshold value received by person in New Zealand from overseas A person commits an offence if the person fails, without rea­ sonable excuse, to make or cause to be made a cash report, in accordance with subpart 6 of Part 2, concerning cash over the applicable threshold value that the person has received in New Zealand from overseas.
106 Structuring cross­border transportation to avoid application of AML/CFT requirements A person commits an offence if the person structures a cross­ border transportation of cash to avoid the application of any AML/CFT requirements.
107 Defence It is a defence to an offence under section 104 or 105 in rela­ tion to a failure to make or cause to be made a cash report to a 20 25 30 71 Part 3 cl 108 Anti­Money Laundering and Countering Financing of Terrorism Bill Customs ofﬁcer before cash leaves the control of the Customs if the defendant proves that— (a) the failure was due to some emergency or to any other circumstances outside the reasonable control of the de­ fendant; and the defendant made or caused to be made a report in respect of that cash as soon as practicable after the obli­ gation to make the report arose.
(b) 5 Compare: 1996 No 9 s 40(3) 108 Providing false or misleading information in connection 10 with cash report A person commits an offence if, without reasonable excuse, the person makes or causes to be made a cash report knowing it is false or misleading in any material respect.
Compare: 1996 No 9 s 40(1)(b) 109 Offence to obstruct or not to answer questions from Customs ofﬁcer (1) A person commits an offence if the person wilfully obstructs any Customs ofﬁcer in the exercise of any power conferred or performance of any duty imposed on that ofﬁcer by this Act.

(2) A person commits an offence if, without reasonable excuse, the person fails to answer questions from a Customs ofﬁcer.
Compare: 1996 No 9 s 40(2) 15 20 110 Penalties A person who commits an offence under any of sections 104, 25 105, 106, 108, and 109 is liable, on summary conviction, to,— (a) in the case of an individual, either or both of the follow­ ing: (i) a term of imprisonment of not more than 3 30 months: a ﬁne of up to $10,000; and (ii) in the case of a body corporate, a ﬁne of up to $50,000.
(b) 72 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 3 cl 112 111 Chief executive of New Zealand Customs Service may (1) (2) (3) deal with cash reporting offences This section applies if, in any case to which section 104 or 105 applies, a person admits in writing that he or she has com­ mitted the offence and requests that the offence be dealt with 5 summarily by the chief executive of the New Zealand Customs Service.
If this section applies, the chief executive of the New Zealand Customs Service may, at any time before an information has been laid in respect of the offence, accept from that person a 10 sum, not exceeding $500, that the chief executive of the New Zealand Customs Service thinks just in the circumstances of the case, in full satisfaction of any ﬁne to which the person would otherwise be liable under section 110.
If the chief executive of the New Zealand Customs Service 15 accepts any sum under this section, the offender is not liable to be prosecuted for the offence in respect of which the payment was made.

Compare: 1996 No 9 s 41 Relationship with Customs and Excise Act 1996 20 112 Relationship with Customs and Excise Act 1996 (1) Nothing in this Act limits or affects the Customs and Excise (2) (3) (4) Act 1996.
The movement of cash in breach of any requirement of this Act or any regulations is, for the purposes of the Customs and 25 Excise Act 1996, the importation or exportation of a prohibited good.

It is the duty of every Customs ofﬁcer to prevent the movement of cash that is in breach of any requirement of this Act or any regulations.
For the purpose of carrying out the duty in subsection (3), a Customs ofﬁcer may exercise his or her powers under the following sections of the Customs and Excise Act 1996 in re­ lation to uncustomed or prohibited goods: (a) (b) section 145 (questioning persons about goods and debt): 35 section 148 (detention of persons questioned about goods or debt): 30 73 Part 3 cl 113 Anti­Money Laundering and Countering Financing of Terrorism Bill (c) (d) (e) (f) (g) (h) (i) sections 149, 149A, 149B, 149C(1) and (2), and 149D (which relate to search and seizure): sections 151 and 152 (which relate to examination of goods): section 161 (further powers in relation to documents): section 165 (copying of documents obtained during search): section 166 (retention of documents and goods obtained during search): sections 166A to 166F (which relate to seizure and de­ 10 tention of goods suspected to be tainted property): sections 167 to 172 (which relate to search warrants and use of aids by Customs ofﬁcers).
5 Subpart 4—Search and seizure 113 Deﬁnitions 15 In this subpart, unless the context otherwise requires,— document— (a) means any record of information; and (b) includes— (i) (ii) (iii) anything on which there is writing or any image; 20 and anything on which there are marks, ﬁgures, sym­ bols, or perforations that have a meaning for per­ sons qualiﬁed to interpret them; and anything from which sounds, images, or writing 25 can be reproduced, with or without the aid of anything else dwellinghouse means a building, or an apartment, a ﬂat, or a unit within a building, that is used as a private residence enforcement ofﬁcer means the relevant AML/CFT supervisor 30 or the Commissioner (as the case may require) and includes a person appointed under section 135 by an AML/CFT super­ visor evidential material means any thing that there are reasonable grounds for believing is or may be evidence, or may provide 35 or contain evidence, of— (a) an offence under this Part; or 74 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 3 cl 114 an attempt to commit an offence under this Part; or a civil liability act (b) (c) occupier, in relation to any place, includes— (a) a person who is present at the place and is in apparent control of it; and any person acting on behalf of the occupier (b) place— (a) means anywhere on, under, or over any land or water; 5 (b) and includes all or any part of a building, structure, or con­ 10 veyance seize includes to secure against interference thing includes— (a) any substance, article, document, container, or equip­ ment; and anything in electronic or magnetic form.
15 (b) Search warrants Search warrant 114 (1) An enforcement ofﬁcer may apply for a search warrant in re­ (2) spect of a place.

The application must be made in writing, on oath, by an en­ forcement ofﬁcer.

20 (3) A District Court Judge, Justice of the Peace, Community Magistrate, or Registrar may issue a search warrant in respect of a place if satisﬁed that there are reasonable grounds for 25 believing that there is evidential material at that place.
Every search warrant must be in the form prescribed by regu­ lations and be directed to— (a) (b) (c) an enforcement ofﬁcer by name; or a constable by name; or every constable.

