Source: http://www.legislation.govt.nz/regulation/public/2018/0101/latest/whole.html
Timestamp: 2020-01-18 01:55:28
Document Index: 648481057

Matched Legal Cases: ['art 1', 'art 2', 'art 3', 'art 4', 'art 5', 'art 6', 'art 7', 'art 8', 'art 9', 'art 10', 'art 11', 'art 12', 'art 13']

Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Notice 2018 (LI 2018/101) – New Zealand Legislation
Pursuant to section 157(1) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, the Associate Minister of Justice gives the following notice,—
4 Class exemptions
This notice is the Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Notice 2018.
A class exemption applies on and from the date specified in the Part of the Schedule setting out the particulars of that class exemption.
A class exemption expires on the date specified in the Part of the Schedule setting out the particulars of that class exemption and that Part is revoked on that date.
The class exemptions granted under section 157(1) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 are set out in the Schedule.
The following legislative instruments are revoked:
Anti-Money Laundering and Countering Financing of Terrorism (Publication of Class Exemption) Notice 2013 (LI 2014/63):
Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Notice 2014 (LI 2014/142):
Anti-Money Laundering and Countering Financing of Terrorism (Designated Issuers of Debt Securities Class Exemption) Notice 2018 (LI 2018/11).
Schedule Class exemptions
Part 1 Bodies corporate and body corporate managers
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt all bodies corporate, created under the Unit Titles Act 2010 (the UT Act) or created under the Unit Titles Act 1972 and continued under the UT Act, from all the provisions of the Act in relation to any relevant services provided in carrying out any management, financial, or administrative functions relating to the body corporate and the unit title development in accordance with the UT Act or the Unit Titles Regulations 2011 (the UT Regulations).
I also exempt any persons contracted or otherwise engaged by a body corporate as a body corporate manager or body corporate secretary (collectively referred to as body corporate managers) from sections 10 to 71 of the Act in relation to any relevant services provided whilst carrying out management, financial, or administrative functions and services on behalf of a body corporate. This includes lawyers and accountants carrying out these services. The scope of this exemption for body corporate managers covers only those functions and services that a body corporate would otherwise provide to its constituent owners in accordance with the UT Act or the UT Regulations.
The exemption provided to bodies corporate in clause 1 is not subject to any conditions.
The exemption provided to body corporate managers in clause 2 is made subject to the following condition: a body corporate manager, in carrying out any functions and services on behalf of a body corporate, must adhere to all duties and other requirements contained in the UT Act, the UT Regulations, and any other relevant legislation as if the body corporate manager were acting as the body corporate itself.
These exemptions have been made for the following reasons:
the risk of money laundering or the financing of terrorism is low:
funds paid to bodies corporate or body corporate managers are only payable by unit owners of bodies corporate:
funds are not accepted from any other parties (unless it is clear that such parties are acting as a unit owner’s agent, such as a lawyer or an accountant paying on instructions from their client):
funds are payable on levies struck during a financial year or (in the case of body corporate managers) on the supply of an invoice showing levies struck by the body corporate for the financial year:
the levies struck are intended to cover the costs of insurance and other outgoings for that year, and, if further funds are required during the year, additional levies are struck by the body corporate:
payments are made by direct credit to either the body corporate or body corporate manager and, on receipt, funds are held in specific accounts as required by the UT Act:
where a body corporate has instructed a lawyer to receive payments from unit owners, or where a unit owner’s mortgagee requires funds advanced to the owner to meet levies to be paid into a lawyer’s trust account under an escrow arrangement, those funds are held in the lawyer’s trust account on receipt:
where the amount levied is in excess of the amount required for the year’s outgoings, the surplus is usually credited to a long-term maintenance fund or offset against the next year’s levies:
individual unit owners have no control or ability to move money once it is received by the body corporate or body corporate manager:
there is no automatic right of withdrawal or ability to use funds once levies are paid. Any surplus at the end of the financial year is usually minimal, and those amounts are not usually returned to unit owners, but retained in the manner set out above.
This exemption comes into force on 30 June 2018.
