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Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Government Bill As reported from the Law and Order Committee Commentary Recommendation The Law and Order Committee has examined the Anti-Money Laundering and Coun- tering Financing of Terrorism Amendment Bill, and recommends that it be passed with the amendments shown.

Introduction Money laundering is the process of making money obtained through crime appear legal.
The Anti-Money Laundering and Countering Financing of Terrorism Amend- ment Bill (the AML/CFT Bill) would amend the 2009 Act of the same name.

The Act aims to detect and deter money laundering and the financing of terrorism.

The Act’s obligations concerning risk assessment, monitoring, customer due dili- gence, and reporting currently apply to banks, casinos, and financial institutions.
The bill would extend these obligations to lawyers, conveyancers, accountants, real estate agents, the New Zealand Racing Board, and certain dealers in high-value goods (such as cars, boats, jewellery, and art) when they carry out activities that involve a risk of money laundering or the financing of terrorism.

These sectors, known as the Phase 2 sectors, are at high risk of being targeted by criminals to launder money or to finance terrorism.
The bill would also require the Phase 2 sectors (except dealers in high-value goods) to report large cash transactions and suspicious activity, and to develop and maintain a risk assessment and compliance programme.

High-value dealers would have a limited set of obligations (customer due diligence, cash reporting, and voluntary reporting of suspicious activity) when they deal in cash over a specific threshold.
248—2 2 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Commentary Under the bill as introduced, situations where reporting entities could undertake sim- plified customer due diligence would be expanded, and organisations would have more flexibility to share information to meet the purposes of the Act.

The bill would establish the Department of Internal Affairs as the supervisor of the Phase 2 sectors for anti-money laundering and countering terrorism financing purposes.
The bill seeks to strike a balance between combating crime, minimising costs, and en- abling New Zealand to meet its international obligations.

It also responds to some as- pects of the “Government Inquiry into Foreign Trust Disclosure Rules” conducted in 2016 by John Shewan.

The committee’s recommended changes to the bill In this commentary we discuss the main changes we recommend to the bill.
We have organised our comments by topic, rather than by following the numerical order of the clauses as they appear in the bill.

We do not cover minor or technical changes.

Our changes cover the following topics: • • • • • • • implementation timeframes scope of activities obligations for high value dealers information sharing legal professional privilege customer due diligence exemptions.
Implementation timeframes Clause 6 of the bill as introduced would replace section 6 of the Anti-Money Laun- dering and Countering Financing of Terrorism Act 2009.

This concerns the applica- tion of the Act to reporting entities.

Implementation dates being set by Order in Council As introduced, the obligations in the Act would apply to each of the Phase 2 sectors at a date to be set by the Governor-General by Order in Council, not later than the dates specified in Clause 6(2).
The Regulations Review Committee has expressed concern that the bill would not apply to the reporting entities until a date is set by Order in Council.

This is not in line with usual or best practice for legislation, and would create uncertainty for the affected entities.

We see value in being able to implement the new provisions for each Phase 2 sector within a reasonable time of the relevant regulations and guidance being in place for them.
We appreciate, however, that the proposed commencement provisions do not include automatic commencement if the relevant Orders in Council are not made.
Therefore, we recommend amending all the commencement provisions in clause 6 Commentary Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 3 (including, as discussed below, new section 6(1A) concerning the reporting of suspi- cious activity) to ensure that, if Orders in Council have not been made, the relevant provisions would automatically come into force on the dates specified for each of the sectors.
Implementation deadlines for each sector Clause 6(2) provides for the various sectors to be subject to the following staged im- plementation periods: • • • • • Lawyers and conveyancers would be bound by the provisions by 1 July 2018.

Accountants would be bound by the provisions by 1 October 2018.

Real estate agents would be bound by the provisions by 1 January 2019.

The New Zealand Racing Board and high-value dealers would be bound by the provisions by 1 August 2019.
The legislation would apply to trust and company service providers on 1 July 2018, if they were not already a reporting entity under regulation 17 of the An- ti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011.

Some submitters expressed concern that the proposed timeframes were too short, and worried about being ready to meet their new obligations.

We have carefully consid- ered these views.


We recognise that businesses would need time to prepare for the new requirements.

In particular they would need to develop risk assessments and programmes, put in place the associated procedures and controls, and train staff in the new procedures.

The pro- posed implementation timeframe has been calculated on the basis that relevant regu- lations and guidance would be in place at least six months before the relevant sector was bound by the Act.
The proposed phased approach aims to balance the risks from the sectors continuing without having to meet the AML/CFT obligations, against the work needed to ensure they can comply with the new regime.

Delaying implementation would also affect New Zealand’s next Financial Action Taskforce evaluation, which is scheduled for 2019.

This assessment directly affects New Zealand’s international trade reputation.
We consider that, while the timeline may be challenging for some, overall the phased implementation would provide the various sectors with enough time to prepare for and make changes that are necessary to implement the reforms.

Scope of activities Clause 5 of the bill as introduced would amend section 5 of the Act by inserting, re- placing, amending, and repealing certain definitions.
These definitions describe the entities that would be covered when the AML/CFT re- gime is extended to the Phase 2 sectors.

They also describe the activities within those 4 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Commentary sectors that would trigger the Act’s application.

We recommend amending some of the definitions to make them clearer.
Amendments to definition of “designated non-financial business or profession” We recommend the following amendments to various aspects of the definition of des- ignated non-financial business or profession in clause 5(1).

A designated non-financial business or profession is defined in the bill as a law firm, a conveyancing practitioner, an incorporated conveyancing firm, an accounting prac- tice, a real estate agent, or a trust and company service provider who carries out cer- tain specified activities.
Listed activities apply to all named sectors We recommend amending the definition of designated non-financial business or pro- fession in clause 5(1)(a) to clarify that the list of activities would apply to all of the named sectors, not just to trust and company service providers.
Defining “legal arrangement” We recommend inserting a definition of “legal arrangement” in clause 5(1) to mean a trust, a partnership, a charitable entity, and any other prescribed arrangement that in- volves a risk of money laundering or the financing of terrorism.

This would clarify for reporting entities what types of legal arrangements are meant.
Replacing “engaging in or giving instructions in relation to” In clause 5(1), we recommend amending paragraph (a)(vi) of the definition of “desig- nated non-financial business or profession” so that the provision would read “engag- ing in or giving instructions on behalf of a customer to another person for─”.
This amendment would make it clear that this part of the definition relates to a desig- nated non-financial business or profession, such as a lawyer, who is either acting, or instructing a third party to act, on behalf of someone else.

We note that using a lawyer to distance a criminal from the activities concerned is a well-known approach used by money launderers to disguise money laundering activity.
Amending the words as suggested would also narrow the scope of the activity to fo- cus on the specific transaction.

Reporting entity to take guidance into account We recommend amending clause 5(10) to add the words “if any” to section 5(4) of the Act so that the provision reads “... a reporting entity must take into account guid- ance, if any, on the application of those definitions issued by the relevant AML/CFT supervisor”.
This would mean that if guidance does not exist, a reporting entity must still comply with the Act.

Commentary Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 5 Amendments to make the real estate aspects clearer We consider that the real estate aspects of the definition of “designated non-financial business or profession” could be clearer about what is covered.
In clause 5(1), we recommend amending paragraphs (a)(v) and (vi) of the definition to use the definition of “transaction” from section 4(1) of the Real Estate Agents Act 2008.

This more precise definition would mean that any real estate agent who carries out a transaction as defined in that Act would be covered by the Anti-Money Laun- dering and Countering Financing of Terrorism Act.
Similarly, we recommend amending paragraph (a)(vi)(A) to refer to the definition of “conveyancing” in the Lawyers and Conveyancers Act 2006, but narrowing it to mat- ters that are to effect a “transaction” under the Real Estate Agents Act 2008.

The covered matters are set out in bullet points for clarity.
Recommended changes to other definitions Definition of “law firm” For clarity, we recommend amending the definition of “law firm” to read “a barrister or barrister and solicitor, practising on the barrister’s or barrister and solicitor’s own account (whether in partnership or otherwise)”.

This would cover both categories of practising solicitor: a barrister and a barrister and solicitor.

We recommend deleting clause 5(b) of the definition of “law firm” which refers to partnerships.
This is because a partnership is not a legal person and so cannot, itself, be a reporting entity.

Definition of “existing customer” We consider that the definition of “existing customer” in the bill as introduced could be interpreted to mean that a Phase 2 business would be entitled to treat as an “exist- ing customer” a person who was in an existing business relationship with any report- ing entity, rather than just with the reporting entity in question.
Therefore, we recommend amending the definition of “existing customer” in clause 5(3) to read, “existing customer, in relation to a reporting entity, means a person who was in a business relationship with the reporting entity immediately before any provi- sion of this Act began to apply to the reporting entity”.

Definition of “wire transfer” We recommend replacing the definition of “wire transfer” in clause 5 by inserting new section 5(9A).
The definition would explain what wire transfer means, and up- date the terminology to reflect the Phase 2 sectors.

Our amendment would make it clearer that all reporting entities would be bound by the prescribed transaction report- ing regime if they carry out transactions that are covered by the Act.
6 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Commentary Customer due diligence obligations when lodging suspicious activity report Regulation 5A of the Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Regulations 2011 requires reporting entities to con- duct enhanced due diligence when they lodge a suspicious activity report.
We consid- er it appropriate to make regulation 5A part of the primary legislation so that this ob- ligation is more transparent.

Therefore, we recommend amending clauses 10(1) and 10A to insert section 22A into the Act.

However, we do not think it appropriate to require high-value dealers to conduct en- hanced customer due diligence when they choose to lodge a suspicious activity re- port.

This is because it would not be consistent with their overall AML/CFT obliga- tions.
Therefore, we recommend exempting high-value dealers from this requirement, and requiring them instead to conduct standard customer due diligence when they lodge a suspicious activity report.

New section 22A would make this clear.

Information sharing The bill as introduced would provide new and expanded powers for agencies to share information, including personal information.

We consider that the framework provided for information sharing under clauses 38, 40, and 48 is unduly broad.
It contains unnecessary duplication, and it risks under- mining the privacy protections in other statutes.

We have consulted the Privacy Com- missioner, who shares this view.

Therefore, we recommend retaining some of the existing information-sharing provi- sions in the Anti-Money Laundering and Countering Financing of Terrorism Act, with minor amendments.
These amendments would enable implementation of the re- gime for the Phase 2 sectors, update certain aspects, and include a regulation-making power for additional flexibility.

We consider that the scope of the information-sharing provisions in the existing Act is broadly at an appropriate level.

The provisions are also well understood by the agencies currently using them.
Amendments to the definition of “law enforcement purposes” We recommend deleting the terms “intelligence gathering and analysis” and “national security and defence purposes” from the definition of “law enforcement purposes” in clause 5 of the bill.

We consider that these terms are too broad, and that the purposes for disclosure need to be more clearly defined.

We also recommend replacing the word “includes” at the start of the definition with “means”.
This would provide certainty about the scope of the definition.

We recommend deleting paragraph (d)(vii) of the definition of “law enforcement pur- poses” to remove the ability to expand the definition by regulation.

This definition is central to the information-sharing regime under the bill, and it is not appropriate to have it amended by regulation.
We recommend adding the following law enforcement purposes to the definition: Commentary Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 7 • • • the prevention, disruption, detection, investigation, and prosecution of an of- fence under the Terrorism Suppression Act 2002 the performance by the Security Intelligence Service or the Government Com- munications Security Bureau of their functions under the Intelligence and Se- curity Act 2017 the detection and prevention of harms specified in section 58(2) of the Intelli- gence and Security Act 2017 (which include terrorism, violent extremism, es- pionage, sabotage, and proliferation of weapons of mass destruction).
This would allow relevant agencies to share information about both money launder- ing and terrorism financing, and the underlying offences.

We recognise that investi- gating the underlying offences is an important part of detecting and deterring money laundering and terrorism financing.

Being able to undertake this work is necessary for the effective functioning of the AML/CFT regime.

Removal of “regulatory purposes” We recommend removing the term “regulatory purposes” from the bill.
It is not spe- cific, and we are concerned that it could be read to include functions outside the pur- poses of the Act.

Suspicious activity reports Clause 18 would replace subpart 2 of Part 2 of the Act, which deals with suspicious transaction reports.

New subpart 2 would expand the scope of what must be reported to the Financial Intelligence Unit of the New Zealand Police by replacing these re- ports with broader suspicious activity reports.
We recommend amending clause 18 to update section 46 of the Act to reflect the change from suspicious transaction reports to suspicious activity reports.

We also recommend amending clause 18 to delete the regulation-making power in proposed clause 46(2)(f) of the bill as introduced.

The proposed general regulation- making power for information sharing, provided under clause 38, would make this provision redundant.
We recommend amending clause 6 to insert new section 6(1A), which states that the sections of the Act relating to suspicious activity reports (other than those relating to privileged communication) would not apply until 1 July 2018 or an earlier date ap- pointed by the Governor-General by Order in Council.

We recommend amending clause 18 so that existing section 48 remains in the Act.
Power to disclose information Clause 38 would replace section 139 of the Act by setting out a power to disclose in- formation in certain circumstances.

We have concerns about the breadth and implica- tions of these provisions.

Therefore, we recommend amending clause 38 to delete clauses 139 and 139A of the bill as introduced.
This would mean retaining section 139 as it appears in the Act at 8 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Commentary present, with some amendments that are needed to enable the Phase 2 sectors to im- plement the AML/CFT regime.