(4) 30 (5) Despite a warrant being directed to another person under sub­ (6) section (4), it may be executed by any constable.

The Judge, Justice of the Peace, Community Magistrate, or Registrar issuing the warrant may impose reasonable condi­ 35 tions on its execution.
75 Part 3 cl 115 Anti­Money Laundering and Countering Financing of Terrorism Bill 115 Powers under search warrant (1) A search warrant issued under section 114 authorises the en­ forcement ofﬁcer or constable who is executing it, and any person called on by that ofﬁcer or constable to assist, to do any of the following: (a) 5 (b) (c) (d) enter and search the place at any reasonable time, on 1 occasion within 14 days after the date of the warrant being issued: use reasonable force to— (i) make entry (for example, by breaking open a 10 door); and open any thing at the place that it is reasonable in the circumstances to open: (ii) search for and seize any evidential material at the place: inspect and copy any document; and for that purpose 15 also do any of the following: (i) require any person at the place to produce a par­ ticular document: require any person at the place who has control or knowledge of a document to reproduce, or assist 20 in reproducing, the document in usable form: operate any equipment at the place: remove a document temporarily to another place in order to copy it: (ii) (iii) (iv) (e) (f) take into or onto the place whatever equipment and ma­ 25 terials the enforcement ofﬁcer or constable requires for the search: require the occupier of the place to answer any ques­ tions put by the enforcement ofﬁcer or constable.
(2) An enforcement ofﬁcer or constable may require the occupier 30 of the place to do the following: (a) (b) hold any thing at the place in an unaltered state for a speciﬁed period of up to 5 working days: provide a copy of particular documents within a speci­ ﬁed period (which must be a period that is reasonable 35 in the circumstances).

(3) Nothing in this section limits or affects the privilege against self­incrimination.
76 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 3 cl 118 Conduct of entry, search, and seizure 116 Assistance with searches (1) An enforcement ofﬁcer or constable may ask any person to assist the enforcement ofﬁcer or constable with a search under this subpart.

5 (2) A person who assists an enforcement ofﬁcer or constable must be under the supervision of an enforcement ofﬁcer or consta­ ble.
117 Enforcement ofﬁcers to show identity card on request (1) An enforcement ofﬁcer must produce his or her identity card 10 (as issued under section 135(2)) for inspection— (a) (b) on entering a place under this subpart; and at any later time, on request, during a search under this subpart.

(2) An enforcement ofﬁcer who fails to comply with subsection 15 (1) ceases to be authorised to enter the place or to exercise any power under this Act or any regulations with respect to the search.
118 Announcement before entry (1) (2) This section applies whenever an enforcement ofﬁcer or con­ 20 stable enters a place under this subpart, unless the entry is made by consent.

Before entering the place, the enforcement ofﬁcer or constable must— (a) announce that he or she is authorised to enter the place; 25 and give any person at the place an opportunity to consent to the entry.
(b) (3) However, subsection (2) does not apply if the enforcement ofﬁcer or constable believes on reasonable grounds that— (a) announcing entry would frustrate the purpose of the en­ try; or immediate entry to the place is required to ensure the safety of any person.
(b) 30 77 10 15 Part 3 cl 119 Anti­Money Laundering and Countering Financing of Terrorism Bill 119 Details of warrant to be given to occupier If a place is being searched under a warrant, the enforcement ofﬁcer or constable must give a copy of the warrant to the occupier or, if no person is present at the time, must leave a copy of the warrant in a prominent situation, marked for the 5 attention of the occupier.
120 Occupier entitled to be present during search (1) The occupier of a place that is subject to a search under this subpart, and who is present at any time during the search, is entitled to observe the search as it is being carried out.

The right to observe the search ceases if the person observing impedes the search.

This section does not prevent 2 or more parts of the place being searched at the same time.
(2) (3) 121 Use of electronic equipment (1) (2) If an enforcement ofﬁcer, a constable, or a person assisting a search operates electronic equipment found at a place during a search, the ofﬁcer, constable, or person must take all reason­ able care not to damage the equipment or corrupt information stored on it.
If, as a result of a failure to take the care required by sub­ section (1), the owner of the equipment or information, or the occupier of the place that was searched, suffers damage, the owner or occupier may seek damages from the relevant AML/CFT supervisor or the Police (as the case may require) 25 in respect of that damage.
20 (2) 122 Copies of documents seized to be provided (1) When a document that is capable of being copied is seized from a place, it must (if practicable) be copied before the ori­ ginal is removed, and the copy must be left at the place.

If it is not practicable to copy the document before removing it, it must be copied as soon as practicable after it is removed, and (if practicable) the copy must be promptly delivered to the occupier of the place.
Subsection (1) does not apply— (3) 30 35 78 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 3 cl 125 (a) (b) to documents obtained as a result of operating electronic equipment found at the place if the equipment is not seized and the documents remain stored on it; or if an order under subsection (4) has been made.
(4) A District Court Judge, Community Magistrate, or Justice of 5 the Peace may make an order waiving the application of sub­ sections (1) and (2) if satisﬁed that the volume of material to be copied is such that copying it will involve substantial cost and that the cost is not justiﬁed.

(5) An order under subsection (4) may be subject to whatever 10 conditions the person making the order thinks are necessary to protect the interests of the person from whom the documents have been seized.
123 Receipts for things seized (1) A person who seizes any thing during a search under this sub­ 15 part must provide the occupier with a receipt for the thing seized.