Part 2 Public Trust, Māori Trustee, and trustee companies
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt Public Trust, the Māori Trustee, and each trustee company within the meaning of the Trustee Companies Act 1967 (collectively referred to as the statutory trustee corporations) in respect of the classes of transactions listed at clause 2 below from the following provisions of the Act:
sections 5 to 38; and
sections 50 to 91; and
sections 106 to 115.
The exemption applies to—
the statutory trustee corporations in respect of the following personal trust services:
acting as an agent to reseal overseas probate or letters of administration in New Zealand:
acting as a property manager under the Protection of Personal and Property Rights Act 1988:
acting as a court-appointed trustee, agent, or receiver:
acting as a guardian for a minor as required by court order:
acting as a trustee of a funeral trust that does not provide for any cooling-off period or for the ability to withdraw funds prior to the settlor’s or testator’s death:
drafting any will, power of attorney, or trust documentation where required to do so by court order or by operation of statute:
acting as a property attorney under an enduring power of attorney where required to do so by court order or by operation of statute:
Public Trust in respect of the personal trust service of being appointed to act as trustee, agent, manager, or receiver by operation of statute (for example, having money paid to Public Trust pursuant to the Local Government (Rating) Act 2002):
the Māori Trustee in respect of the following personal trust services:
acting as statutory trustee in respect of Māori land:
acting as a trustee, agent, or other fiduciary for Māori, or in respect of any Māori land or other interests, in the exercise or performance of its duties, functions, and powers by operation of statute.
In this exemption, personal trust services—
means services provided by the statutory trustee corporations in a fiduciary capacity to individuals or the groups listed in clause 2; but
excludes any services provided by the statutory trustee corporations in their capacities as trustees or supervisors in respect of an issue of securities to the public or activities related to the issue of securities.
there is a low risk of money laundering or terrorism financing through the statutory trustee corporations when they are providing personal trust services, because—
the statutory trustee corporations operate within a heavily regulated environment that includes requirements to provide services by court order or by operation of statute; and
the court, when requiring the statutory trustee corporations to provide services by court order, subjects the engagement of services to a unique supervisory element; and
the continued imposition of suspicious activity reporting obligations will adequately address the risk of money laundering and terrorism financing in the circumstances; and
the obligations imposed on the statutory trustee corporations would be disproportionate given the low risk of money laundering or terrorism financing in the circumstances outlined in this exemption.
Part 3 Services provided in relation to certain retirement schemes
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt the manager of a specified retirement scheme from sections 10 to 71 of the Act in relation to services provided in respect of the specified retirement scheme.
For the purposes of this ministerial exemption,—
regular leave of absence contributions means contributions made other than through payroll by a member to the retirement scheme during a permitted period of unpaid leave of absence
retirement scheme has the same meaning as in section 6(1) of the Financial Markets Conduct Act 2013
specified retirement scheme means—
a retirement scheme in respect of which the provision of relevant services would be exempt from the Act pursuant to regulation 20A of the Anti-Money Laundering and Countering Financing of Terrorism (Exemptions) Regulations 2011 but for the fact that the retirement scheme allows—
transfers from equivalent overseas retirement schemes (as described in regulation 82(3) of the Financial Markets Conduct Regulations 2014) and other retirement schemes that are not superannuation schemes and so does not comply with paragraph (b)﻿(ii) of the definition of limited employer superannuation scheme in regulation 20A(2) of the Anti-Money Laundering and Countering Financing of Terrorism (Exemptions) Regulations 2011:
regular leave of absence contributions and so does not comply with paragraph (d) of the definition of limited employer superannuation scheme in regulation 20A(2) of the Anti-Money Laundering and Countering Financing of Terrorism (Exemptions) Regulations 2011; and
the following retirement schemes on and after 30 June 2018:
AMP (NMLA) New Zealand Superannuation Scheme (SCH11057):
BP New Zealand Retirement Plan (SCH11078):
Dairy Industry Superannuation Scheme (SCH10871):
Defence Force Superannuation Scheme (SCH11069):
Employee Retirement Plan (SCH11190):
MISS Scheme (SCH10889):
Opus Downer Retirement Scheme (SCH11472):
New Zealand Steel Pension Fund (SCH10529):
Ports Retirement Plan (SCH10801):