Regulations relating to information sharing We recommend amending clause 38 to insert section 139(2) and (3) in the Act.
Sec- tion 139(2) would provide the power to share information for law enforcement pur- poses, in accordance with regulations made under section 139A.

This provision would begin with the proviso “If not authorised under this Act”.

The new section would provide a mechanism to authorise information sharing between parties (includ- ing reporting entities), where appropriate and justified, thus providing flexibility to the information-sharing regime.
We recommend the addition of clause 38A to insert new section 139A in the Act.

This new section would provide for the Governor-General, by Order in Council, to make regulations relating to information sharing, with the following safeguards.

New section 139A(1) would provide that regulations could be made for the purpose of spe- cifying the type of information that may or may not be disclosed, and prescribing conditions for the disclosure and use of that information.
New section 139A(2) would provide that, before making regulations the Minister must consult the Privacy Com- missioner, among other people.
Privacy Act 1993 may allow personal information to be shared Our proposed new section 139(3) would add an avoidance of doubt clause stating that “Nothing in this section limits the Privacy Act 1993.” This would make it clear that, although section 139 does not cover personal information, the Privacy Act may still allow some personal information to be shared in certain situations.

Use and disclosure of information obtained under other enactments Clause 39 would amend section 140 of the Act.
We recommend deleting “law en- forcement or regulatory purposes” from the title of this section in the bill as intro- duced.

This would mean that the section is concerned with the power to use and dis- close information supplied or obtained under other enactments for AML/CFT pur- poses.

We recommend amending clause 39 to insert “reasonable grounds to believe” in sec- tion 140(1).
This would help the disclosing entity to consider whether the disclosure is necessary or desirable for ensuring compliance with the Act and regulations.

We also recommend inserting section 39(2)(ta) to include the Secondhand Dealers and Pawnbrokers Act 2004 in the list of enactments in section 140.
The sharing of databases Clause 40 of the bill as introduced would insert new section 140A in the Act to pro- vide for officials to enter into written agreements to facilitate access to databases be- tween government agencies for law enforcement purposes.

Commentary Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 9 We recommend deleting clause 40 to remove section 140A from the bill.
We share the Privacy Commissioner’s concern that this section would inappropriately give officials the power to enter into direct access agreements.

It would also be inconsistent with the Intelligence and Security Act 2017, and the Customs and Excise Bill as reported to the House by the Foreign Affairs, Defence and Trade Committee, both of which would require ministerial approval for direct access agreements.
With the removal of proposed section 140A, agencies that work on anti-money laun- dering and countering the financing of terrorism (for example the Police or the De- partment of Internal Affairs) may still be able to enter into domestic data access agreements, in the form of an Approved Information Sharing Agreement (AISA) under the Privacy Act 1993.
AISAs can be used between government agencies or be- tween a government agency and a reporting entity, but cannot be used to enable the sharing of personal information between reporting entities.

Financial intelligence functions of Police Commissioner We recommend amending clause 41 to delete sections 142(a) and (ab) from the bill as introduced, and to retain the Act’s existing section 142.
This is consistent with our earlier recommended amendments to retain the information-sharing provisions in the Act with minor changes to enable the implementation of Phase 2.

Our amendment to clause 41 would mean that the Police Commissioner would continue to be able to re- ceive, analyse, and refer specified reports to the investigative branch of the Police, and to other law enforcement agencies.
However, we recommend some minor amend- ments to update wording so that it is applicable to the Phase 2 sectors, such as replac- ing “suspicious transaction” with “suspicious activity”.

We also recommend amending clause 41 to insert section 142(ka).
This new section would provide for the Police Commissioner to receive and analyse financial intelli- gence relating to law enforcement purposes from international authorities that per- form functions broadly equivalent to the Commissioner’s financial intelligence func- tions.

We recommend amending clause 42 to delete section 143(1) and (2) of the bill as introduced and to retain existing section 143 of the Act.
However, we recommend some updates to include the terms “suspicious activity reports”, “prescribed transac- tion reports”, “regulators”, and “information received by the Commissioner under this Act”.

We also recommend including new section 143(2) to provide for privilege to be claimed in relation to requests for documents by the Police under section 143.
Legal professional privilege We consider that the bill needs to strike a careful balance between protecting properly privileged information, and making non-privileged information available.

Therefore, we recommend amending clause 18, section 40(4) of the Act, to make it clear that a lawyer may only withhold privileged information when they believe, on reasonable grounds, that the information is privileged in terms of section 42, which defines privileged communication.
10 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Commentary Defence concerning privileged information We recognise the difficulty inherent where lawyers self-assess whether privilege ap- plies in a given situation.

We consider it appropriate to afford some protection from prosecution and disciplinary action that could arise from reporting or non-reporting by lawyers who have reasonable grounds to rely or not rely on privilege.
Therefore, we recommend amending clause 27 to insert section 92(2).

This would provide that a lawyer who believes on reasonable grounds that information is privil- eged has a defence to the offence of failing to file a suspicious activity report in re- gard to such information.

We also recommend amending clause 18 to replace section 44(4).
New section 44(4) would make it clear that there would be no defence to civil, criminal, or disciplinary action against a lawyer for disclosing privileged information if the information was disclosed or supplied in bad faith.

New section 44(4) also provides that there would be no defence if a lawyer disclosing or supplying information did so despite there be- ing reasonable grounds to believe that the information was a privileged communica- tion.
We consider that these amendments emphasise the need to make reasonable case-by- case assessments.

They are consistent with the more generic immunity from civil or criminal liability, available under section 77 of the Act, that applies to all reporting entities that act reasonably and in good faith.
Clarifying when privilege can be claimed We recommend inserting clauses 36A and 36B, and amending clause 42, to make it clear that privilege could be claimed in relation to: • • • onsite inspections by supervisors under section 133 requests for documents by supervisors under section 132 requests for documents by the Police under section 143.

This would preserve the ability to claim privilege and refuse to provide information, which is already inherent via the common law.
Resolving disputes about privilege We recommend inserting clause 51A, section 159A, to allow either the person claim- ing privilege or the requester to ask a District Court Judge to determine the validity of a claim of privilege under sections 132(4), 133(5), or 143(3).

This would provide a mechanism to resolve any impasse in such situations.

Under new section 159A(2) the District Court Judge could require the information or document to be produced for the purposes of determining the application.
We also recommend amending clauses 18 and 42, and inserting clauses 36A and 38B, to make it clear that privilege could be claimed by non-legal staff in legal practices who have an obligation to report a suspicious activity.
Commentary Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 11 Circumstances when standard customer due diligence applies The degree of due diligence (simplified, standard, or enhanced) required under the law varies according to the money laundering and terrorism financing risk presented by the customer, transaction, or activity.

Clause 8 would amend section 14 of the Act to adjust the circumstances when stand- ard customer due diligence applies.
Section 14(2) would provide that, if a reporting entity becomes aware that an existing account is anonymous, it must conduct standard customer due diligence in respect of that account as soon as practicable.

We recommend inserting clause 7A to specify that, for designated non-financial busi- nesses or professions, customer due diligence must be conducted only when these en- tities undertake specified activities under the Anti-Money Laundering and Countering Financing of Terrorism Act.
We recommend inserting clauses 8A and 11A to amend sections 16(3)(b) and 24(3)(b) of the Act to replace the words “and account monitoring” with “and account monitoring or (if the reporting entity is not a financial institution) through other ap- propriate risk management procedures”.

This new wording would ensure that the Phase 2 sectors were covered, as well as the Phase 1 sectors.
We recommend inserting a definition of “occasional activity” in clause 5, and amend- ing the principal Act through the amendments in Schedule 2, to make it clear that the performance of any of the activities applying to Phase 2 sectors would automatically trigger customer due diligence, whether these activities were done on a one-off basis or not.
We consider that this would cover the activities relevant to the Phase 2 sectors, which include acting as a formation agent of legal persons or arrangements, and en- gaging in transactions on behalf of any person in relation to the buying or selling of businesses or legal persons.

Commencement of reliance provision Clause 15 would amend section 33 of the Act to enable a reporting entity to rely on another reporting entity and not be liable for this reliance where certain conditions are met.
In the bill as introduced, the commencement date for this provision is the day after the bill receives Royal assent.

We recommend amending clause 15, section 33(3A)(d), so that it reads “the conditions (if any) prescribed by regulations are complied with”.

This would provide for the reliance provisions to come into force on the day after Royal assent, whether or not the required regulations had yet been promulgated.
Prohibitions if customer due diligence not conducted We recommend amending clause 17 to insert new section 37(2) in the Act.

This new section would make it clear that where a reporting entity was unable to conduct cus- tomer due diligence in regard to the specific activities set out in the Act, it would not be prohibited from establishing or continuing a business relationship with a customer in respect of an activity outside those specified in the Act.
12 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Commentary Simplified customer due diligence Simplified customer due diligence involves conducting a lower level of due diligence on low-risk entities.

Clause 9 would expand the list of specified customers that could be subject to simplified customer due diligence to include more State-owned enterpri- ses and other low-risk entities.
We consider that this would result in lower compliance costs when dealing with low-risk entities.

This approach is consistent with that taken by our international partners.

We have considered proposals to extend the simplified customer due diligence provi- sions to Australian Financial Services Licence holders and Authorised Deposit-taking Institutions.

However, our view is that including such entities in primary legislation is not appropriate.
We consider that any further extensions should be considered through the development of regulations or class exemptions.

Also, prescribing approved countries in legislation or regulation is not appropriate.

The risk of money laundering and terrorism financing is dynamic and contextual, and reporting entities must determine for themselves the level of risk they are comfortable with.
Having a centralised register of beneficial ownership information We have considered the suggestion made by some submitters of creating a centralised register of the beneficial ownership of companies and trusts, that would be available to reporting entities.

Such a register could also record recent checks on companies and trusts made under the Act by reporting entities.
We acknowledge the potential benefits and reduced compliance costs of having a cen- trally maintained register of the beneficial owners of companies and trusts.

We under- stand that the Ministry of Business, Innovation and Employment (MBIE) is undertak- ing preliminary work on a beneficial ownership register in relation to companies.

The Shewan Report also referred to a central registry of beneficial owners.
However, we are also aware that the United Kingdom’s experience of establishing a beneficial ownership register for trusts has so far proved to be complex and time-con- suming.

Given this, and the nature and extent of trusts in New Zealand, we recom- mend that officials maintain a watching brief on the progress being made by MBIE on a central register of beneficial owners of companies, and on the effectiveness of simi- lar measures in other jurisdictions.
Minister may grant exemptions Clause 51 of the bill as introduced would provide for the Secretary for Justice to grant exemptions to any individual from any or all of the provisions in the Act.

We do not consider that the Secretary for Justice is the appropriate person to hold this authority, considering the breadth and nature of the exemption power.

Therefore, we recommend amending clause 51, section 157 of the Act, so that the Minister of Just- ice retains the power to grant these exemptions.
This would maintain the current flex- ibility in the Act to respond on a case-by-case basis to entities that are low risk and Commentary Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 13 have disproportionately high compliance costs, balanced by appropriate ministerial oversight.
Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Commentary 14 Appendix Committee process The Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill was referred to the Law and Order Committee on 23 March 2017.

The closing date for submissions was 20 April 2017.

We received and considered 31 submissions from interested groups and individuals.

We heard oral evidence from 18 submitters.


We received advice from the Ministry of Justice, the Department of Internal Affairs, and the New Zealand Police.