(2) A single receipt may be given for more than 1 thing.
124 Application of sections 198A and 198B of Summary (1) (2) Proceedings Act 1957 Section 198A of the Summary Proceedings Act 1957, so far as applicable and with all necessary modiﬁcations, applies in respect of the seizure of any documents under any search war­ rant as if the search warrant had been issued under section 198 of that Act.
Section 198B of the Summary Proceedings Act 1957, so far as applicable and with all necessary modiﬁcations, applies in respect of accessing any documents under any search warrant as if the search warrant had been issued under section 198 of that Act.
Compare: 1996 No 9 s 50 20 25 30 Return and retention of things seized 125 Return and retention of things seized (1) An enforcement ofﬁcer or constable must (subject to any order of a court) immediately return any thing seized under this sub­ 35 79 Part 3 cl 126 Anti­Money Laundering and Countering Financing of Terrorism Bill (2) part to the person from whom it was seized if the reason for the thing’s seizure no longer exists or it is decided that the thing is not to be used in evidence.
If a thing has not been returned under subsection (1) within 90 days of its seizure, the enforcement ofﬁcer or constable 5 must return the thing unless— (a) proceedings in respect of which the thing may afford evidence were instituted within 90 days of its seizure, and those proceedings (including any appeal) have not been completed, or the time within which an appeal may 10 be lodged in those proceedings has not expired; or there is an order in force under section 126 in respect of the thing; or the enforcement ofﬁcer or constable is otherwise au­ thorised to retain, destroy, or dispose of the thing other 15 than by returning it to the person from whom it was seized; or the person to whom it is to be returned cannot be found or does not wish to take back the thing.
(b) (c) (d) (3) A thing may be returned conditionally or under such terms and 20 conditions as the relevant AML/CFT supervisor or the Com­ missioner (as the case may require) thinks ﬁt.

(4) A thing may not be returned if it is, or is liable to be, forfeited to the Crown.

126 Order to retain things seized (1) If an enforcement ofﬁcer or constable wishes to retain any thing seized under this subpart for more than 90 days, he or she may apply to a District Court for an order under this sec­ tion.
25 (2) A District Court Judge, Community Magistrate, or Justice of 30 the Peace may make an order under this section if he or she is satisﬁed that retention of the thing is necessary— (a) for the purpose of investigating an alleged offence or a civil liability act under this Part; or as evidence of an alleged offence or a civil liability act 35 under this Part; or to secure evidence of an alleged offence or a civil liabil­ ity act under this Part.
(b) (c) 80 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 4 cl 127 (3) An order made under this section may be made for any period (4) (5) of up to 4 years.

If made for a shorter period, the order may be renewed at any interval, but the total period of the order, with any renewals, may not exceed 4 years.
Before making an application, the enforcement ofﬁcer or con­ stable must— (a) take reasonable steps to discover who has an interest in the thing; and if practicable, notify each person whom the enforce­ 10 ment ofﬁcer or constable believes has such an interest in the proposed application and any application for a re­ newal.
(b) 5 15 20 Part 4 Institutional arrangements and miscellaneous provisions Subpart 1—Institutional arrangements AML/CFT supervisors 127 AML/CFT supervisors (1) The AML/CFT supervisors are as follows: (a) (b) (c) for banks, life insurers, and non­bank deposit takers, the Reserve Bank of New Zealand (Reserve Bank) is the relevant AML/CFT supervisor: for issuers of securities, trustee companies, futures deal­ ers, collective investment schemes, brokers, and ﬁnan­ 25 cial advisers, the Securities Commission is the relevant AML/CFT supervisor: for casinos, non­deposit­taking lenders, money chang­ ers, and other reporting entities that are not covered by paragraph (a) or (b), the Department of Internal Af­ 30 fairs is the relevant AML/CFT supervisor.
(2) If the products or services provided by a particular reporting entity are covered by more than 1 AML/CFT supervisor,— (a) the AML/CFT supervisors concerned may agree on the relevant AML/CFT supervisor that will be the reporting 35 81 Part 4 cl 128 Anti­Money Laundering and Countering Financing of Terrorism Bill entity’s AML/CFT supervisor for the purposes of this Act; and the relevant AML/CFT supervisor will notify the re­ porting entity accordingly.
(b) (3) the AML/CFT supervisors cannot agree on which 5 If AML/CFT supervisor is to be a reporting entity’s supervisor under subsection (2), then the AML/CFT co­ordination committee must appoint the AML/CFT supervisor for that entity.
128 Functions 10 The functions of an AML/CFT supervisor are to— (a) monitor and assess the level of risk of money laundering and the ﬁnancing of terrorism across all of the reporting entities that it supervises: (c) (b) monitor the reporting entities that it supervises for com­ 15 pliance with this Act and the regulations, and for this purpose to develop and implement a supervisory pro­ gramme: provide guidance to the reporting entities it supervises in order to assist those entities to comply with this Act 20 and the regulations: investigate the reporting entities it supervises and en­ force compliance with this Act and the regulations: co­operate through the AML/CFT co­ordination com­ mittee (or any other mechanism that may be appropri­ 25 ate) with domestic and international counterparts to en­ sure the consistent, effective, and efﬁcient implementa­ tion of this Act.
(d) (e) 129 Powers (1) An AML/CFT supervisor has all the powers necessary to carry 30 out its functions under this Act.
(2) Without limiting the power conferred by subsection (1), an AML/CFT supervisor may,— (a) on notice, require production of, or access to, all records, documents, or information relevant supervision and monitoring of reporting entities for compliance with this Act; and to its 35 82 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 4 cl 130 (b) (c) (d) (e) (f) conduct on­site inspections in accordance with section 130; and provide guidance to the reporting entities it supervises by— (i) (ii) producing guidelines; and preparing codes of practice in accordance with section 60; and providing feedback on reporting entities’ compli­ ance with obligations under this Act and the regu­ lations; and undertaking any other activities necessary for as­ sisting reporting entities to understand their obli­ gations under this Act and the regulations, in­ cluding how best to achieve compliance with those obligations; and (iii) (iv) 5 10 15 co­operate and share information in accordance with sections 43 and 45 by communicating or making arrangements to communicate information obtained by the AML/CFT supervisor in the performance of its functions and the exercise of its powers under this Act; 20 and in accordance with this Act and any other enactment, initiate and act on requests from any overseas counter­ parts; and approve the formation of, and addition of members to, 25 designated business groups.
(3) An AML/CFT supervisor may only use the powers conferred on it under this Act and the regulations for the purposes of this Act.

130 Matters relating to conduct of on­site inspections (1) An AML/CFT supervisor may, at any reasonable time, en­ ter and remain at any place (other than a dwellinghouse or a marae) for the purpose of conducting an on­site inspection of a reporting entity.
30 (2) During an inspection, an AML/CFT supervisor may require 35 the reporting entity to answer questions relating to its records and documents and to provide any other information that the 83 Part 4 cl 131 Anti­Money Laundering and Countering Financing of Terrorism Bill AML/CFT supervisor may reasonably require for the purpose of the inspection.