UniSaver New Zealand (SCH10656); and
the following retirement schemes on and after 1 July 2020:
Fletcher Building Retirement Plan (SCH10825):
Maritime KiwiSaver Scheme (SCH10500):
Maritime Retirement Scheme (SCH10493); and
the following retirement schemes on and after 1 December 2022:
Baptist Union Superannuation Scheme (SCH11086):
The New Zealand Anglican Church Pension Fund (SCH10835):
The Presbyterian Church of Aotearoa New Zealand Beneficiary Fund (SCH11511):
The Supernumerary Fund of the Methodist Church of New Zealand (SCH10904)
specified voluntary contributions means voluntary contributions to the retirement scheme that are either—
regular leave of absence contributions; or
for the purpose of purchasing additional pensionable service or restoring pensionable service
sponsor means, in respect of a retirement scheme that is not an employer superannuation scheme (as defined in regulation 20A(2) of the Anti-Money Laundering and Countering Financing of Terrorism (Exemptions) Regulations 2011), an entity which remits contributions to the scheme through payroll
through payroll means, for the purposes of this exemption, by way of deduction from the salary, wages or other remuneration payable by an employer or a sponsor
voluntary contributions means—
specified voluntary contributions:
voluntary contributions that are not specified voluntary contributions but that are permitted by the trust deed and that are made in accordance with clause 4.
This exemption is made subject to the conditions set out in clauses 4 to 10.
Voluntary contributions that are made other than through payroll to a section of the retirement scheme that is subject to restrictions set out in the complying fund rules (as defined in section YA 1 of the Income Tax Act 2007) must be subject to a cap on the amount of those non-payroll voluntary contributions in a year beginning on 1 July and ending on 30 June. The cap must be set at the amount (after taking into account any other contribution made to that section through payroll) required to enable a member to maximise, in respect of the relevant year, those government contributions set out in section MK 4 of the Income Tax Act 2007.
Specified voluntary contributions other than through payroll for the purpose of purchasing additional pensionable service must be subject to enhanced customer due diligence.
Specified voluntary contributions other than through payroll for the purpose of restoring pensionable service must be subject to standard customer due diligence.
Regular leave of absence contributions must—
be collected by the employer or sponsor, or by a related company (as defined in the Companies Act 1993) on behalf of the employer or sponsor, or by the retirement scheme’s administration manager; and
not exceed (as to either amount or frequency) the contributions that were being paid by the relevant member immediately prior to the member commencing leave of absence.
If any withdrawals are made by a member in addition to that member making regular leave of absence contributions during the permitted period of unpaid leave of absence, the following sections of the Act apply to those withdrawals and contributions:
sections 10 to 17 (and, for the purposes of section 14(1)﻿(d), the first withdrawal is specified as a circumstance in which standard customer due diligence must be conducted); and
sections 39A to 48; and
sections 48A to 48C; and
A retirement scheme covered by paragraph (a)﻿(i) of the definition of specified retirement scheme in clause 2 cannot, in practice, accept any transfers from international sources other than Australian superannuation transfers. If, in the case of a retirement scheme covered by paragraph (a)﻿(ii), (b), (c), or (d) of that definition, any transfers are made from international sources, with the exception of Australian superannuation transfers, the following sections of the Act apply to those transfers:
sections 10 to 36; and
If any regular leave of absence contributions are received from international sources during the permitted period of unpaid leave of absence, the following sections of the Act apply to those contributions:
sections 10 to 17 (and, for the purposes of section 14(1)﻿(d), the receipt of a contribution from an international source is specified as a circumstance in which standard customer due diligence must be conducted); and
the specified retirement schemes pose a low risk of money laundering or terrorism financing; and
any risks posed by voluntary contributions outside of payroll, transfers from international sources, and withdrawals have been addressed by the conditions; and
due to the low money laundering and terrorism financing risks raised by the specified retirement schemes and the significant compliance costs that would arise from not granting this exemption, I consider that any benefits of requiring compliance with the Act are not justified by the associated costs; and
this exemption is consistent with (and has no effect on the purpose or intent of) the Act, the Financial Transactions Reporting Act 1996, and New Zealand’s international obligations as a member of the Financial Action Task Force and the Asia/Pacific Group on Money Laundering.