The Regulations Review Committee reported to us on the powers contained in clauses 6 and 38.
Committee membership Kanwaljit Singh Bakshi Mahesh Bindra David Clendon Ian McKelvie Stuart Nash Maureen Pugh Aupito William Sio Lindsay Tisch Jonathan Young Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Key to symbols used in reprinted bill As reported from a select committee text inserted unanimously text deleted unanimously Hon Amy Adams Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Government Bill Contents 7A 7B 8 8A 9 10 10A Title Commencement Principal Act Part 1 Amendments to principal Act Transitional, savings, and related provisions Section 4 amended (Overview) Section 5 amended (Interpretation) Section 6 replaced (Application of this Act to reporting entities) Application of this Act to reporting entities 6 Section 7 amended (Amounts not in New Zealand currency) New section 7A inserted (Transitional, savings, and related provisions) 7A Section 11 amended (Customer due diligence) Section 14 amended (Circumstances when standard customer due diligence applies) Section 16 amended (Standard customer due diligence: verification of identity requirements) Section 18 amended (Circumstances when simplified customer due diligence applies) Section 22 amended (Circumstances when enhanced customer due diligence applies) New section 22A inserted (Enhanced customer due diligence required for certain activities requiring suspicious activities report) 248—2 Page 5 5 6 6 6 15 15 17 17 17 17 17 18 18 19 19 1 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 22A Enhanced customer due diligence required for certain activities requiring suspicious activities report Section 23 amended (Enhanced customer due diligence: identity requirements) Section 24 amended (Enhanced customer due diligence: verification of identity requirements) Section 27 amended (Wire transfers: identity requirements) New section 27A inserted (Other identifying information prescribed in relation to wire transfers) 27A Other identifying information prescribed in
 relation to wire transfers Section 29 amended (Corresponding banking relationships) Section 31 amended (Ongoing customer due diligence and account monitoring) Section 32 amended (Reliance on member of designated business group) Sections 33 amended (Reliance on other reporting entities or persons in another country) Section 36 amended (Protection of personal information and designated business groups) Section 37 amended (Prohibitions if customer due diligence not conducted) Subpart 2 of Part 2 replaced 39A 40 41 42 43 44 45 46 47 48 Subpart 2—Suspicious activity reports Interpretation Reporting entities to report suspicious activities Nature of suspicious activity report Privileged communication defined Auditors may report suspicious activities Protection of persons reporting suspicious activities Immunity from liability for disclosure of information relating to money laundering transactions Disclosure of information relating to suspicious activity reports Disclosure of information in proceedings Disclosure of personal information relating to employees or senior managers New section 49A inserted (Obligation to keep reports of suspicious activities) 49A Section 51 amended (Obligation to keep other records) Section 57 amended (Minimum requirements for AML/CFT programmes) Obligation to keep reports of suspicious activities 19 20 20 20 20 21 21 21 21 21 22 22 22 22 23 23 24 25 25 26 27 28 28 29 29 29 29 11 11A 12 12A 12B 25A 26 27 28 29 30 31 32 32A 33 34 34A 35 36 36A 36B 37 38 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Section 59 replaced (Review and audit of risk assessment and AML/CFT programme) 59 Review and audit of risk assessment and AML/CFT programmes Audit of compliance with AML/CFT obligations Who carries out audit 59A 59B Section 68 amended (Reports about movement of cash into or out of New Zealand) Section 69 amended (Reports about receipt of cash from outside New Zealand) Section 70
 amended (Reporting requirements) Section 76 amended (Protection for AML/CFT supervisors) Cross-heading above section 92 amended Section 92 amended (Failing to report suspicious transaction) Section 93 amended (Providing false or misleading information in connection with suspicious transaction reports or prescribed transaction reports) Section 94 amended (Unlawful disclosure of suspicious transaction reports or prescribed transaction reports) Section 95 amended (Failure to keep or retain adequate records relating to suspicious transactions or prescribed transactions) Section 96 amended (Obstruction of investigation relating to suspicious transaction reports or prescribed transaction reports) Section 99 amended (Time limit for prosecution of offences relating to civil liability act and suspicious transaction reports or prescribed transaction reports) Section 102 amended (Offence to obstruct AML/CFT supervisor) Section 106 amended (Failure to report cash over applicable threshold values moved into or out of New Zealand) Section 107 amended (Failure to report cash over applicable threshold value received by person in New Zealand from overseas) Section 111 amended (Offence to obstruct or not to answer questions from Customs officer) Section 117 amended (Search warrant) Section 130 amended (AML/CFT supervisors) Section 132 amended (Powers) Section 133 amended (Matters relating to conduct of on-site inspections) Section 137 amended (Power to use information obtained as AML/CFT supervisor in other capacity and vice versa) Section 139 replacedamended (Power to disclose information supplied or obtained as AML/CFT supervisor) Power to disclose information 139 Regulations relating to information sharing 139A 29 29 30 30 30 30 30 31 31 31 31 31 32 32 32 32 32 32 32 32 33 33 33 33 33 33 34 3 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill New section 139A inserted (Regulations relating to information sharing) 139A Regulations relating to information
 sharing Section 140 amended (Power to use and disclose information supplied or obtained under other enactments for law enforcement or regulatory purposesAML/CFT purposes) New section 140A inserted (Data access for law enforcement purposes) 140A Section 142 amended (Financial intelligence functions of Commissioner) Section 143 replaced amended (Powers relating to financial intelligence functions of Commissioner) 143 Data access for law enforcement purposes Powers relating to financial intelligence functions of Commissioner Section 144 amended (Delegation of powers of Commissioner) Section 145 amended (Guidelines relating to reporting of suspicious transactions) Section 146 amended (Consultation on proposed guidelines) Section 147 amended (Availability of guidelines) Section 148 amended (Review of guidelines) Section 153 amended (Regulations) Section 154 amended (Regulations relating to application of Act) New section 156A and cross-heading inserted Review provision 156A Sections 157 to 159 and cross-heading above section 157 replaced Review of operation of Act Exemptions Chief executive may grant exemptions 157 Chief executive must consult before granting exemption 158 159 Requirements relating to exemptions Section 157 amended (Minister may grant exemptions) New section 159A and cross-heading inserted Resolution of disputes about privilege Procedure for testing assertions that document privileged 159A Section 160 and cross-heading repealed Sections 162 and 163 repealed Schedule 1 amended Consequential amendments to principal Act 35 35 35 36 36 37 38 38 39 39 39 40 40 40 40 40 41 41 41 42 42 42 43 43 43 43 43 44 38A 39 40 41 42 43 44 45 46 47 48 49 50 51 51 51A 51B 52 52A 52B 4 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 2 Amendments to other enactments and repeal 53 53A 54 55 56 Amendments to Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011 Amendment to Anti-Money Laundering and
 Countering Financing of Terrorism (Prescribed Transactions Reporting) Regulations 2016 Amendments to Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Regulations 2011 Amendments to Financial Transactions Reporting Act 1996 Financial Transactions Reporting Act 1996 repealed Schedule 1 Amendments to Schedule 1 of principal Act Schedule 2 Consequential amendments to principal Act Schedule 3 New Schedule 2 inserted cl 2 44 44 44 44 45 46 48 50 The Parliament of New Zealand enacts as follows: 1 Title This Act is the Anti-Money Laundering and Countering Financing of Terrorism Amendment Act 2016.
2 (1) (2) (3) (4) (5) (6) Commencement This Act (except sections 53, 54, 55(2) to (5), and 56) comes into force on 1 July 2017 the day after the date on which it receives the Royal assent.

Sections 53, 54, and 56 come into force on a date (not later than 1 July August 2019) or on an earlier date appointed by the Governor-General by Order in Council.

Section 55(2) comes into force on a date (not later than 1 January 2019) or on an earlier date appointed by the Governor-General by Order in Council.
Section 55(3) comes into force on a date (not later than 1 July 2019) 1 Au- gust 2019 or on an earlier date appointed by the Governor-General by Order in Council.

Section 55(4) comes into force on a date (not later than 1 July 2018) or on an earlier date appointed by the Governor-General by Order in Council.

Section 55(5) comes into force on a date (not later than 1 October 2018) or on an earlier date appointed by the Governor-General by Order in Council.
5 10 15 5 cl 3 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 3 Principal Act This Act amends the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the principal Act).
Part 1 Amendments to principal Act 5 4 Section 4 amended (Overview) Replace section 4(3)(b) with: (b) subpart 2 includes provisions dealing with requirements on reporting en- tities to report suspicious activities and protection of persons making suspicious activity reports: 10 5 (1) Section 5 amended (Interpretation) In section 5, insert in their appropriate alphabetical order: accounting practice means— (a) (b) an accountant in public practice on his or her own account (whether in partnership or otherwise): 15 in relation to 2 or more accountants in public practice, and practising in partnership, the partnership: (c) an incorporated accounting practice approved entity means an entity— (a) (b) that is prescribed by regulations as an approved entity; or that comes within a class of entities prescribed by regulations as a class of approved entities conveyancing practitioner has the meaning given to it by section 6 of the Lawyers and Conveyancers Act 2006 designated non-financial business or profession means— 20 25 (a) a law firm, a conveyancing practitioner, an incorporated conveyancing firm, an accounting practice, a real estate agent, or a trust and company service provider, who, in the ordinary course of business, carries out 1 or more of the following activities: (i) (ii) (iii) acting as a formation agent of legal persons or legal arrangements: 30 acting as, or arranging for a person to act as, a nominee director or nominee shareholder or trustee in relation to legal persons or legal arrangements: providing a registered office or a business address, a correspond- ence address, or an administrative address for a company, or a partnership, or for any other legal person or arrangement, unless 35 6 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 5 the office or address is provided solely as an ancillary service to the provision of other services (being services that do not consti- tute an activity listed in this subparagraph or subparagraphs (i), (ii), and (iv) to (vi)): (iv)
 managing client funds (other than sums paid as fees for professio- 5 nal services), accounts, securities, or other assets: (v) providing real estate agency work (within the meaning of section 4(1) of the Real Estate Agents Act 2008) that involves the repre- sentation, as an agent, of a vendor or purchaser in connection with the sale or purchase, or the proposed sale or purchase, of real es- tate or any business to effect a transaction (within the meaning of section 4(1) of the Real Estate Agents Act 2008): (vi) engaging in or giving instructions in relation to on behalf of a cus- tomer to another person for— (A) any conveyancing (within the meaning of section 6 of the Lawyers and Conveyancers Act 2006) on behalf of a cus- tomer in relation to the sale or purchase, or the proposed sale or purchase, of real estate; or to effect a transaction (within the meaning of section 4(1) of the Real Estate Agents Act 2008), namely,— • • • • the sale, the purchase, or any other disposal or ac- quisition of a freehold estate or interest in land: the grant, sale, or purchase or any other disposal or acquisition of a leasehold estate or interest in land (other than a tenancy to which the Residential Tenan- cies Act 1986 applies): the grant, sale, or purchase or any other disposal or acquisition of a licence that is registrable under the Land Transfer Act 1952: the grant, sale, or purchase or any other disposal or acquisition of an occupation right agreement within the meaning of section 5 of the Retirement Villages Act 2003: (B) (B) transactions on behalf of any person in relation to the buy- ing or selling of real estate or transferring the title in, or beneficial ownership of, real estate; or a transaction (within the meaning of section 4(1) of the Re- al Estate Agents Act 2008); or (BA) the transfer of a beneficial interest in land or other real property; or 10 15 20 25 30 35 40 7 Part 1 cl 5 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (C) (D)
 transactions a transaction on behalf of any person in rela- tion to the buying, transferring, or selling of businesses or legal persons a business or legal person (for example, com- panies a company) and any other legal arrangements ar- rangement; or transactions a transaction on behalf of a customer in rela- tion to creating, operating, and managing a legal persons person (for example, companies a company) and any other legal arrangements arrangement; and (b) (c) includes a person or class of persons declared by regulations to be a des- ignated non-financial business or profession for the purposes of this Act; but excludes a person or class of persons declared by regulations not to be a designated non-financial business or profession for the purposes of the this Act high-value dealer— (a) means a person who is in trade and in the ordinary course of business, buys or sells all or any of the following articles by way of a cash transac- tion or a series of related cash transactions, if the total value of that transaction or those transactions is equal to or above the applicable threshold value: (i) jewellery: (ii) watches: (iii) (iv) (v) (vi) gold, silver, or other precious metals: diamonds, sapphires, or other precious stones: paintings: prints: (vii) protected foreign objects (within the meaning of section 2(1) of the Protected Objects Act 1975): (viii) protected New Zealand objects (within the meaning of section 30 2(1) of the Protected Objects Act 1975): (ix) (x) (xi) sculptures: photographs: carvings in any medium: (xii) other artistic or cultural artifacts: 35 (xiii) motor vehicles (within the meaning of section 6(1) of the Motor Vehicle Sales Act 2003): (xiv) ships (within the meaning of section 2(1) of the Maritime Trans- port Act 1994); and 8 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 5 (b) (c) includes any person who carries out the activities referred to in para- graph (a) as a registered auctioneer
 (within the meaning of section 4(1) of the Auctioneers Act 2013); but does not include any person, to the extent that the person is engaged in providing services other than the buying or selling of articles referred to in paragraph (a), including the following services: (i) mining precious metals or precious stones: 5 (ii) manufacturing jewellery: (iii) crafting or polishing precious stones; and (d) does not include any person to the extent that the person is engaged in the buying or selling of precious metals or precious stones for industrial purposes 10 incorporated conveyancing firm has the meaning given to it by section 6 of the Lawyers and Conveyancers Act 2006 incorporated law firm has the meaning given to it by section 6 of the Lawyers and Conveyancers Act 2006 15 law enforcement purposes includes means— (a) (b) (c) intelligence gathering and analysis: national security and defence purposes: the prevention, disruption, detection, investigation, and prosecution of— 20 (i) (ii) (iii) any offence under this Act; or a money laundering offence; or any offence within the meaning of section 243(1) of the Crimes Act 1961:; or (iv) an offence under the Terrorism Suppression Act 2002: 25 (d) the enforcement and administration of— (i) (ii) (iii) (iv) (v) (vi) this Act: the Criminal Proceeds (Recovery) Act 2009: the Misuse of Drugs Act 1975: the Terrorism Suppression Act 2002: the Mutual Assistance in Criminal Matters Act 1992: the Customs and Excise Act 1996: (vii) any other enactment prescribed in regulations: (da) the performance by the New Zealand Security Intelligence Service or the Government Communications Security Bureau of its functions under the Intelligence and Security Act 2017: 30 35 9 Part 1 cl 5 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (db) (e) the detection and prevention of the harms specified in section 58(2) of the Intelligence and Security Act 2017: any purpose or action referred to in paragraphs (a) to (d) (db)
 relat- ing to, or taken in respect of, legislation of an overseas jurisdiction that is broadly equivalent to the enactments listed referred to in those para- graphs 5 law firm means— (a) (b) a barrister or barrister and solicitor, practising on the barrister’s or bar- rister and solicitor’s own account (whether in partnership or otherwise): in relation to 2 or more lawyers practising law in partnership, each of the partners in the partnership and the partnership: 10 (c) an incorporated law firm lawyer has the meaning given to it by section 6 of the Lawyers and Convey- ancers Act 2006 legal arrangement means— 15 (a) (b) (c) (d) a trust: a partnership: a charitable entity (within the meaning of section 4(1) of the Charities Act 2005): any other prescribed arrangement (being an arrangement that involves a risk of money laundering or the financing of terrorism) 20 non-bank deposit taker has the meaning given to NBDT by section 5 of the Non-bank Deposit Takers Act 2013 occasional activity— (a) means an activity— 25 (i) (ii) that is specified in section 6(3) in relation to a reporting entity (other than an occasional transaction); and that does not involve a business relationship between the reporting entity and the reporting entity’s customer; and (b) (c) includes an activity or a class of activities declared by regulations to be an occasional activity for the purposes of this Act; but 30 excludes an activity or a class of activities declared by regulations not to be an occasional activity for the purposes of this Act occasional transaction or activity means— (a) (b) an occasional transaction: an occasional activity privileged communication has the meaning set out in section 42 35 10 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 5 real estate agent has the same meaning as the definition of agent in section 4(1) of the Real Estate Agents Act 2008 real estate agency work has the same meaning as in the definition of that term in
 section 4(1) of the Real Estate Agents Act 2008 regulator— (a) means a professional body responsible under any New Zealand enact- ment for enforcing the regulatory obligations of a particular industry or profession whose members are subject to this Act; and (b) includes any other body prescribed in regulations regulatory purposes includes— (a) (b) (c) the work involved in AML/CFT supervision: the enforcement and administration of Acts prescribed in regulations: any purpose or action referred to in paragraph (b) relating to, or taken in respect of, legislation of an overseas jurisdiction that is broadly equivalent to the enactments listed in those paragraphs 5 10 15 search warrant means a warrant issued under section 117 suspicious activity report— (a) means a report made under section 40: (b) includes— (i) (ii) a suspicious transaction report made under this Act; and 20 a suspicious transaction report made under the Financial Transac- tions Reporting Act 1996 trust and company service provider or TCSP means a person (other than a law firm, a conveyancing practitioner, an incorporated conveyancing firm, an accounting practice, or a real estate agent) who carries out any of the activities described in paragraphs (a)(i) to (vi) of the definition of designated non-fi- nancial business or profession.
25 (2) In section 5, replace the definition of designated business group with: designated business group means a group of 2 or more persons in which— (a) (b) (c) each member of the group has elected, in writing, to be a member of the group and the election is in force; and 30 each election was made in accordance with regulations (if any); and no member of the group is a member of another designated business group; and (d) each member of the group is— 35 (i) related to each other member of the group within the meaning of section 2(3) of the Companies Act 1993 and is— (A) a reporting entity resident in New Zealand; or 11 Part 1 cl 5 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (ii) (iii) (B) a person that is resident in a country that has sufficient AML/CFT systems and is supervised or regulated for AML/CFT purposes; or providing a service under a joint venture agreement to which each member of the group is a party; or 5 a government department named in Schedule 1 of the State Sector Act 1988, a State enterprise under the State-Owned Enterprises Act 1986, or a Crown entity under section 7 of the Crown Entities Act 2004; or (iv) (v) related to 1 or more of the entities referred to in subparagraph (iii) through the provision of common products or services; or a body corporate that is— (A) (B) (C) either a company (within the meaning of section 2(1) of the Companies Act 1993) or an overseas company within the meaning of that section; and related (within the meaning of section 12(2) of the Finan- cial Markets Conduct Act 2013) to every body corporate in the designated business group or proposed designated busi- ness group; and either a reporting entity resident in New Zealand or a per- son who is resident in a country that has sufficient AML/CFT systems and that is supervised or regulated for AML/CFT purposes; or (vi) a related law firm, or a subsidiary of a law firm, that is a reporting entity in New Zealand (or the equivalent body in another country that has sufficient AML/CFT systems
 and that is supervised or regulated for AML/CFT purposes); or (vii) a related conveyancer, or a subsidiary of a conveyancer, that is a reporting entity in New Zealand (or the equivalent body in another country that has sufficient AML/CFT systems and that is super- vised or regulated for AML/CFT purposes); or (viii) a related accounting practice, or a subsidiary of an accounting practice, that is a reporting entity in New Zealand (or the equiva- lent body in another country that has sufficient AML/CFT systems and that is supervised or regulated for AML/CFT purposes); or (ix) a related trust and company service provider, or a subsidiary of a TCSP trust and company service provider, that is a reporting enti- ty in New Zealand (or the equivalent body in another country that has sufficient AML/CFT systems and that is supervised or regu- lated for AML/CFT purposes); or 10 15 20 25 30 35 40 12 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 5 (x) (xi) a related real estate agent, or a subsidiary of a real estate agent, that is a reporting entity in New Zealand (or the equivalent in an- other country that has sufficient AML/CFT systems and that is supervised or regulated for AML/CFT purposes); or a related high-value dealer, or a subsidiary of a high-value dealer, that is a reporting entity in New Zealand (or an equivalent person resident outside New Zealand in a country that has sufficient AML/CFT systems and that is supervised or regulated for AML/CFT purposes); or (xii) a group of reporting entities, if the entities are each money trans- fer agents or sub-agents and each entity is related to every other entity in the designated business group or proposed designated business group in either of the following ways: 5 10 (A) (B) one of those entities is a money transfer agent and the other entities are the sub-agents of those agents: 15 those entities are each sub-agents of the same money trans- fer agent; or (xiii) an entity or a class of
 entities prescribed by regulations; and (e) each member of the group satisfies any conditions in subsection (3) that apply to that member 20 (3) In section 5, replace the definition of existing customer with: (4) (5) (6) existing customer, in relation to a reporting entity, means a person who was in a business relationship with a the reporting entity immediately before any pro- visions of this Act began to apply to the reporting entity In section 5, definition of financial institution, paragraph (a)(vii), replace “for the person’s own account or for the accounts of customers in any of the follow- ing:” with “for, or on behalf of, a customer in any of the following using the person’s account or the customer’s account:”.
25 In section 5, definition of occasional transaction, paragraph (a), replace “over” with “equal to or above”.