(3) A person is not required to answer a question asked by an AML/CFT supervisor under this section if the answer would or could incriminate the person.
Before an AML/CFT supervisor requires a person to answer a question, the person must be informed of the right speciﬁed in subsection (3).

(4) 5 (5) Nothing in this section requires any lawyer to disclose any privileged communication (as deﬁned in section 39).

10 Use and disclosure of information 15 (1) (2) (3) 131 Power to use information obtained as AML/CFT supervisor in other capacity and vice versa This section applies to information other than personal infor­ mation.
The Reserve Bank may use any information obtained or held by it in the exercise of its powers or the performance of its functions and duties under the Reserve Bank of New Zealand Act 1989 for the purpose of exercising its powers or perform­ ing its functions and duties under this Act as an AML/CFT 20 supervisor.
The Reserve Bank may use any information obtained or held by it in the exercise of its powers or the performance of its functions and duties under this Act as an AML/CFT supervisor for the purpose of exercising its powers or performing its func­ 25 tions and duties under the Reserve Bank of New Zealand Act 1989.
The Securities Commission may use any information obtained or held by it in the exercise of its powers or the performance of its functions and duties under the Securities Act 1978, the 30 Securities Markets Act 1988, and the Financial Advisers Act 2008 for the purpose of exercising its powers or performing its functions and duties under this Act as an AML/CFT super­ visor.
The Securities Commission may use any information obtained 35 or held by it in the exercise of its powers or the performance of its functions and duties under this Act as an AML/CFT super­ (4) (5) 84 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 4 cl 134 (6) (7) visor for the purpose of exercising its powers or performing its functions and duties under the Securities Act 1978, the Secur­ ities Markets Act 1988, and the Financial Advisers Act 2008.
The Department of Internal Affairs may use any information obtained or held by it in the exercise of its powers or the per­ 5 formance of its functions and duties under the Gambling Act 2003 for the purpose of exercising its powers or performing its functions and duties under this Act as an AML/CFT super­ visor.
The Department of Internal Affairs may use any information 10 obtained or held by it in the exercise of its powers or the performance of its functions and duties under this Act as an AML/CFT supervisor for the purpose of exercising its powers or performing its functions and duties under the Gambling Act 2003.
15 132 Restriction on power to use information under section 131 An AML/CFT supervisor may only use information obtained under section 131 if the person providing the information was advised of the purpose for which the information was ob­ tained at the time he or she provided that information.
20 133 Power to disclose information supplied or obtained as AML/CFT supervisor The Commissioner, the New Zealand Customs Service, or an AML/CFT supervisor may disclose any information (that is not personal information) supplied or obtained by it in the ex­ 25 ercise of its powers or the performance of its functions and duties under this Act to any government agency for law en­ forcement purposes if it is satisﬁed that the agency has a proper interest in receiving such information.
134 Power to use and disclose information supplied or 30 obtained under other enactments for AML/CFT purposes (1) A government agency or an AML/CFT supervisor may disclose to any other AML/CFT supervisor or government agency any information supplied or obtained under an en­ actment listed in subsection (2) if the disclosure of that 35 85 Part 4 cl 135 Anti­Money Laundering and Countering Financing of Terrorism Bill (2) information is necessary or desirable for the purpose of ensuring compliance with this Act and the regulations.
The enactments referred to in subsection (1) are— (a) (b) (c) (d) the Companies Act 1993: the Criminal Proceeds (Recovery) Act 2009: the Customs and Excise Act 1996: the Financial Service Providers (Registration and Dis­ pute Resolution) Act 2008: the Financial Transactions Reporting Act 1996: the Gambling Act 2003: the New Zealand Security Intelligence Service Act 1969: the Proceeds of Crime Act 1991: the Reserve Bank of New Zealand Act 1989: the Securities Act 1978: the Securities Markets Act 1988: the Terrorism Suppression Act 2002.
(e) (f) (g) (h) (i) (j) (k) (l) 5 10 15 135 Enforcement ofﬁcers (1) For the purposes of this Act, an AML/CFT supervisor may ap­ point any employee as an enforcement ofﬁcer, on a permanent 20 or temporary basis, to exercise the powers conferred on the AML/CFT supervisor by this Act.

(2) An AML/CFT supervisor must issue its enforcement ofﬁcers with an identity card.
(3) An enforcement ofﬁcer must— 25 (a) (b) carry his or her identity card at all times when acting as an enforcement ofﬁcer under this Act or the regulations; and return his or her identity card to the relevant AML/CFT supervisor immediately upon ceasing to be an enforce­ 30 ment ofﬁcer.
Financial intelligence functions of Commissioner 136 Financial intelligence functions of Commissioner The ﬁnancial intelligence functions of the Commissioner are 35 to— 86 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Anti­Money Laundering and Countering Financing of Terrorism Bill Part 4 cl 136 receive suspicious transaction reports: produce guidance material, including— (i) (ii) typologies of money laundering and ﬁnancing of terrorism transactions: information for reporting entities on their obliga­ 5 tions to report suspicious transactions and how to meet those obligations: 15 provide feedback to reporting entities on the quality and timeliness of their suspicious transaction reporting: enforce requirements to provide suspicious transaction 10 reports: analyse suspicious transaction reports to assess whether any should be referred to investigative branches of the New Zealand Police and to other law enforcement agen­ cies for criminal investigation: access, directly or indirectly, on a timely basis the ﬁnan­ cial, administrative, and law enforcement information that the Commissioner requires to properly undertake his or her ﬁnancial intelligence functions, including the analysis of suspicious transaction reports: refer to investigative branches of the New Zealand Po­ lice and to other law enforcement agencies any suspi­ cious transaction reports that, in the view of the Com­ missioner, indicate grounds for criminal investigation: refer suspicious transaction reports and feedback pro­ 25 vided to reporting entities on any suspicious transaction reports to AML/CFT supervisors: receive, analyse, and (if appropriate) refer to law en­ forcement agencies any cash reports: receive, analyse, and (if appropriate) refer to law en­ 30 forcement agencies any suspicious property reports: produce risk assessments relating to money laundering offences and the ﬁnancing of terrorism to be used by the Ministry, the Ministry of Justice, AML/CFT super­ visors, and the New Zealand Customs Service: co­operate with the Ministry, the Ministry of Justice, AML/CFT supervisors, the New Zealand Customs Ser­ vice, and any other relevant agencies to help ensure the 35 20 87 Part 4 cl 137 Anti­Money Laundering and Countering Financing of Terrorism Bill effective implementation of the requirements under this Act and the regulations.
137 Powers relating to ﬁnancial intelligence functions of Commissioner The Commissioner may— (a) order production of or access to all records, documents, or information from any reporting entity that is relevant to analysing a suspicious transaction report received by the Commissioner, with or without a court order; and share suspicious transaction reports, cash reports, suspi­ 10 cious property reports, and other ﬁnancial information and intelligence with domestic and international author­ ities for the purposes of this Act and the regulations.
(b) 5 138 Delegation of powers of Commissioner (1) The Commissioner may from time to time in writing, either 15 generally or particularly, delegate to a constable of a level of position not less than inspector the Commissioner’s powers under section 137(a).
(2) Where any constable exercises any power conferred under subsection (1), that constable must, within 5 days after the 20 day on which the constable exercises the power, give the Com­ missioner a written report on the exercise of that power and the circumstances in which it was exercised.
(3) A constable who purports to perform a power under a delega­ tion— (a) is, in the absence of proof to the contrary, presumed to do so in accordance with the terms of that delegation; and (b) must produce evidence of his or her authority to do so, if reasonably requested to do so.