Part 4 PAYE intermediaries
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt all PAYE intermediaries, only with respect to authorised transactions, from the following provisions of the Act:
sections 11 to 39:
sections 50 to 71:
authorised transaction means any transaction that satisfies the requirements of section RP 2(2), RP 6, RP 14, RP 15, or RP 16 of the Income Tax Act 2007 or that fulfils the obligations of a PAYE intermediary under any of those provisions
PAYE intermediary means a person who is approved as a PAYE intermediary under section 15D of the Tax Administration Act 1994 (and includes a PAYE intermediary who is approved as a listed PAYE intermediary under section 15G of that Act).
the exemption applies only to transfers between New Zealand bank accounts and does not extend to any transfer from or to a foreign bank account:
to be eligible for the exemption, a PAYE intermediary must not use or provide any payroll remittance card in the course of its authorised activities.
the risk of money laundering or terrorist financing through the authorised transactions conducted by PAYE intermediaries is low because—
PAYE intermediaries must be registered with the Inland Revenue Department:
PAYE intermediaries are regulated by requirements under the Income Tax Act 2007 and the Tax Administration Act 1994:
PAYE intermediaries rely on information provided by the Inland Revenue Department in relation to employees:
PAYE intermediaries must provide an employer schedule to the Inland Revenue Commissioner on a monthly basis:
PAYE intermediaries must submit information to the Inland Revenue Department in a format that is acceptable to the Inland Revenue Department and that identifies all parties to any wire transfer:
the tasks performed by PAYE intermediaries in the manipulation and transfer of funds are limited to the deduction and transfer of income tax and other specific deductions:
any risks present within the authorised transactions conducted by PAYE intermediaries are dealt with by the conditions of the exemption:
any benefits of requiring compliance with the Act are not justified given the associated costs owing to the low money laundering and terrorism financing risks raised by the authorised transactions conducted by PAYE intermediaries and the significant compliance costs that would arise in the absence of this exemption.
Part 5 Reporting entities whose customers are licensed managing intermediaries
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt those reporting entities whose customers include licensed managing intermediaries and LMI customers from carrying out the following requirements in respect of those customers:
licensed managing intermediary means any of the following:
an FMA appointee (as defined in sections 22(2) and 37(1) of the Financial Markets Supervisors Act 2011)
LMI customer means a person—
that is a customer of a licensed managing intermediary; and
on whose behalf a transaction is conducted by the licensed managing intermediary giving instructions to the reporting entity (whether alone or together with the person); and
to whom the reporting entity provides a facility in the name of the person for the purposes of acting on those instructions.
In respect of a customer that is a licensed managing intermediary, this exemption is made subject to the following conditions:
the reporting entity must conduct simplified customer due diligence on the licensed managing intermediary in respect of which the exemption is relied on; and
the reporting entity must conduct enhanced customer due diligence on a customer in accordance with section 22A(2) of the Act if the customer conducts a transaction to which section 22A of the Act applies; and
In respect of an LMI customer, this exemption is made subject to the following conditions:
the reporting entity must conduct simplified customer due diligence on a licensed managing intermediary that provides 1 or more financial services to the LMI customer in connection with the services provided by the reporting entity to the LMI customer, as if the licensed managing intermediary were the customer of the reporting entity in relation to those services; and
the reporting entity must conduct enhanced customer due diligence on an LMI customer in accordance with section 22A(2) of the Act if the reporting entity is instructed to conduct a transaction in respect of an LMI customer to which section 22A of the Act applies; and
must obtain written confirmation, signed by a senior manager of the licensed managing intermediary, that the LMI customer is a customer of the licensed managing intermediary; and
must obtain written confirmation that the licensed managing intermediary has undertaken customer due diligence on the LMI customer as required under the Act; but
is not required to verify a written confirmation obtained under subparagraphs (i) and (ii) unless there are reasonable grounds for the reporting entity to doubt the adequacy or veracity of the written confirmation; and
the reporting entity must comply with any requests from its AML/CFT supervisors for the name of 1 or more LMI customers in respect of which the exemption is relied on.