30 In section 5, definition of prescribed transaction, paragraphs (a) and (b) (as inserted by section 5(1) of the Anti-Money Laundering and Countering Finan- cing of Terrorism Amendment Act 2015), replace “value greater than” with “value equal to or above”.
(7) In section 5, definition of reporting entity, replace paragraph (a) with: 35 (a) means— (i) (ii) (iii) (iv) a casino: a designated non-financial business or profession: a financial institution: a high-value dealer: 40 13 Part 1 cl 5 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (v) the New Zealand Racing Board; and (8) (9) In section 5, repeal the definition of suspicious transaction report.
In section 5, definition of transaction, replace paragraph (c) with: (c) excludes the following: (i) (ii) (iii) the placing of any bet unless authorised under the Racing Act 2003: 5 participation in gambling (as defined in section 4(1) of the Gam- bling Act 2003) unless authorised under the Racing Act 2003): a transaction or class of transactions declared by regulations not to be a transaction for the purposes of this Act 10 (9A) In section 5, replace the definition of wire transfer with— wire transfer— (a) means a transaction carried out on behalf of a person (the originator) through a reporting entity by electronic means with a view to making an amount of money available to a beneficiary (who may also be the origin- ator) at another reporting entity; and (b) includes a transfer or transaction, or class of transfers or transactions, de- clared by regulations to be a wire transfer for the purposes of this Act; but (c) excludes— 15 20 (i) (ii) (iii) transfers and settlements between financial institutions or other re- porting entities if both the originator and the beneficiary are finan- cial institutions or other reporting entities acting on their own be- half; and credit and debit card transactions if the credit or debit card num- ber accompanies the transaction; and 25 any other transfer or transaction or class of transfers or transac- tions declared by regulations not to be a wire transfer for the pur- poses of this Act.
(10) In section 5, insert as subsections (2) to (4): (2) For the purposes of paragraph (d)(xii) of the definition of designated busi- ness group in subsection (1),— money transfer agent, in relation to a money transfer provider, means a re- porting entity that has a representation agreement with a money transfer pro- vider money transfer provider means a person who, under a representation agree- ment, authorises a money transfer agent to carry on money transfer services on behalf of the money transfer provider and to engage sub-agents for the purpose of carrying on those services in New Zealand 30 35 14 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 6 money transfer services means the provision of remittance services that are carried on, otherwise than by a bank, under a single brand, trade mark, or busi- ness name representation agreement means a written agreement between a money trans- fer provider and a money transfer agent, or between a money transfer agent and a sub-agent, that states the terms on which the money transfer agent, or the sub- agent, carries on money transactions for customers relating to creating, operat- ing, and managing companies 5 sub-agent means a reporting entity that has a representation agreement with a money transfer agent.
10 (3) For the purposes of paragraph (e) of the definition of designated business group in subsection (1), a condition of membership is that the contact person of a designated business group must notify the relevant AML/CFT supervisor, in writing within 30 days, of any of the following: (a) (b) (c) the withdrawal of a member from the designated business group: 15 the termination of the designated business group: any other change in the details previously notified to any AML/CFT supervisor in respect of the designated business group.
(4) For the purpose of applying the definitions of designated non-financial busi- ness or profession and designated business group, a reporting entity must take into account guidance (if any) on the application of those definitions issued by the relevant AML/CFT supervisor.
6 Section 6 replaced (Application of this Act to reporting entities) 6 (1) Replace section 6 with: Application of this Act to reporting entities Subject to subsections (1A) and (2) and to Schedule 1, this Act (as amended by the Anti-Money Laundering and Countering Financing of Terror- ism Amendment Act 2017) applies to any reporting entity that is in existence at the close of 30 June 2017 or that comes into existence on or after 1 July 2017.
(1A) Sections 39A to 41 and 43 to 47 (as inserted by section 18 of the Anti- Money Laundering and Countering Financing of Terrorism Amendment Act 2017) do not apply until 1 July 2018 or an earlier date appointed by the Governor-General by Order in Council.
(2) This Act— (a) does not apply to a law firm, a conveyancing practitioner, or an incorpor- ated conveyancing firm until a date (not later than 1 July 2018) or an earlier date set by the Governor-General by Order in Council: 20 25 30 35 15 Part 1 cl 6 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (b) (c) (d) (e) (f) does not apply to an accounting practice until a date (not later than) 1 October 2018) or an earlier date set by the Governor-General by Order in Council: does not apply to a real estate agent until a date (not later than 1 Janu- ary 2019) or an earlier date set by the Governor-General by Order in Council: 5 does not apply to the New Zealand Racing Board or a high-value dealer until a date (not later than 1 August 2019) or an earlier date set by the Governor-General by Order in Council: in the case of a trust and company service provider that immediately be- fore the commencement of this section was a reporting entity under regulation 17 of the Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011, applies on and after the date on which this section comes into force: in the case of a trust or company service provider to which paragraph (e) does not apply, applies on a date (not later than 1 July 2018) or an earlier date set by the Governor-General by Order in Council.
(3) This Act applies to a reporting entity only to the extent that,— (a) (b) (c) (d) in the case of a reporting entity that is a financial institution, the finan- cial activities undertaken by that entity fall within the activities de- scribed in the definition of financial institution in section 5(1): in the case of the New Zealand Racing Board, it carries out the follow- ing: (i) (ii) the conduct of betting under section 50 of the Racing Act 2003: the operation of accounts or provision of vouchers: in the case of a law firm, conveyancer, incorporated conveyancing firm, accounting practice, real estate agent, or other designated non-financial business or profession, the activities carried out by that reporting entity are activities described in the definition of designated non-financial busi- ness or profession in section 5(1): in the case of a high-value dealer,— (i) (ii) the high-value dealer carries out activities described in the defin- ition of high-value dealer in section 5(1); and if subparagraph (i) applies, the high-value dealer— (A) must conduct standard customer due diligence under sec- tions 14(1)(b), 15, and 16: (B) may rely on third parties under sections 32 to 34: (C) must comply with the prohibitions under section 37 if the high-value dealer is unable to conduct standard customer due diligence: 16 10 15 20 25 30 35 40 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 8 (D) may report suspicious activities to the Commissioner under section 40(5) (in which case sections 44 to 46 (which relate to suspicious activities) apply to the high-value deal- er): (E) must report prescribed transactions equal to or above the applicable cash threshold under sections 48A and 48B: 5 (F) must keep records of any suspicious activity reports under section 49A: (G) must keep identity and verification records under section 50 when standard customer due diligence is conducted: 10 (H) must keep records of any audits under section 51(1)(b), (2), and (3): (I) must audit its AML/CFT compliance obligations under section 59A if requested by an AML/CFT supervisor: (e) in the case of a casino, the casino carries out activities that may give rise to a risk of money laundering or financing of terrorism.
15 7 Section 7 amended (Amounts not in New Zealand currency) (1A) In section 7(1), after “Act”, insert “or regulations”.

(2) In section 7(1)(a), replace “exceeds” with “is equal to or above”.

7A New section 7A inserted (Transitional, savings, and related provisions) 20 After section 7, insert: 7A Transitional, savings, and related provisions The transitional, savings, and related provisions set out in Schedule 1 have effect according to their terms.
7B Section 11 amended (Customer due diligence) After section 11(5), insert: (6) Subsections (1) and (3) and sections 14 to 31 do not apply in relation to the provision of services by a reporting entity to a customer, that, in relation to that reporting entity, are not, under section 6(3), activities to which this Act ap- plies.
8 Section 14 amended (Circumstances when standard customer due diligence applies) (1) Replace section 14(d) with: (d) any other circumstances specified in subsection (2) or in regulations.
(2) In section 14, insert as subsections (2) and (3): 25 30 35 17 Part 1 cl 8A Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (2) For the purposes of subsection (1)(d), as soon as practicable after a reporting entity becomes aware that an existing account is anonymous, the reporting enti- ty must conduct standard customer due diligence in respect of that account.
(3) Despite subsections (1) and (2), a real estate agent must conduct standard customer due diligence at the times, and with any other modifications, speci- fied in regulations.