(4) Every delegation under this section is revocable at will and does not prevent the exercise of any power by the Commis­ sioner.
25 30 88 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 4 cl 140 139 Guidelines relating to reporting of suspicious transactions Subject to section 140, the Commissioner must issue, in re­ (1) spect of each kind of reporting entity to which this Act applies, guidelines— (a) setting out any features of a transaction that may give 5 rise to a suspicion that the transaction is or may be— (i) (ii) (iii) relevant to the investigation or prosecution of any person for a money laundering offence; or relevant to the enforcement of the Terrorism Sup­ pression Act 2002; or relevant to the enforcement of the Proceeds of Crime Act 1991 or the Criminal Proceeds (Re­ covery) Act 2009: 10 (b) setting out any circumstances in which a suspicious transaction report relating to such a transaction may be 15 made orally in accordance with section 38(2), and the procedures for making such an oral report.
(2) (3) Suspicious transaction guidelines must be issued in such man­ ner as the Commissioner from time to time determines.

The Commissioner may issue an amendment or revocation of 20 any suspicious transaction guidelines.

(4) Without limiting subsection (1), suspicious transaction guidelines issued under this section may relate to 1 or more kinds of reporting entities, and such guidelines may make different provision for different kinds of reporting entities and 25 different kinds of transactions.
Compare: 1996 No 9 s 24 140 Consultation on proposed guidelines (1) The Commissioner must, before issuing any suspicious trans­ action guidelines,— (a) 30 consult with, and invite representations from, the Pri­ vacy Commissioner under the Privacy Act 1993, and must have regard to any such representations; and give public notice of the Commissioner’s intention to issue the guidelines, which notice must contain a state­ 35 ment— (i) indicating the Commissioner’s intention to issue the guidelines; and (b) 89 Part 4 cl 141 Anti­Money Laundering and Countering Financing of Terrorism Bill (ii) inviting reporting entities that are likely to be af­ fected by the proposed guidelines, and industry organisations that are representative of those re­ porting entities, to express to the Commissioner, within any reasonable period that is speciﬁed in 5 the notice, their interest in being consulted in the course of the development of the guidelines; and consult with, and invite representations from, those re­ porting entities and industry organisations who express such an interest, and must have regard to any such rep­ 10 resentations.
(c) (2) Nothing in subsection (1) prevents the Commissioner from adopting any additional means of publicising the proposal to issue any suspicious transaction guidelines or of consulting with interested parties in relation to such a proposal.

This section applies to any amendment or revocation of any suspicious transaction guidelines.
Compare: 1996 No 9 s 25 (3) 15 141 Availability of guidelines On a request by any reporting entity in respect of which 20 any suspicious transaction guidelines are for the time being in force, or by any industry organisation that represents the reporting entity, the Commissioner must, without charge,— (a) make those guidelines, and all amendments to those guidelines, available for inspection by that reporting en­ 25 tity or, as the case requires, that industry organisation at Police National Headquarters; and provide copies of those guidelines, and all amendments to those guidelines, to that reporting entity or, as the case requires, that industry organisation.
30 (b) Compare: 1996 No 9 s 26 142 Review of guidelines (1) The Commisioner must review from time to time any suspi­ cious transaction guidelines for the time being in force.

90 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 4 cl 144 (2) Sections 139 and 140 apply, with all necessary modiﬁca­ tions, in relation to any such review as if the review were a proposal to issue suspicious transaction guidelines.
Compare: 1996 No 9 s 27 143 Role of Ministry Co­ordination in consultation with other agencies with The Ministry, AML/CFT roles and functions, is responsible for advising on the overall effectiveness of the AML/CFT regulatory system, including— (a) advising the Minister on outcomes and objectives for AML/CFT regulation and how best to achieve these (in­ cluding links to other Ministry initiatives); and (b) monitoring, evaluating, and advising the Minister on 5 10 the performance of the AML/CFT regulatory system in 15 achieving the Government’s outcomes and objectives for it; and advising the Minister on any changes necessary to the AML/CFT regulatory system to improve its effective­ ness; and administering the relevant AML/CFT legislation.
20 (c) (d) 144 AML/CFT co­ordination committee (1) The chief executive must establish an AML/CFT co­ordin­ ation committee consisting of— (a) (b) a representative from the Ministry; and a representative from the New Zealand Customs Ser­ vice; and every AML/CFT supervisor; and a representative of the Commissioner; and such other persons as are invited from time to time by 30 the chief executive in accordance with subsection (2).
(2) Any person invited under subsection (1)(e) must be em­ (c) (d) (e) 25 (3) ployed in a government agency.