there is a low risk of money laundering or terrorism financing in respect of transactions relating to licensed managing intermediaries and LMI customers because licensed managing intermediaries operate within a heavily regulated environment; and
the requirement for a reporting entity to conduct standard customer due diligence on a licensed managing intermediary or an LMI customer may lead to duplication of customer due diligence obligations; and
Part 6 Reporting entities whose customers are specified managing intermediaries
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt those reporting entities whose customers include specified managing intermediaries and SMI customers from carrying out the following requirements in respect of those customers:
SMI customer means a person—
that is a customer of a specified managing intermediary; and
on whose behalf a transaction is conducted by the specified managing intermediary giving instructions to the reporting entity (whether alone or together with the person); and
to whom the reporting entity provides a facility in the name of the person for the purpose of acting on those instructions
excludes a licensed managing intermediary.
In respect of a customer that is a specified managing intermediary, this exemption is made subject to the following conditions:
clause (1)﻿(a) and (b) must not be relied on in respect of a beneficial owner that has effective control, or owns more than 25%, of the customer; and
the reporting entity must conduct enhanced customer due diligence on the customer in accordance with section 22A(2) of the Act if the customer conducts a transaction to which section 22A of the Act applies; and
In respect of an SMI customer, this exemption is made subject to the following conditions:
clause (1)﻿(a) and (b) may not be relied on in respect of an SMI customer that has effective control, or owns more than 25%, of the specified managing intermediary; and
the reporting entity must conduct enhanced due diligence on an SMI customer in accordance with section 22A(2) of the Act if the SMI customer conducts a transaction to which section 22A of the Act applies; and
must obtain written confirmation, signed by a senior manager of the specified managing intermediary, to the effect that the specified managing intermediary—
has an AML/CFT programme (or foreign equivalent); and
the reporting entity must comply with any request from its AML/CFT supervisor for the name of 1 or more SMI customers in respect of which the exemption is relied on.
This exemption has been granted because the requirement for a reporting entity to conduct customer due diligence on all beneficial owners of a specified managing intermediary or on all SMI customers—
is out of proportion to the risk of money laundering and terrorism financing posed.
Part 7 Shared compliance officer for members of a designated business group
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt reporting entities that are members of the same designated business group, or are in the process of electing to become members of the same designated business group, from the following provisions of the Act:
section 56(2); and
For the purposes of this exemption, the process of electing to become members of the same designated business group means the process by which a group of 2 or more persons that are eligible to be members of the same designated business group have decided to become members and is concluded by providing a form in writing to the AML/CFT supervisor in accordance with regulation 6 of the Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011.
This exemption may be relied upon by reporting entities that are eligible to be members of the same designated business group (as defined in the Act).
The exemption may also be relied upon by an entity incorporated and resident in Australia that is subject to AML/CFT requirements in New Zealand in respect of its New Zealand activities.
a reporting entity must appoint an employee of a member of the designated business group to act as their compliance officer under the Act (the shared compliance officer); and
if the designated business group does not have employees, the reporting entity must appoint a person to act as the shared compliance officer for the designated business group; and
the shared compliance officer must be domiciled in either New Zealand or Australia; and
the shared compliance officer must administer and maintain the AML/CFT programmes of each member of the designated business group that is a reporting entity and has appointed the shared compliance officer; and
the shared compliance officer must report to a senior manager of each member of the designated business group that has appointed the shared compliance officer.
The exemption has been granted for the following reason: allowing members of a designated business group to share a compliance officer is consistent with the policy principle of reducing regulatory burden (where possible and in the circumstances where it is appropriate to do so).
Part 8 Financial advisers arranging for relevant services to be provided for retirement schemes
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt all financial advisers who arrange for a manager of a retirement scheme to provide relevant services to a customer or an intended customer of the retirement scheme from sections 10 to 71 of the Act.