5 8A Section 16 amended (Standard customer due diligence: verification of identity requirements) In section 16(3)(b), replace “and account monitoring” with “and account moni- toring or (if the reporting entity is not a financial institution) through other ap- propriate risk management procedures”.
9 (1) (2) Section 18 amended (Circumstances when simplified customer due diligence applies) Replace section 18(2) with: The following are customers for the purposes of subsection (1): 10 15 (a) (b) (c) (d) (e) (g) (h) (i) (j) a listed issuer (within the meaning of section 6(1) of the Financial Mar- kets Conduct Act 2013) that is the issuer of quoted voting products (within the meaning of that Act): a government department named in Schedule 1 of the State Sector Act 1988: 20 a local authority, as defined in section 5(2) of the Local Government Act 2002: the New Zealand Police: a State enterprise (within the meaning of section 2 of the State-Owned Enterprises Act 1986) and a new State enterprise (as listed in Schedule 2 of that Act): (i) (ii) corresponds to a State enterprise or a new State enterprise (as de- fined in paragraph (e); and is located in a country that has sufficient AML/CFT systems: the New Zealand Security Intelligence Service: a person licensed to be a supervisor or statutory supervisor under the Fi- nancial Markets Supervisors Act 2011, when the person acts for itself: a trustee corporation, within the meaning of section 2(1) of the Adminis- tration Act 1969, when the trustee corporation acts for itself: 35 a Crown entity, as defined in section 7(1) of the Crown Entities Act 2004: 25 30 (f) a body that— (k) an organisation named in Schedule 4 of the Public Finance Act 1989: 18 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 10A (l) a company named in Schedule 4A of the Public Finance Act 1989: (m) a government body that— (n) (o) (p) (i) (ii) corresponds to a government department named in Schedule 1 of the State Sector Act 1988; and is located in an overseas jurisdiction that has sufficient AML/CFT systems: 5 a registered bank within the meaning of section 2(1) of the Reserve Bank of New Zealand Act 1989: a licensed insurer within the meaning of section 6(1) of the Insurance (Prudential Supervision) Act 2010: 10 a company, or a subsidiary (within the meaning of
 section 5(1) of the Companies Act 1993) of that company,— (i) (ii) whose equity securities are listed in New Zealand or on an over- seas stock exchange that has sufficient disclosure requirements; and that is located in a country that has sufficient AML/CFT systems in place: (q) any other entity or class of entities specified in regulations.
(2) After section 18(3), insert: (3A) Despite subsections (1) to (3), a real estate agent must conduct simplified cus- tomer due diligence at the times, and with any other modifications, specified in regulations.

10 Section 22 amended (Circumstances when enhanced customer due diligence applies) (1) In section 22(1)(e), replace “regulations” with “section 22A or regulations”.
25 (2) After section 22(5), insert: (6) Despite subsections (1) to (5), a real estate agent must conduct enhanced cus- tomer due diligence at the times, in the circumstances, and with any other modifications, specified in regulations.
10A New section 22A inserted (Enhanced customer due diligence required for 30 certain activities requiring suspicious activities report) After section 22, insert: 22A Enhanced customer due diligence required for certain activities requiring suspicious activities report (1) This section applies to an activity— 35 (a) that the reporting entity concerned (other than a high-value dealer) is re- quired to report to the Commissioner under section 40; and 19 15 20 Part 1 cl 11 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (b) that is not otherwise exempt from the customer due diligence require- ments or from all the requirements of the Act; and (c) that is conducted, or sought to be conducted,— (i) (ii) by an existing customer; or by a customer engaging in an occasional transaction or activity.
5 (2) For the purposes of section 22(1)(e), as soon as practicable after a reporting en- tity becomes aware that the reporting entity must report the suspicious activity under section 40, a circumstance occurs in which the reporting entity must conduct enhanced customer due diligence in respect of that activity.
10 15 11 Section 23 amended (Enhanced customer due diligence: identity requirements) (1) Replace section 23(b) with: (2) (2) (b) the additional information referred to in subsection (2) and any addi- tional information prescribed by regulations.
In section 23, insert as subsection (2): For the purposes of subsection (1)(b), a reporting entity must obtain,— (a) in the case of a trust other than a trust to which paragraph (b) applies, the name and the date of birth of each beneficiary of the trust: (b) in the case of a customer that is a discretionary trust or a charitable trust or a trust that has more than 10 beneficiaries, a description of— 20 (i) (ii) each class or type of beneficiary: if the trust is a charitable trust, the objects of the trust.
11A Section 24 amended (Enhanced customer due diligence: verification of identity requirements) In section 24(3)(b), replace “and account monitoring” with “and account moni- toring or (if the reporting entity is not a financial institution) through other ap- propriate risk management procedures”.

25 12 (1) Section 27 amended (Wire transfers: identity requirements) In section 27(1), replace “over” with “equal to or above”.
(1A) (2) In section 27(1)(d), replace “regulations” with “section 27A or regulations”.

In section 27(5)(b), replace “suspicious transaction” with “suspicious activity”.
30 12A New section 27A inserted (Other identifying information prescribed in relation to wire transfers) After section 27, insert: 20 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 15 27A Other identifying information prescribed in relation to wire transfers (1) (2) Information that gives the name of the beneficiary of a wire transfer and the account number of that beneficiary or any unique transaction reference that al- lows the transaction to be traced is prescribed for the purposes of section 27(1)(d).
In the case of a domestic wire transfer, any information that enables the trans- action itself to be identified and traced to the originator is prescribed to be other identifying information for the purposes of section 27(2).

12B Section 29 amended (Corresponding banking relationships) In section 29(3), after “Act”, insert “or regulations”.
5 10 13 14 (1) (2) Section 31 amended (Ongoing customer due diligence and account monitoring) In section 31(2)(b), replace “suspicious transaction” with “suspicious activity”.

Section 32 amended (Reliance on member of designated business group) In section 32(1)(a)(ii), replace “, but no later than 5 working days,” with “on request by the reporting entity, but within 5 working days of the request,”.
15 In section 32(1)(d), replace “suspicious transaction” with “suspicious activity or prescribed transaction”.

(3) After section 32(1), insert: (1A) A reporting entity (member A) that is a member of a designated business group may rely on another member of the group (member B) to make pre- scribed transaction reports under this Act or regulations.
15 (1) Sections 33 amended (Reliance on other reporting entities or persons in another country) In section 33(2)(c)(ii), replace “, but no later than 5 working days, after the business relationship is established or the occasional transaction is conducted” with “on request by the reporting entity, but within 5 working days of the re- quest”.
(2) After section 33(3), insert: (3A) However, a reporting entity relying on a third party to conduct the customer due diligence procedure is not responsible for ensuring that customer due dili- gence is carried out in accordance with this Act if the following conditions are met: 20 25 30 (a) (b) the reporting entity is acting in good faith when relying on a third party; and 35 the reporting entity has reasonable cause to believe the reporting entity that is relied on has conducted relevant customer due diligence proced- ures to at least the standard required by this Act and regulations; and 21 Part 1 cl 16 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (c) (d) the reporting entity being relied on is an approved entity or is within an approved class of entities; and any other the conditions (if any) prescribed by regulations are complied with.
16 (1) (2) 17 (1) (2) (3) Section 36 amended (Protection of personal information and designated business groups) 5 In section 36(5)(a), replace “suspicious transactions report” with “suspicious activity report”.

In section 36(5)(b), replace “suspicious transaction” with “suspicious activity”.

Section 37 amended (Prohibitions if customer due diligence not conducted) 10 In section 37(d), replace “suspicious transactions report” with “suspicious ac- tivity report”.
In section 37(e), replace “suspicious transaction” with “suspicious activity”.

In section 37, insert as subsection (2): (2) A reporting entity is not prohibited by subsection (1)(a) or (b) from establish- ing or continuing a business relationship with a customer in respect of an activ- ity that is not specified in section 6(3) in relation to that reporting entity.
15 18 Subpart 2 of Part 2 replaced Replace subpart 2 of Part 2 with: Subpart 2—Suspicious activity reports 20 39A Interpretation For the purposes of this subpart,— service— (a) means an activity that is carried out by a reporting entity; but (b) does not include an activity unless section 6(3) applies this Act to the reporting entity in relation to the activity 25 suspicious activity means an activity undertaken in circumstances specified in section 6(3) in relation to a reporting entity, that is undertaken in circumstan- ces— (a) in which— 30 (i) (ii) (iii) a person conducts or seeks to conduct a transaction through a re- porting entity; or a reporting entity provides or proposes to provide a service to a person; or a person requests a reporting entity to provide a service or makes an inquiry to the reporting entity in relation to a service; and 35 22 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 18 (b) where the reporting entity has reasonable grounds to suspect that the transaction or proposed transaction, the service or proposed service, or the inquiry, as the case may be, is or may be relevant to— (i) (ii) (iii) (iv) (v) the investigation or prosecution of any person for a money laun- dering offence; or 5 the enforcement of the Misuse of Drugs Act 1975; or the enforcement of the Terrorism Suppression Act 2002; or the enforcement of the Proceeds of Crime Act 1991 or the Crim- inal Proceeds (Recovery) Act 2009; or the investigation or prosecution of an offence (within the meaning of section 243(1) of the Crimes Act 1961).
10 40 (1) Reporting entities to report suspicious activities Subsections (3) and (4) apply to reporting entities other than high-value dealers.

(3) (2) Subsection (5) applies to high-value dealers.

If this subsection applies, the reporting entity must, as soon as practicable but no later than 3 working days after forming its suspicion, report the activity, or suspicious activity, to the Commissioner in accordance with section 41.
(4) Nothing in subsection (3) requires any lawyer person to disclose any privil- eged communication (as defined in section 42).

any information that the per- son believes on reasonable grounds is a privileged communication.

(5) A high-value dealer may report a suspicious activity, or proposed activity, to 41 (1) the Commissioner.
Nature of suspicious activity report Except as provided in subsection (2), a report under section 40 must— (a) be in the prescribed form (if any); and (b) (c) (d) contain the details prescribed by regulations; and contain a statement of the grounds on which the reporting entity holds the suspicions referred to in paragraph (b) of the definition of suspi- cious activity in section 39A; and be signed by a person authorised by the reporting entity to sign suspi- cious activity reports (unless the report is forwarded by electronic means); and (e) be forwarded, in writing, to the Commissioner— 15 20 25 30 (i) by way of secure electronic transmission by a means specified or provided by the Commissioner for that purpose; or 35 23 Part 1 cl 18 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (2) (3) 42 (1) (ii) by another means (including, without limitation, by way of trans- mission by fax or email) that may be agreed from time to time be- tween the Commissioner and the reporting entity concerned.
If the urgency of the situation requires, a suspicious activity report may be made orally to any Police employee authorised for the purpose by the Commis- sioner, but in any such case the reporting entity must, as soon as practicable but no later than 3 working days after forming its suspicions, forward to the Com- missioner a suspicious activity report that complies with the requirements in subsection (1).
The Commissioner may confer the authority to receive a suspicious activity re- port under subsection (2) on— (a) any specified Police employee; or 5 10 (b) (c) 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.
15 Privileged communication defined For the purposes of sections 40(4) and 48A(2), a A communication is a priv- ileged communication if— (a) it is a confidential communication (oral or written) (including any infor- mation or opinion)— 20 (i) that passes between— (A) (B) (C) a lawyer and another lawyer in their professional capacity; or a lawyer in his or her professional capacity and his or her client; or 25 any person described in subparagraph (i) or (ii) subsub- paragraph (A) or (B) and the agent of the other person described in that subparagraph (or between the agents of both the persons described) either directly or indirectly; and (ii) that is made or brought into existence for the purpose of obtaining or giving legal advice or assistance; or 30 (b) it is a communication (including any information or opinion) that— (i) (ii) is subject to the general law governing legal professional privil- ege; or is specified in section 54(1), 56(1) and (2), or 57 53, 54, 55, 56, or 57 of the Evidence Act 2006.
35 (2) However, a communication is not a privileged communication— (a) if there is a prima facie case that the communication or information is made or received, or compiled or prepared,— 24 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 18 (i) (ii) for a dishonest purpose; or to enable or aid the commission of an offence; or (b) if, where the information wholly or partly consists of, or relates to, the receipts, payments, income, expenditure, or financial transactions of any specified person, it is contained in (or comprises the whole or a 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 mean- ing of section 6 of the Lawyers and Conveyancers Act 2006.
5 (3) For the purposes of this section, references to a lawyer include a firm in which the lawyer is a partner or is held out to be a partner.
10 43 Auditors may report suspicious activities (1) Despite any other enactment or any rule of law, this section applies 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 activity, that the activity is relevant to— 15 (a) (b) (c) (d) (e) the investigation or prosecution of any person for a money laundering offence; or the enforcement of the Misuse of Drugs Act 1975; or the enforcement of the Terrorism Suppression Act 2002; or the enforcement of the Proceeds of Crime Act 1991 or the Criminal Pro- ceeds (Recovery) Act 2009; or 20 the investigation or prosecution of an offence (within the meaning of section 243(1) of the Crimes Act 1961).
(2) A person may report an activity referred to in subsection (1) to the Commis- sioner.