The chair of the AML/CFT co­ordination committee is the chief executive.
35 91 Part 4 cl 145 Anti­Money Laundering and Countering Financing of Terrorism Bill 145 Role of AML/CFT co­ordination committee The role of the AML/CFT co­ordination committee is to en­ sure that the necessary connections between the AML/CFT supervisors, the Commissioner, and other agencies are made in order to ensure the consistent, effective, and efﬁcient oper­ 5 ation of the AML/CFT regulatory system.
146 Functions The functions of the AML/CFT co­ordination committee are to— (a) facilitate necessary information ﬂows between the 10 AML/CFT supervisors, the Commissioner, and other agencies involved in the operation of the AML/CFT regulatory system: facilitate the production and dissemination of infor­ mation on the risks of money­laundering offences and 15 the ﬁnancing of terrorism in order to give advice and make decisions on AML/CFT requirements and the risk­based implementation of those requirements: facilitate co­operation amongst AML/CFT supervisors and consultation with other agencies in the development 20 of AML/CFT policies and legislation: facilitate consistent and co­ordinated approaches to the development and dissemination of AML/CFT guidance materials and training initiatives by AML/CFT super­ visors and the Commissioner: facilitate good practice and consistent approaches to AML/CFT supervision between the AML/CFT super­ visors and the Commissioner: provide a forum for examining any operational or pol­ icy issues that have implications for the effectiveness or 30 efﬁciency of the AML/CFT regulatory system.
25 (b) (c) (d) (e) (f) Subpart 2—Miscellaneous provisions Regulations 147 Regulations The Governor­General may, by Order in Council, make regu­ 35 lations for all or any of the following purposes: 92 (a) (b) (c) (d) (e) (f) (g) Anti­Money Laundering and Countering Financing of Terrorism Bill Part 4 cl 147 prescribing requirements (generic and sector­speciﬁc) for standard, simpliﬁed, enhanced, and ongoing cus­ tomer due diligence and any other AML/CFT require­ ments, including, but not limited to, the following: (i) information to be provided or obtained for the 5 purposes of identiﬁcation and veriﬁcation: the circumstances in which a particular type of customer due diligence must be conducted: specifying entities for which a reporting entity may conduct simpliﬁed customer due diligence: the conditions in which third parties may be re­ lied on to conduct customer due diligence: the conditions on which a member of a desig­ nated business group may adopt the AML/CFT programme of another member of the group: requirements for AML/CFT programmes: the circumstances in which corporations are deemed to be afﬁliated: 10 15 (ii) (iii) (iv) (v) (vi) (vii) (viii) the factors that a reporting entity must have re­ gard to when assessing risk: 20 25 excluding certain relationships or banking services from the application of section 26 (which relates to correspondent banking relationships): prescribing instruments to be bearer­negotiable instru­ ments for the purposes of this Act: prescribing the forms of, and the information to be included in, applications, warrants, reports, and other documents required under this Act: prescribing amounts or thresholds that are required to be prescribed for the purposes of this Act: prescribing the information to be included in records and the manner in which records are to be kept by re­ porting entities, or any speciﬁed class or classes of re­ porting entities: exempting a reporting entity from its obligation to ob­ 35 tain some or all of the information set out in section 24(1) in relation
 to a speciﬁed transfer or transaction: 30 93 Part 4 cl 148 Anti­Money Laundering and Countering Financing of Terrorism Bill (h) (i) (j) (k) (l) (m) (n) (o) 5 prescribing other identifying information that allows a transaction to be traced back to the originator for the purposes of section 24(1): exempting certain movements of cash from the applica­ tion of subpart 6 of Part 2: prescribing matters that apply to politically exposed persons: prescribing the manner in which any notice, report, or other document required by this Act is to be given or served: prescribing for the form of a formal warning and the manner in which it must be issued: specifying Acts for which disclosure of personal infor­ mation may be made by an AML/CFT supervisor for the purposes of the detection, investigation, and pros­ 15 ecution of offences under the speciﬁed Act: prescribing offences in respect of the contravention of, or non­compliance with, any provision of any regula­ tions made under this section, and prescribing ﬁnes, not exceeding $2,000, that may, on conviction, be imposed 20 in respect of any such offences: providing for any other matters contemplated by this Act or necessary for its administration or necessary for giving it full effect.
10 Compare: 1996 No 9 s 56 25 148 Regulations relating to application of Act (1) The Governor­General may, by Order in Council on the rec­ ommendation of the Minister, make regulations for the follow­ ing purposes: (a) exempting or providing for the exemption of any trans­ 30 action or class of transactions from all or any of the pro­ visions of this Act: prescribing threshold values for the purposes of sec­ tions 65 and 66 and the person or class of persons, transaction or class of transactions, ﬁnancial activity or 35 class of ﬁnancial activities to which that threshold value applies: (b) 94 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 4 cl 148 (c) (d) (e) (f) (g) (h) declaring an account or arrangement to be, or not to be, a facility and the circumstances and conditions in which an account or arrangement is to be, or not to be, a facility for the purposes of this Act: declaring a person or class of persons to be, or not to be, 5 a reporting entity and the circumstances and conditions in which a person or class of persons is to be, or not to be, a reporting entity for the purposes of this Act: declaring a transaction or class of transactions to be, or not to be, an occasional transaction and the circum­ 10 stances and conditions in which a transaction or class of transactions is to be, or not to be, an occasional transac­ tion for the purposes of this Act: declaring a transfer or transaction or a class of transfers or transactions not to be a wire transfer and the circum­ 15 stances and conditions in which a transfer or transaction or class of transfers or transactions is not a wire transfer for the purposes of this Act: declaring a person or class of persons to be, or not to be, a customer and the circumstances and conditions in 20 which a person or class of persons is to be, or not to be, a customer for the purposes of this Act: declaring a person or class of person to be, or not to be, a ﬁnancial institution for the purposes of this Act.
(2) The Minister must, before making any recommendation, have 25 regard to— (a) (b) (c) (d) (e) (f) the purposes of this Act and the Financial Transactions Reporting Act 1996; and the risk of money laundering and the ﬁnancing of ter­ rorism; and the impact on the prevention, detection, investigation, and prosecution of offences; and the level of regulatory burden on a reporting entity; and whether the making of the regulation would create an unfair advantage for a reporting entity or would disad­ 35 vantage other reporting entities; and the overall impact that making the regulation would the have on the integrity of, and compliance with, AML/CFT regulatory regime.
30 95 Part 4 cl 149 Anti­Money Laundering and Countering Financing of Terrorism Bill (3) (b) The Minister must also, before making any recommenda­ tion,— (a) do everything reasonably possible on the Minister’s part to advise all persons who in the Minister’s opinion will be affected by any regulations made in accordance with 5 the recommendation, or representatives of those per­ sons, of the proposed terms of the recommendation and of the reasons for it; and give such persons or their representatives a reasonable opportunity to consider the recommendation and to 10 make submissions on it to the Minister, and the Minis­ ter must consider those submissions; and give notice in the Gazette, not less than 28 days before making the recommendation, of the Minister’s intention to make the recommendation and state in the notice the 15 matters to which the recommendation relates; and (d) make copies of the recommendation available for in­ spection by any person who so requests before any regu­ lations are made in accordance with the recommenda­ tion.
(c) 20 (4) Failure to comply with subsection (3) does not affect the validity of any regulations made under this section.

(5) Any regulations made under this section expire on the day that is 5 years after the date on which the regulations come into force.
25 149 Regulations relating to countermeasures (1) The Governor­General may, by Order in Council made on the recommendation of the Minister, make regulations for, or in relation to, prohibiting or regulating the entering into of trans­ actions or business relationships between a reporting entity 30 and any other person.
Regulations made for the purposes of subsection (1) — (a) may be of general application; or (b) may be limited by reference to any or all of the follow­ ing: (i) (ii) (iii) a speciﬁed transaction: a speciﬁed party: a speciﬁed overseas country.

35 (2) 96 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 4 cl 151 (3) The Governor­General may, by Order in Council, declare a country outside New Zealand to be a prescribed overseas country for the purposes of this section.
(4) Any regulations made under subsection (1) expire on the day that is 5 years after the date on which the regulations come into 5 force.
Compare: Anti­Money Laundering and Counter­Terrorism Financing Act 2006 s 102 (Aust) 150 Consultation not required for consolidation of certain regulations and minor amendments The Minister is not required to comply with section 148(3) in respect of the making of any regulations to the extent that the regulations— (a) revoke any regulations made under section 148 and, at the same time, consolidate the revoked regulations, 15 so that they have the same effect as those revoked regu­ lations; or 10 (b) make minor amendments to regulations.
Compare: 1996 No 9 s 56A Ministerial exemptions 20 151 Minister may grant exemptions (1) (2) (3) 25 a reporting entity or class of reporting entities; or a transaction or class of transactions The Minister may, in the prescribed form, exempt any of the following from the requirements of all or any of the provisions of this Act: (a) (b) The Minister may grant the exemption— (a) (b) Before deciding to grant an exemption and whether to attach 30 any conditions to the exemption, the Minister must have regard to the following: (a) unconditionally; or subject to any conditions the Minister thinks ﬁt.
the intent and purposes of the Financial Transactions Reporting Act 1996: the intent and purpose of this Act and any regulations: (b) 35 97 Part 4 cl 152 Anti­Money Laundering and Countering Financing of Terrorism Bill (c) (d) (e) (f) (g) the risk of money laundering and the ﬁnancing of ter­ rorism associated with the reporting entity, including, where appropriate, the products and services offered by the reporting entity and the circumstances in which the products and services are provided: the impacts on prevention, detection, investigation, and prosecution of offences: the level of regulatory burden to which the reporting en­ tity would be subjected in the absence of an exemption: whether the exemption would create an unfair advan­ 10 tage for the reporting entity or disadvantage third party reporting entities: the overall impact that the exemption would have on the integrity of, and compliance with, the AML/CFT regulatory regime.
15 5 152 Minister must consult before granting exemption Before granting an exemption under section 151, the Minis­ ter must consult with— (a) the Ministers responsible for the AML/CFT super­ visors; and any other persons the Minister considers appropriate having regard to those matters listed in section 151(3).

(b) 153 Requirements relating to exemptions (1) The exemption must include an explanation of the reason for granting the exemption.
The exemption— (a) must be granted for a period speciﬁed by the Minister but that period must not be more than 5 years; and (b) may, at any time, be varied or revoked by the Minister.

The exemption must be notiﬁed in the Gazette.

(2) (3) 20 25 30 Transitional and savings provisions 154 Transitional and savings provisions Transitional and savings provisions relating to the coming into force of this Act are set out in Schedule 1.
98 Anti­Money Laundering and Countering Financing of Terrorism Bill Part 4 cl 155 Consequential amendments, repeals, and revocation 155 Amendments to other enactments (1) The enactments speciﬁed in Part 1 of Schedule 2 are amended in the manner indicated in that part of that schedule 5 (being consequential amendments relating to the bringing into force of provisions relating to cross­border transportation of cash).
The enactments speciﬁed in Part 2 of Schedule 2 are amended in the manner indicated in that schedule (being 10 consequential amendments to other enactments).

The regulations speciﬁed in Part 3 of Schedule 2 are re­ voked.
(2) (3) 99 Schedule 1 Anti­Money Laundering and Countering Financing of Terrorism Bill 5 s 154 Schedule 1 Transitional and savings provisions Offences and breaches of Financial Transactions Reporting Act 1996 This section applies to an offence under, or a breach of, the Fi­ nancial Transactions Reporting Act 1996 that was committed before the commencement of this Act.
If this section applies, then for the purpose of doing the things speciﬁed in subsection (3), the Financial Transactions Re­ 10 porting Act 1996 continues to have effect as if this Act had not been enacted.
The things are as follows: (a) (b) investigating the offence or breach: commencing, continuing, or completing proceedings 15 for the offence or breach: imposing a penalty for the offence or breach (which, for the avoidance of doubt, must be the same as the penalty that applied to the offence or the breach before this Act was enacted).