25 44 (1) Protection of persons reporting suspicious activities Subsection (2) applies to a person who— (a) discloses or supplies any information in any suspicious activity report; or (b) supplies any information in connection with any suspicious activity re- port, whether at the time the report is made or afterwards.
30 (2) No civil, criminal, or disciplinary proceedings lie against a person to whom subsection (1) applies— (a) in respect of the disclosure or supply, or the manner of the disclosure or supply, by that person of the information referred to in that subsection; or 35 (b) for any consequences that follow from the disclosure or supply of that information.
25 Part 1 cl 18 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (3) If any information is reported under section 43 to any Police employee by any person, no civil, criminal, or disciplinary proceedings lie against that per- son— (a) (b) in respect of the disclosure or supply, or the manner of the disclosure or supply, of that information by that person; or 5 for any consequences that follow from the disclosure or supply of that information.
(4) However, subsections (2) and (3) do not apply if the information was dis- closed or supplied in bad faith.— (a) (b) if the information was disclosed or supplied in bad faith; or 10 if, in the case of information disclosed or supplied by a lawyer, there were reasonable grounds to believe that the information was a privileged communication but the lawyer disclosed it or supplied it despite the exis- tence of those grounds.
(5) Nothing in this section applies in respect of proceedings for an offence under 15 any of sections 92 to 97.
45 Immunity from liability for disclosure of information relating to money laundering transactions (1) This section applies if— (a) (b) (c) (d) (e) a person does any act that would constitute, or that the person believes would constitute, an offence against section 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 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 information relating to a money laundering transaction (within the meaning of section 243(4) of the Crimes Act 1961), being a money laundering transaction that consti- tutes (in whole or in part), or is connected with or related to, the act re- ferred 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 enact- ment or provision referred to in section 244(a) of the Crimes Act 1961; and 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.
If this section applies, then, without limiting section 44 and despite the fact that the disclosure would otherwise constitute a breach of that obligation of se- crecy or non-disclosure, the disclosure by that person, to that Police employee, 20 25 30 35 40 (2) 26 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 18 of that information is not a breach of that obligation of secrecy or non-disclos- ure or (where applicable) of any enactment by which that obligation is im- posed.
46 (1) Disclosure of information relating to suspicious activity reports This section and section 47 apply in respect of the following information: (a) any suspicious activity report: (b) any information the disclosure of which will identify, or is reasonably likely to identify, any person— (i) (ii) (iii) as a person who, in his or her capacity as an officer or employee of a reporting entity, has handled a transaction in respect of which a suspicious activity report was made; or as a person who has prepared a suspicious activity report; or as a person who has made a suspicious activity report: 5 10 (c) any information that discloses, or is reasonably likely to disclose, the ex- istence of a suspicious activity report.
15 (2) A reporting entity must not disclose information to which this section relates to any person except— (a) (b) (c) (d) (e) (f) a Police employee who is authorised by the Commissioner 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 person’s duties; or a lawyer, for the purpose of obtaining legal advice or representation in relation to the matter; or another member of a designated business group of which the reporting entity is a member, to the extent necessary for the reporting entity to de- cide whether to make a suspicious activity report; or.
another member of a group of reporting entities authorised by regula- tions made under this Act to receive that information for the purpose of detecting and preventing money laundering and terrorism financing.

(3) A Police employee may disclose information to which this section applies only for law enforcement purposes.

(4) An AML/CFT supervisor may disclose information to which this section ap- plies only to the Police for law enforcement purposes.
(5) A person to whom a function or power has been delegated under section 134 may disclose information to which this section applies only to the AML/CFT supervisor that made the delegation.
(6) 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 dis- 20 25 30 35 27 Part 1 cl 18 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill close that information except to another person of the kind referred to in that subsection for the purpose of— (a) (b) the performance of person A’s duties; or obtaining legal advice or representation in relation to the matter.
(7) A person referred to in subsection (2)(d) to whom disclosure of any informa- tion to which that subsection applies has been made must not disclose that in- formation 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.

5 (8) Any other person who has information to which this section applies may dis- close that information only to the Police for law enforcement purposes.
10 47 Disclosure of information in proceedings (1) No person may disclose, in any judicial proceeding (within the meaning of sec- tion 108(4) of the Crimes Act 1961), any information contained in a suspicious activity report unless the Judge or, as the case requires, the person presiding at the proceeding is satisfied that the disclosure of the information is necessary in the interests of justice.
(2) Nothing in this section prohibits the disclosure of any information for the pur- poses of the prosecution of any offence against section 93 or 94.
48 Disclosure of personal information relating to employees or senior managers An AML/CFT supervisor that has, in the performance and exercise of its func- tions and powers under this Act, obtained personal information about employees or senior managers may disclose that information to another gov- ernment agency for the following purposes if the AML/CFT supervisor is satis- fied that the agency has a proper interest in receiving the information: (a) (b) law enforcement purposes: the detection, investigation, and prosecution of any offence under the following Acts: (i) (ii) (iii) (iv) (v) (vi) the Companies Act 1993: the Financial Advisers Act 2008: the Financial Service Providers (Registration and Dispute Reso- lution) Act 2008: the Gambling Act 2003: the Reserve Bank of New Zealand Act 1989: the Financial Markets Conduct Act 2013.
15 20 25 30 35 28 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 22 19 New section 49A inserted (Obligation to keep reports of suspicious activities) After section 49, insert: 49A Obligation to keep reports of suspicious activities (1) If a reporting entity reports a suspicious activity to the Commissioner, the re- porting entity must keep a copy of that report.
5 (2) The reporting entity must keep a copy of the report for— (a) (b) a period of at least 5 years after the report is made; or any longer period that the AML/CFT supervisor for the reporting entity, or the Commissioner, specifies.

10 20 (1) Section 51 amended (Obligation to keep other records) In section 51(1)(c), after “the business relationship”, insert “; and”.

(2) After section 51(1)(c), insert: (d) any other records prescribed by regulations made under section 153.
(3) (2) 21 (1) (2) (3) (2) 22 Replace section 51(2) with: The records relating to risk assessment, AML/CFT programmes, and audits must be kept for a period of at least 5 years after the date on which they ceased to be used on a regular basis.

Section 57 amended (Minimum requirements for AML/CFT programmes) In section 57, after “programme must”, insert “be in writing and”.

In section 57(d), replace “suspicious transactions” with “suspicious activities”.
In section 57, insert as subsection (2): In developing an AML/CFT programme, a reporting entity must have regard to any applicable guidance material produced by AML/CFT supervisors or the Commissioner relating to AML/CFT programmes.
Section 59 replaced (Review and audit of risk assessment and AML/CFT programme) 15 20 25 Replace section 59 with: 59 Review and audit of risk assessment and AML/CFT programmes (1) A reporting entity (other than a high-value dealer) must review its risk assess- 30 ment and AML/CFT programme to— (a) (b) ensure that the risk assessment and AML/CFT programme are up to date; and identify any deficiencies in the effectiveness of the risk assessment and the AML/CFT programme; and 35 29 Part 1 cl 23 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (c) make any changes to the risk assessment or AML/CFT programme iden- tified as being necessary under paragraph (b).
(2) A reporting entity (other than a high-value dealer) must ensure that its risk as- sessment and AML/CFT programme are audited every 2 years or during a dif- ferent time period prescribed by regulations, or at any other time at the request of the relevant AML/CFT supervisor.
59A Audit of compliance with AML/CFT obligations A high-value dealer must ensure that its compliance with its AML/CFT obliga- tions under section 6(3)(d)(ii), and any regulations, is audited when the rele- vant AML/CFT supervisor requests.

59B Who carries out audit (1) An audit under section 59 or 59A must be carried out by an independent per- son, appointed by the reporting entity, who is appropriately qualified to conduct the audit.
(2) A person appointed to conduct an audit is not required to be— (a) a chartered accountant within the meaning of section 19 of the New Zea- land Institute of Chartered Accountants Act 1996; or (b) qualified to undertake financial audits.

5 10 15 (3) A person appointed to conduct an audit must not have been involved in— (a) the establishment, implementation, or maintenance of the reporting enti- ty’s AML/CFT programme (if any); or 20 (b) the undertaking of the reporting entity’s risk assessment (if any).
(4) The audit of a risk assessment under section 59 is limited to an audit of whether the reporting entity’s risk assessment fulfils the requirements in sec- tion 58(3).

25 (5) A reporting entity must provide a copy of any audit to its AML/CFT supervisor on request.

23 24 25 (1) Section 68 amended (Reports about movement of cash into or out of New Zealand) In section 68(1)(a), replace “more than” with “equal to or above”.
30 Section 69 amended (Reports about receipt of cash from outside New Zealand) In section 69(a), replace “more than” with “equal to or above”.
Section 70 amended (Reporting requirements) In section 70(a), replace “the prescribed form” with “the appropriate prescribed form”: 35 (2) Replace section 70(d) with: 30 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 29 (d) be provided to a Customs officer or any other prescribed person,— (i) (ii) in the case of accompanied cash, at the time prescribed for the purposes of this subparagraph; and in the case of unaccompanied cash, at the time prescribed for the purposes of this subparagraph.
5 25A Section 76 amended (Protection for AML/CFT supervisors) In section 76, after “Act”, insert “or regulations”.

26 Cross-heading above section 92 amended In the cross-heading above section 92, replace “transaction” with “activity”.

27 (1) (2) (3) (4) (5) (2) 28 (1) (2) 29 (1) (2) Section 92 amended (Failing to report suspicious transaction) 10 In the heading to section 92, replace “transaction” with “activity”.

In section 92(a), replace “a transaction” with “an activity”.
In section 92(b), replace “the transaction or the proposed transaction” with “the activity or the proposed activity”.

In section 92(c), replace “the transaction or the proposed transaction” with “the activity or the proposed activity”.

15 In section 92, insert as subsection (2): It is a defence to a prosecution under this section if a reporting entity believes on reasonable grounds that the documents or information relating to the activi- ty were privileged communications.
20 Section 93 amended (Providing false or misleading information in connection with suspicious transaction reports or prescribed transaction reports) In the heading to section 93, replace “suspicious transaction” with “suspi- cious activity”.

25 In section 93, replace “suspicious transaction” with “suspicious activity”.
Section 94 amended (Unlawful disclosure of suspicious transaction reports or prescribed transaction reports) In the heading to section 94, replace “suspicious transaction” with “suspi- cious activity”.

30 In section 94(2)(b), replace “any transaction or proposed transaction that is the subject of a suspicious transaction report” with “any activity or proposed activ- ity that is the subject of a suspicious activity report”.
31 Part 1 cl 30 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 30 (1) (2) 31 (1) (2) (3) (2) 32 Section 95 amended (Failure to keep or retain adequate records relating to suspicious transactions or prescribed transactions) In the heading to section 95, replace “suspicious transactions” with “activi- tysuspicious activities”.

In section 95, replace “suspicious transaction” with “suspicious activity”.
5 Section 96 amended (Obstruction of investigation relating to suspicious transaction reports or prescribed transaction reports) In the heading to section 96, replace “suspicious transaction” with “suspi- cious activity”.

In section 96, replace “suspicious transaction” with “suspicious activity”.
10 In section 96, insert as subsection (2): It is a defence to a prosecution under this section if the reporting entity believes on reasonable grounds that the documents or information were privileged com- munications.

Section 99 amended (Time limit for prosecution of offences relating to civil liability act and suspicious transaction reports or prescribed transaction reports) 15 In the heading to section 99, replace “suspicious transaction” with “suspi- cious activity”.
32A Section 102 amended (Offence to obstruct AML/CFT supervisor) 20 In section 102, after “Act”, insert “or regulations”.

33 (1) (2) 34 (1) (2) Section 106 amended (Failure to report cash over applicable threshold values moved into or out of New Zealand) In the heading to section 106, replace “over” with “equal to or above”.

In section 106, replace “over” with “equal to or above”.
25 Section 107 amended (Failure to report cash over applicable threshold value received by person in New Zealand from overseas) In the heading to section 107, replace “over” with “equal to or above”.

In section 107, replace “over” with “equal to or above”.

34A Section 111 amended (Offence to obstruct or not to answer questions from 30 Customs officer) In section 111(1), after “Act”, insert “or regulations”.

35 Section 117 amended (Search warrant) In section 117(4), after “3,”, insert “4,”.
32 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 38 36 Section 130 amended (AML/CFT supervisors) Replace section 130(1)(c) with: (c) (d) for designated non-financial businesses or professions and high-value dealers, the Department of Internal Affairs, or another AML/CFT super- visor prescribed for the purpose, is the relevant AML/CFT supervisor: 5 for the New Zealand Racing Board, casinos, non-deposit-taking lenders, money changers, and other reporting entities that are not covered by paragraphs (a) and (c), the Department of Internal Affairs is the relevant AML/CFT supervisor.
36A Section 132 amended (Powers) 10 (1) In section 132(1), after “Act”, insert “or regulations”.

(2) After section 132(3), insert: (4) Nothing in this section requires any person to disclose any privileged commu- nication.

36B Section 133 amended (Matters relating to conduct of on-site inspections) 15 In section 133(5), replace “lawyer” with “person”.
37 (1) (2) (3) (4) 38 Section 137 amended (Power to use information obtained as AML/CFT supervisor in other capacity and vice versa) In section 137(2), after “Reserve Bank of New Zealand Act 1989”, insert “, the Insurance (Prudential Supervision) Act 2010, and the Non-bank Deposit Takers Act 2013”.

20 In section 137(3), after “Reserve Bank of New Zealand Act 1989”, insert “, the Insurance (Prudential Supervision) Act 2010, and the Non-bank Deposit Takers Act 2013”.
In section 137(6), after “the Gambling Act 2003”, insert “, the Racing Act 2003, and the Charities Act 2005”.