(c) 20 Barred proceedings Nothing in this Act enables any proceedings to be brought that were barred before the commencement of this Act.
Pending proceedings Any proceedings that have been commenced under the Finan­ 25 cial Transactions Reporting Act 1996 before the commence­ ment of this Act may be continued and completed after that commencement as if this Act had not been enacted, and the Fi­ nancial Transactions Reporting Act 1996 applies accordingly.
1 (1) (2) (3) 2 3 100 Anti­Money Laundering and Countering Financing of Terrorism Bill Schedule 2 Schedule 2 Consequential amendments Part 1 Amendments to Financial Transactions Reporting Act 1996 relating to cross­border transportation of cash s 155 Section 2(1) Deﬁnitions of cash report, control of the Customs, and Customs ofﬁcer: repeal.

Deﬁnition of cash: omit “except in Part 5 of this Act,”.

Part 5 Repeal.
Part 5 Repeal.

Part 2 Amendments to other enactments Crimes Act 1961 (1961 No 43) Section 244: insert after paragraph (b): 5 10 15 “(ba) the enforcement or intended enforcement of the Anti­ Money Laundering and Countering Financing of Ter­ rorism Act 2009; or”.
20 Criminal Proceeds (Recovery) Act 2009 (2009 No 8) Deﬁnition of ﬁnancial institution in section 5(1): repeal and substi­ tute: “ﬁnancial institution means either a person within the mean­ ing of ﬁnancial institution as deﬁned in section 3 of the Finan­ 25 cial Transactions Reporting Act 1993 or as deﬁned in section 4 of the Anti­Money Laundering and Countering Financing of Terrorism Act 2009”.
Customs and Excise Act 1996 (1996 No 27) Section 166A(b)(ii): repeal and substitute: 30 “(ii) subpart 6 of Part 2 of the Anti­Money Laun­ dering and Countering Financing of Terrorism Act 2009; and”.

101 Schedule 2 Anti­Money Laundering and Countering Financing of Terrorism Bill Customs and Excise Act 1996 (1996 No 27)—continued Part 2—continued Section 166C(4): insert after paragraph (b): “(ba) Anti­Money Laundering and Countering Financing of Terrorism Act 2009:”.
Financial Transactions Reporting Act 1996 (1996 No 9) Long Title: insert “the Terrorism Suppression Act 2002 and” after 5 “enforcement of”.

Paragraph (b) of the Long Title: repeal.

Paragraphs (a) to (f), (h), (i), and (k) of the deﬁnition of ﬁnancial institution in section 3(1): repeal.

Section 15(1)(b): insert after subparagraph (i): 10 “(ia) that the transaction or proposed transaction is or may be relevant to the enforcement of the Terror­ ism Suppression Act 2002; or”.
Section 16: insert after paragraph (a): “(ab) that the transaction or proposed transaction is or may be 15 relevant to the enforcement of the Terrorism Suppres­ sion Act 2002; or”.

Section 21(2): insert after paragraph (a): “(ab) the enforcement of the Terrorism Suppression Act 2002:”.

Section 22(1)(b): insert after subparagraph (i): “(ia) that the transaction or proposed transaction is or may be relevant to the enforcement of the Terror­ ism Suppression Act 2002; or”.
Section 24(1)(a): insert after subparagraph (i): “(ia) that the transaction or proposed transaction is or may be relevant to the enforcement of the Terror­ ism Suppression Act 2002; or”.

20 25 Section 28: insert after paragraph (d): “(da) the enforcement of the Terrorism Suppression Act 30 2002:”.

Section 56(1)(b): omit “Parts 2 and 5 of this Act” and substitute “Part 2”.
102 Anti­Money Laundering and Countering Financing of Terrorism Bill Schedule 2 Part 2—continued Misuse of Drugs Act 1975 (1975 No 116) Section 12B(6): insert after paragraph (b): “(ba) the enforcement or intended enforcement of the Anti­ Money Laundering and Countering Financing of Ter­ rorism Act 2009; or”.
5 Mutual Assistance in Criminal Matters Act 1992 (1992 No 86) Deﬁnition of ﬁnancial institution in section 2(1): repeal and substi­ tute: “ﬁnancial institution means either a person within the mean­ ing of ﬁnancial institution as deﬁned in section 3 of the Finan­ 10 cial Transactions Reporting Act 1996 or as deﬁned in section 4 of the Anti­Money Laundering and Countering Financing of Terrorism Act 2009”.
Terrorism Suppression Act 2002 (2002 No 34) Section 44(1)(b): insert “or by a reporting entity” after “by a ﬁnancial 15 institution”.

Section 44(1)(b): insert “or the reporting entity” after “the ﬁnancial institution”.

Section 44(1)(d)(ii): insert “or reporting entity, as the case may be,” after “that Commissioner and the ﬁnancial institution”.

Section 44(2): insert “or the reporting entity” after “the ﬁnancial in­ stitution”.
Section 44(4): insert “or reporting entity” after “ﬁnancial institution” in each place where it appears.
Section 44(5): repeal and substitute: “(5) In this section, section 47, and Schedule 5,— “(a) 20 25 in the case of a ﬁnancial institution to which the Finan­ cial Transactions Reporting Act 1996 applies, facility, ﬁnancial institution, suspicious transaction report, and transaction have the meanings given to them in 30 section 2(1) of that Act; and in the case of a reporting entity to which the Anti­Money Laundering and Countering Financing of Terrorism Act 2009 applies, facility, reporting en­ “(b) 103 Schedule 2 Anti­Money Laundering and Countering Financing of Terrorism Bill Terrorism Suppression Act 2002 (2002 No 34)—continued Part 2—continued tity, suspicious transaction report, and transaction have the meanings given to them in section 4 of that Act.” Section 47(1)(b)(i): insert “or reporting entity” after “ﬁnancial insti­ tution”.
Section 47A(1)(a): insert after subparagraph (i): 5 “(ia) subpart 6 of Part 2 of the Anti­Money Laun­ dering and Countering Financing of Terrorism Act 2009; or”.

Section 47C(5): insert after paragraph (a): “(ab) Anti­Money Laundering and Countering Financing of Terrorism Act 2009:”.

Schedule 5: insert “or reporting entity” after “ﬁnancial institution” in each place where it appears.
Part 3 Regulations revoked Financial Transactions Reporting (Interpretation) Regulations 1997 (SR 1997/48) 10 15 12 104 Wellington, New Zealand: Published under the authority of the New Zealand Government—2009