25 In section 137(7), after “the Gambling Act 2003”, insert “, the Racing Act 2003, and the Charities Act 2005”.
Section 139 replacedamended (Power to disclose information supplied or obtained as AML/CFT supervisor) 30 () Replace section 139 with: 139 Power to disclose information (1) The Commissioner, the New Zealand Customs Service, or an AML/CFT super- visor may disclose any information supplied or obtained by it in the exercise of its powers or the performance of its functions and duties under this Act to any other government agency or to any regulator.
35 (2) However, a disclosure may be made only if— 33 Part 1 cl 38 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (a) (b) the disclosure of the information is for law enforcement purposes or regulatory purposes; and the disclosing entity is satisfied that the recipient of the information has a proper interest in receiving the information.
(3) If not authorised under subsections (1) and (2) or any other enactment, dis- closure of any information between a government agency, a regulator, the Commissioner, the New Zealand Customs Service, an AML/CFT Supervisor, or reporting entities, or to or from any of those parties, may be made for law enforcement purposes or regulatory purposes— (a) (b) in accordance with regulations made under section 139A or 153; or in the absence of regulations, in accordance with a written agreement (that contains the matters specified in section 140A(3)) between the relevant parties.
5 10 (4) The parties to a written agreement that involves the disclosure of personal in- formation must,— 15 (a) before entering into or amending such an agreement, consult the Privacy Commissioner; and (b) review the agreement if there is a material change in circumstances.

(5) Subsection (4)(a) does not apply if an agreement is being amended and the proposed amendments are minor or technical in nature.
20 (6) An agreement under subsection (3)(b) must be published on, or linked to by, at least one Internet site maintained by a party to whom the agreement applies.

(7) This section does not apply to any information that may be disclosed or shared under an agreement specified in section 140A.
139A Regulations relating to information sharing (1) The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for the purpose of section 139— (a) specifying the type of information that may or may not be disclosed: (b) prescribing the conditions under which the information may be disclosed and the conditions applying to the use of that information (for example, conditions relating to storage, copying, access, and the return of infor- mation).
(2) Before recommending the making of regulations under this section, the Minis- ter must consult— 25 30 the agencies and regulators that may be affected by the proposed regula- tions; and 35 the Privacy Commissioner; and any other person or body that the Minister considers may be affected by the proposed regulations.

(a) (b) (c) 34 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 39 (1) In the heading to section 139, delete “supplied or obtained as AML/CFT supervisor”.
(2) In section 139,— (3) (2) (a) (b) after “government agency”, insert “or any regulator”: after “the agency”, insert “or regulator”.
In section 139, insert as subsections (2) and (3): If not authorised under any other provision of this Act, disclosure of any infor- mation between a government agency, a regulator, the Commissioner, the New Zealand Customs Service, an AML/CFT supervisor, or reporting entities, or to or from any of those parties, may be made for law enforcement purposes in ac- cordance with regulations made under section 139A.
(3) Nothing in this section limits the Privacy Act 1993 (which permits certain dis- closures in addition to those authorised under this section).
38A New section 139A inserted (Regulations relating to information sharing) After section 139, insert: 139A Regulations relating to information sharing (1) The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for the purpose of section 139(2)— (a) specifying the type of information that may or may not be disclosed: (b) prescribing the conditions under which the information may be disclosed and the conditions applying to the use of that information (for example, conditions relating to storage, copying, access, and the return of infor- mation).
5 10 15 20 (2) Before recommending the making of regulations under this section, the Minis- ter must consult— 25 (a) (b) (c) the agencies and regulators that may be affected by the proposed regula- tions; and the Privacy Commissioner; and any other person or body that the Minister considers may be affected by the proposed regulations.
30 Section 140 amended (Power to use and disclose information supplied or obtained under other enactments for law enforcement or regulatory purposesAML/CFT purposes) In section 140(1), after “subsection (2) if”, insert “the disclosing entity has reasonable grounds to believe that”.
35 Replace section 140(2) with: The enactments referred to in subsection (1) are— 39 (1) (2) (2) 35 Part 1 cl 40 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) the Charities Act 2005: the Companies Act 1993: the Criminal Proceeds (Recovery) Act 2009: the Customs and Excise Act 1996: the Financial Advisers Act 2008: the Financial Markets Authority Act 2011: the Financial Markets Conduct Act 2013: the Financial Service Providers (Registration and Dispute Resolution) Act 2008: the Financial Transactions Reporting Act 1996: the Gambling Act 2003: the Goods and Services Tax Act 1985: the Income Tax Act 2007: (m) the Insurance (Prudential Supervision) Act 2010: (n) (o) (p) (q) (r) (s) (t) the Lawyers and Conveyancers Act 2006: the New Zealand Institute of Chartered Accountants Act 1996: the Non-bank Deposit Takers Act 2013: the Proceeds of Crime Act 1991: the Racing Act 2003: the Real Estate Agents Act 2008: the Reserve Bank of New Zealand Act 1989: (ta) the Secondhand Dealers and Pawnbrokers Act 2004: (u) (v) the Tax Administration Act 1994: the Terrorism Suppression Act 2002: (w) any other Act prescribed by regulations.
40 New section 140A inserted (Data access for law enforcement purposes) After section 140, insert: 140A Data access for law enforcement purposes The purpose of this section is to facilitate access to data holdings between gov- ernment agencies for law enforcement purposes.
30 For the purposes of this section, the chief executive of a government agency may, in accordance with a written agreement,— (a) disclose any relevant information to the chief executive of another gov- ernment agency; or (1) (2) 36 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 41 (b) (c) allow the chief executive of another government agency access to 1 or more databases; or disclose any relevant information to an agency in another country that is authorised to receive the information in accordance with regulations.
(3) The agreement must specify— 5 (a) (b) (c) (d) (e) (f) (g) (h) the information that may be disclosed: the databases and type of information that may be accessed: how the information may be used to facilitate law enforcement and regu- latory purposes: the positions or designations of the persons who may handle the infor- mation or access the databases: 10 the records to be kept in relation to each occasion on which the informa- tion is handled or the databases accessed: the safeguards that are to apply for protecting personal information or commercially sensitive information that is disclosed: 15 the requirements relating to storage and disposal of information that may be disclosed: the circumstances (if any) and manner in which the information may be disclosed to another government agency: (i) the requirements for reviewing the agreement.
20 (4) (5) Before entering into or amending the agreement, the chief executive must con- sult the Privacy Commissioner.

Subsection (4) does not apply if the chief executive considers that the pro- posed amendments to the agreement are minor.

(6) An agreement under this section must be published on an Internet site main- 25 tained by or on behalf of the relevant government agencies.
41 (1) Section 142 amended (Financial intelligence functions of Commissioner) ReplaceIn section 142(a), replace “suspicious transaction” with: “suspicious activity”.
(a) (ab) receive suspicious activity reports: carry out, to the extent permitted under section 139 or any other enact- ment, the following tasks: (iaa) receive financial intelligence from government agencies and regu- lators: (iab) analyse that financial intelligence: (iac) refer that financial intelligence to other government agencies and regulators: 30 35 37 Part 1 cl 42 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (i) (ii) (iii) refer financial intelligence to AML/CFT supervisors to assist those supervisors in the supervisory functions: receive, analyse, and refer financial intelligence to and from gov- ernment agencies and regulators: co-operate and share information and advice related to money laundering and terrorism financing with AML/CFT supervisors, government agencies, and regulators: 5 (iv) share information and advice related to money laundering, terror- ism financing, and predicate offending with reporting entities: (1A) Replace section 142(b)(ii) with: 10 (ii) information for reporting entities on their obligations to report suspicious activities and prescribed transactions, and how to meet those obligations: (2) (3) (4) (5) (6) ReplaceIn section 142(d), replace “suspicious transaction” with: “suspicious activity”.
15 (d) enforce requirements to provide suspicious activity reports: In section 142(e), replace “suspicious transaction” with “suspicious activity”.

In section 142(f), replace “suspicious transaction” with “suspicious activity”.

In section 142(g), replace “suspicious transaction reports” with “financial intel- ligence reportssuspicious activity”.

20 In section 142(h), replace “suspicious transaction” with “suspicious activity” in each place.
(7) After section 142(k), insert: (ka) receive and analyse financial intelligence relating to law enforcement purposes from international authorities authorised to perform functions broadly equivalent to the Commissioner’s financial intelligence func- tions: In section 142(l), after “New Zealand Customs Service,”, insert “regulators,”.
Section 143 replaced amended (Powers relating to financial intelligence functions of Commissioner) (8) 42 () Replace section 143 with: 143 Powers relating to financial intelligence functions of Commissioner The Commissioner may order production of or access to all records, docu- ments, and information from any reporting entity that are relevant to analysing the financial information and intelligence information received by the Commis- sioner, with or without a court order.
The Commissioner may, to the extent permitted under section 139 or any other enactment,— (1) (2) 38 25 30 35 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 45 (a) share suspicious activity reports, cash reports, suspicious property re- ports, and other financial information and intelligence information re- ceived by the Commissioner under this Act with government agencies for law enforcement or regulatory purposes: (b) co-operate and share financial intelligence with reporting entities, in ac- cordance with the functions of the Commissioner in section 142.
5 In section 143(a), replace “a suspicious transaction report received by the Com- missioner” with “information received by the Commissioner under this Act”.

In section 143(b), replace “suspicious transaction reports” with “suspicious ac- tivity reports”.

10 In section 143(b), after “with”, insert “regulators and”.

Insert as subsection (2): (1) (2) (3) (4) (2) Nothing in this section requires any person to disclose any privileged commu- nication.
43 Section 144 amended (Delegation of powers of Commissioner) 15 In section 144(1), after “inspector”, insert “or an equally senior or more senior Police employee”.

44 (1) (2) (3) (4) (5) (6) 45 (1) (2) (3) Section 145 amended (Guidelines relating to reporting of suspicious transactions) In the heading to section 145, replace “transactions” with “activities”.
20 In section 145(1)(a),— (a) (b) replace after “a transaction” with, insert “an or other activity”: replace after “the transaction” with, insert “the or other activity”.

In section 145(1)(b), replace “suspicious transaction report relating to such a transaction” with “suspicious activity report relating to such an activity”.

25 In section 145(2), replace after “transaction” with, insert “or other activity”.

In section 145(3), replace after “transaction” with, insert “or other activity”.
In section 145(4),— (a) (b) replace after “transaction” with, insert “or other activity”: replace after “transactions” with, insert “or other activities”.

30 Section 146 amended (Consultation on proposed guidelines) In section 146(1), replace after “transaction” with, insert “or other activity”.

In section 146(2), replace after “transaction” with, insert “or other activity”.

In section 146(3), replace after “transaction” with, insert “or other activity”.
39 Part 1 cl 46 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 46 Section 147 amended (Availability of guidelines) In section 147, replace after “transaction” with, insert “or other activity”.

47 (1) (2) 48 (1) Section 148 amended (Review of guidelines) In section 148(1), replace after “transaction” with, insert “or other activity”.

In section 148(2), replace after “transaction” with, insert “or other activity”.
5 Section 153 amended (Regulations) Replace section 153(d) with: (d) prescribing amounts or thresholds that are required to be prescribed for the purposes of this Act or regulations (and 1 or more amounts or thresh- olds may be prescribed for the purposes of different provisions of this Act or regulations): (2) After section 153(i), insert: (ia) (ib) authorising and regulating the sharing of information between reporting entities in different groups: authorising and regulating the sharing of information between the Com- missioner, the New Zealand Customs Service, AML/CFT supervisors, and international authorities: 49 Section 154 amended (Regulations relating to application of Act) (1) After section 154(1)(a), insert: (ab) exempting or providing for the exemption of any financial activity or class of financial activities described in the definition of financial institu- tion in section 5 from all or any of the provisions of this Act: (ac) declaring an entity or a class of entities to be an approved entity or ap- proved class of entities for the purposes of section 33(3A): (1A) After section 154(1)(h), insert: 10 15 20 25 (ha) declaring an activity or a class of activities to be, or not to be, an occa- sional activity for the purposes of this Act: (hb) prescribing an entity or a class of entities as an approved entity or an ap- proved class of entities: In section 154(2)(a), delete “and the Financial Transactions Reporting Act 1996”.
30 Repeal section 154(3)(c) and (5).
New section 156A and cross-heading inserted After section 156, insert: (2) (3) 50 40 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 51 Review provision 156A Review of operation of Act (1) The Minister of Justice must, not later than 1 July 2021, refer to the Ministry of Justice for consideration the following matters: (a) the operation of the provisions of this Act since the commencement of this section; and 5 (b) whether any amendments to this Act are necessary or desirable.
The Ministry must report on those matters to the Minister of Justice within 1 year of the date on which the reference occurs.

The Minister of Justice must present a copy of the report provided under this section to the House of Representatives as soon as practicable after receiving it.
10 (2) (3) 51 Sections 157 to 159 and cross-heading above section 157 replaced Replace sections 157 to 159 and the cross-heading above section 157 with: Exemptions 157 Chief executive may grant exemptions (1) The chief executive may, in the prescribed form, exempt either of the following from the requirements of all or any of the provisions of this Act: (a) (b) a reporting entity or class of reporting entities: a transaction or class of transactions.
(2) The chief executive may grant the exemption— (a) (b) unconditionally; or subject to any conditions that the chief executive thinks fit.
(3) Before deciding to grant an exemption and whether to attach any conditions to the exemption, the chief executive must have regard to the following: 15 20 25 (a) (b) (c) (d) (e) the intent and purpose of this Act and any regulations: the risk of money laundering and the financing of terrorism 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 effects on prevention, detection, investigation, and prosecution of offences: 30 the level of regulatory burden to which the reporting entity would be subjected in the absence of an exemption: whether the exemption would create an unfair advantage for the report- ing entity or disadvantage third party reporting entities: 35 41 Part 1 cl 51 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (f) the overall effect that the exemption would have on the integrity of, and compliance with, the AML/CFT regulatory regime.
(4) An exemption under this section is a disallowable instrument for the purposes of the Legislation Act 2012 and must be presented to the House of Representa- tives under section 41 of that Act.
5 (5) A class exemption under this section must be published under section 6 of the Legislation Act 2012 and, for that purpose, class exemption— (a) means an exemption of general application that applies to a class of re- porting entities or transactions; but (b) does not include an exemption granted in relation to a particular report- ing entity or transaction.
10 (6) An exemption under this section that is not a class exemption under subsec- tion (5) must, as soon as practicable after it is granted, be— (a) published on an Internet site maintained by or on behalf of the chief executive; and (b) notified in the Gazette; and (c) made available in printed form for purchase on request by members of the public.

(7) A notification in the Gazette for the purpose of subsection (6)(b) does not have to incorporate the exemption.
158 Chief executive must consult before granting exemption Before granting an exemption under section 157, the chief executive must consult— 15 20 (a) (b) the AML/CFT supervisors; and any other persons that the chief executive considers appropriate having regard to the matters listed in section 157(3).

25 159 Requirements relating to exemptions (1) The exemption must include an explanation of the reason for granting the ex- emption.
(2) The exemption— 30 (a) must be granted for a period specified by the chief executive, but that period must not be more than 5 years; and (b) may, at any time, be varied or revoked by the chief executive.

51 (1) Section 157 amended (Minister may grant exemptions) In section 157(1), replace “, in the prescribed form, exempt any” with “exempt either or both”.

35 (2) In section 157(1)(a), replace “entities; or” with “entities:”.
42 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 1 cl 52A (3) After section 157(1), insert: (1A) The Minister may grant an exemption— (a) (b) to an individual reporting entity on application by that entity in a manner and form approved by the chief executive (if any): to a class of reporting entities on the Minister’s own motion or on appli- cation by 1 or more reporting entities made in a manner or form ap- proved by the chief executive (if any).
5 Repeal section 157(3)(a).

In section 157(4), after “disallowable instrument”, insert “but not a legislative instrument”.

10 (4) (5) (6) In section 157(5), after “this section”, insert “is a legislative instrument and”.
51A New section 159A and cross-heading inserted After section 159, insert: Resolution of disputes about privilege 159A Procedure for testing assertions that document privileged (1) If any person refuses to disclose any information or document on the grounds that it is a privileged communication and that section 132(4), 133(5), or 143(3) applies, the Commissioner, an AML/CFT supervisor, or that person may apply to a District Court Judge for an order determining whether or not the claim of privilege is valid.
(2) For the purposes of determining that application, the District Court Judge may require the information or document to be produced to the District Court Judge.

51B Section 160 and cross-heading repealed Repeal section 160 and the cross-heading above section 160.

52 Sections 162 and 163 repealed Repeal sections 162 and 163.

52A Schedule 1 amended 15 20 25 (1) (2) In the Schedule 1 heading, replace “s 160” with “s 7A”.
In the Schedule heading, replace “and savings provisions” with “savings, and related provisions”.

30 (3) After Schedule 2, insert: Part 1 Transitional, savings, and related provisions relating to the Financial Reporting Act 1996 43 Part 1 cl 52B Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (4) In Schedule 1, after clause 3, insert the Part 2 set out in Schedule 1 of this Act.
52B Consequential amendments to principal Act The principal Act is amended in the manner set out in Schedule 2.

Part 2 Amendments to other enactments and repeal 5 Amendments to Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011 This section amends the Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011.

10 Revoke regulations 8 and 9.


Replace regulation 20(1) with: 53 (1) (2) (3) (1) A person is not a reporting entity, for the purposes of the Act, by reason only that the person carries out a relevant service in the ordinary course of the per- son’s business as an executor, an administrator, or a trustee in respect of ser- vices provided in the administration of an estate or, in the case of a trustee, in respect of services provided to beneficiaries of a family trust.
15 53A Amendment to Anti-Money Laundering and Countering Financing of Terrorism (Prescribed Transactions Reporting) Regulations 2016 This section amends the Anti-Money Laundering and Countering Financing of Terrorism (Prescribed Transactions Reporting) Regulations 2016.

20 Replace Schedule 2 with the Schedule 2 set out in Schedule 3 of this Act.
Amendments to Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Regulations 2011 This section amends the Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Regulations 2011.

25 Revoke regulations 4 to 7 and the cross-headings above regulations 4, 5, and 5A.

Amendments to Financial Transactions Reporting Act 1996 This section amends the Financial Transactions Reporting Act 1996.

30 Repeal section 3(1)(g).


Repeal section 3(1)(j).

Repeal section 3(1)(l) and (la).

Repeal section 3(1)(m).

(1) (2) 54 (1) (2) 55 (1) (2) (3) (4) (5) 44 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Part 2 cl 56 56 Financial Transactions Reporting Act 1996 repealed The Financial Transactions Reporting Act 1996 (1996 No 9) is repealed.
45 Schedule 1 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Schedule 1 Amendments to Schedule 1 of principal Act s 52A Part 2 Transitional provisions relating to the Anti-Money Laundering and Countering Financing of Terrorism Amendment Act 2017 4 Exemptions An exemption granted by the Minister under section 157 of the principal Act that is in force immediately before the commencement of this clause, continues in force for the unexpired portion of the term for which it was granted, as if it had been granted under section 157 of the principal Act (as substituted by section 51 of the Anti-Money Laundering and Countering Financing of Ter- rorism Amendment Act 2017 (the 2017 Act)).
4 Application for exemption Any application for an exemption under section 157 that has been lodged but not determined by the Minister, immediately before the commencement of this clause, must be determined by the Minister under section 157 (as amended by section 51 of the Anti-Money Laundering and Countering Financing of Ter- rorism Act 2017 (the 2017 Act)).
Suspicious transaction reports continue until 1 July 2018 or earlier date appointed by Order in Council 5 Reporting entity must continue to report suspicious transactions Despite section 18 of the 2017 Act, in the period between the commence- ment of this clause and 1 July 2018 or an earlier date appointed by the Governor-General by Order in Council,— (a) (b) (c) (d) a reporting entity must comply with sections 40, 41, and 43 to 48 (as they read before the commencement of section 18 of the 2017 Act) (which relate to suspicious transaction reports); and a reporting entity and any other person may rely on section 42 of the principal Act (as inserted by section 18 of the 2017 Act); and a reporting entity must not comply with sections 39A, 41, and 43 to 48 (as inserted by section 18 of the 2017 Act); and for the purposes of giving effect to paragraphs (a) and (c), section 42 (as inserted by section 18 of the 2017 Act) and sections 139, 140, 140A, 142, 143, 144, 145, 146, 147, 148, 153, 154, and 154A (as amended or inserted by sections 38 to 49A of the 2017 Act) apply with any necessary modifications; and 46 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Schedule 1 (e) subject to paragraph (b), for the purposes of, and to the extent neces- sary for, giving effect to paragraphs (a) and (c), this Act (as it read before the enactment of the 2017 Act) continues in force.
6 Treatment of existing suspicious transaction reports If, on the commencement of section 18, the Commissioner of Police holds 1 or more suspicious transaction reports given to the Commissioner before the commencement of section 38, the provisions of this Act (as amended by the 2017 Act) apply to those reports as if they were suspicious activity reports.
5 47 Schedule 2 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Schedule 2 Consequential amendments to principal Act s 52B In section 5, definition of customer, paragraph (b)(ii), replace “occasional transac- tion” with “occasional transaction or activity”.

5 In section 14(b), replace “occasional transaction” with “occasional transaction or ac- tivity”.

In section 16(2), replace “occasional transaction” with “occasional transaction or ac- tivity”.
In section 18(1)(b), replace “occasional transaction” with “occasional transaction or activity”.

10 In section 20(2), replace “occasional transaction” with “occasional transaction or ac- tivity”.

In section 22(1)(b), replace “occasional transaction” with “occasional transaction or activity”.

15 In section 22(2)(b), replace “occasional transaction” with “occasional transaction or activity”.

In section 22(5)(b), replace “occasional transaction” with “occasional transaction or activity”.
In section 24(2), replace “occasional transaction” with “occasional transaction or ac- tivity”.

20 In section 26(1), replace “occasional transaction” with “occasional transaction or ac- tivity”.

In section 26(3), replace “occasional transaction” with “occasional transaction or ac- tivity”.

25 In section 26(3), after “that transaction”, insert “or other activity”.

In section 30, replace “occasional transaction” with “occasional transaction or activi- ty”.
In section 32(1)(a)(i) and (ii), replace “occasional transaction” with “occasional trans- action or activity”.

30 In section 33(2)(c)(i) and (ii), replace “occasional transaction” with “occasional trans- action or activity”.

In section 37(c), replace “occasional transaction” with “occasional transaction or ac- tivity”.

In section 39(1), replace “occasional transaction” with “occasional transaction or ac- tivity”.
35 In section 50(3)(b), replace “occasional transaction” with “occasional transaction or activity” in each place.

48 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Schedule 2 In section 50(3)(c)(ii), replace “occasional transaction” with “occasional transaction or activity”.
In section 154(1)(g), insert: (ga) declaring an activity or a class of activities to be, or not to be, an occa- sional activity and the circumstances and conditions in which an activity or a class of activities is to be, or not to be, an occasional activity for the purposes of the Act.
5 49 Schedule 3 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Schedule 3 New Schedule 2 inserted Schedule 2 Information to be included in section 48A(1) report s 53A 5 s 48A Part 1 Details to be contained in international wire transfer report 1 General For the reporting entity,— (a) (b) (c) the name of the reporting entity: the business address of the reporting entity: the name of the reporting entity’s AML/CFT supervisor.
2 Transaction details For each transaction,— (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) the branch or location where the transaction took place in New Zealand (if relevant): the country where the transaction took place (if not New Zealand): the date and time of transaction: the mode of the transaction (ie, wire transfer): the type of funds (eg, cash deposit, deposit from electronic funds): the amount in New Zealand dollars: the amount in foreign currency (if applicable): the exchange rate (if applicable): the unique transaction reference number: As available the branch or city or region where the transaction took place if not in New Zealand: (k) the Internet Protocol address of the originator.
3 Transaction details in relation to originator or beneficiary For each transaction by international wire transfer,— 10 15 20 25 30 50 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Schedule 3 (a) the information to be provided where the reporting entity’s customer is the originator of the transaction (and not the information in paragraph (b)) is as follows: (i) (ii) (iii) (iv) (v) the name of the beneficiary of the international wire transfer: the account number for the beneficiary of the international wire transfer: 5 the country where the beneficiary account is held or the location of the beneficiary (city or region, if available): any other details of the location of the beneficiary account or beneficiary, as available: 10 any other identifying information regarding the beneficiary of the international wire transfer, as available: (b) the information to be provided where the reporting entity’s customer is the beneficiary of the international wire transfer (and not the information in paragraph (a)) is as follows: 15 (i) (ii) (iii) (iv) the name of the originator of the international wire transfer: the account number for the originator of the international wire transfer: the country where the originator account is held or the originator is: 20 any other details of the location of the originator account or the originator, as available: As available (v) any other identifying information regarding the originator of the international wire transfer.
25 4 (1) Customer details For each customer party to the transaction,— (a) (b) (c) (d) (e) (f) their name: either their account number or unique customer identifier or both (if ap- plicable): 30 their date of birth (if applicable): their identity document number: As available the type of account or facility: the physical address of each customer party to the transaction or (if the customer party is a company) the address of its registered office: 35 (g) the phone number of each customer party to the transaction: 51 Schedule 3 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill (h) any other identifying information regarding each customer party to the transaction.
(2) For each person acting on behalf of a customer,— (a) (b) (c) (d) (e) As available the name of the person: their account number or unique customer identifier: their date of birth (if applicable): their identity document number: 5 if the customer is not a natural person, identifying information that al- lows the transaction to be traced back to the person originating the trans- action on behalf of the customer.
10 Part 2 Details to be contained in domestic physical cash transaction report 5 General For the reporting entity,— (a) (b) (c) the name of the reporting entity: the business address of the reporting entity: the name of the reporting entity’s AML/CFT supervisor.
6 Transaction details For each transaction,— (a) (b) (c) (d) (e) (f) (g) (h) the branch or location and where the transaction took place: the date and time of transaction: the mode of transaction (eg, in person, ATM, or other relevant system or channel): the type of funds (eg, cash): the amount in New Zealand dollars: the amount in foreign currency (if applicable): the exchange rate (if applicable): the unique transaction reference number.
Customer details For each customer party to the transaction,— (a) (b) their name: either their account number or unique customer identifier or both (if ap- plicable): 7 (1) 52 15 20 25 30 Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill Schedule 3 (c) (d) (e) (f) (g) (h) their date of birth (if applicable): their identity document number: As available the type of account or facility: the physical address of each customer party to the transaction or (if the customer party is a company) the address of its registered office: 5 the phone number of each customer party to the transaction: any other identifying information regarding each customer party to the transaction.
(2) For each person acting on behalf of a customer,— (a) the name of the person: As available (b) (c) (d) (e) their account number or unique customer identifier: their date of birth (if applicable): their identity document number: if the customer is not a natural person, identifying information that al- lows the transaction to be traced back to the person originating the trans- action on behalf of the customer.
13 March 2017 23 March 2017 Introduction (Bill 248–1) First reading and referral to Law and Order Committee Legislative history 10 15 Wellington, New Zealand: Published under the authority of the House of Representatives—2017 53