DIMS licensee has the same meaning as in section 392 of the Financial Markets Conduct Act 2013
financial adviser has the same meaning as in section 8 of the Financial Advisers Act 2008
financial product has the same meaning as in section 5 of the Financial Advisers Act 2008
investment-linked contract of insurance has the same meaning as in regulation 5 of the Financial Advisers (Definitions, Voluntary Authorisation, Prescribed Entities, and Exemptions) Regulations 2011
manager has the same meaning as in section 6(1) of the Financial Markets Conduct Act 2013 and, for the purposes of this exemption, includes any authorised body of the manager as that term is defined in section 6(1) of the Financial Markets Conduct Act 2013
relevant service has the same meaning as in regulation 4 of the Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011
retirement scheme has the same meaning as in section 6(1) of the Financial Markets Conduct Act 2013 and, for the purposes of this exemption, excludes a Schedule 3 scheme (as defined in section 6(1) of the Financial Markets Conduct Act 2013).
This exemption does not apply to financial advisers to the extent that they provide a financial adviser service in respect of any of the following:
a financial product (other than a managed investment product that is an interest in a retirement scheme):
an investment-linked contract of insurance:
a renewal or variation of the terms and conditions of any product specified in paragraphs (a) to (c).
the relevant financial adviser has reasonable cause to believe the manager of the relevant retirement scheme is compliant with its obligations under the Act; and
the relevant financial adviser must, for the purposes of section 34 of the Act, act as an agent of the manager of the relevant retirement scheme, and agree to carry out, and carry out, the following obligations on behalf of the manager:
conducting customer due diligence and obtaining and verifying any information required under the Act for each customer or intended customer of the retirement scheme introduced by the financial adviser:
reporting to the manager any suspicious activities or patterns of activities that the financial adviser becomes aware of in relation to any customer or intended customer introduced to the retirement scheme by the financial adviser:
providing transaction records and identity verification records to the manager in a timely manner:
ensuring that any employee engaged in AML/CFT-related duties by the financial adviser is appropriately vetted and provided with training on the manager’s obligations under the Act:
establishing procedures that are consistent with the manager’s risk assessment and that are compliant with the Act.
financial advisers act on behalf of retirement scheme managers to undertake anti-money laundering and countering financing of terrorism obligations:
there is a low risk of money laundering or financing of terrorism in relation to retirement schemes:
the exemption reduces the compliance burden for financial advisers that only provide advice on retirement schemes and removes any duplication of costs relating to customer due diligence and transaction reporting that must be carried out by retirement scheme managers in relation to the same customers.
Part 9 Specified employee security purchase schemes
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt relevant persons from sections 10 to 71 of the Act where relevant persons carry out relevant services in respect of a specified employee security purchase scheme.
means an employee or a director of an issuer or of any of its subsidiaries or the issuer’s holding company or any subsidiaries of the issuer’s holding company; and
includes a person who provides personal services (other than as an employee) principally to the issuer or any of its subsidiaries or the issuer’s holding company or any subsidiaries of the issuer’s holding company
issuer means,—
in relation to an equity security, the company, industrial and provident society, building society, or other entity to which the security relates:
in relation to a managed investment product, the manager of the managed investment scheme to which the product relates:
in relation to an option or a right to acquire an equity security or managed investment product, the person that is required to either issue or transfer the equity security or managed investment product to the eligible person under the terms of the specified employee security purchase scheme
managed investment scheme means a managed investment scheme (as defined in section 9 of the Financial Markets Conduct Act 2013)
every financial institution (as defined in section 5(1) of the Act) that is—
a managed investment scheme; or
a trustee of a managed investment scheme; or
an issuer of the specified security that may be offered under the specified employee security purchase scheme; or
a	subsidiary or a holding company of the person specified in subparagraph (iii), or a subsidiary of the holding company of the person specified in subparagraph (iii), that manages or operates the specified employee security purchase scheme; or
a manager or a trustee of any trust established for the specified employee security purchase scheme; and
every person acting on behalf of, or under an agreement or arrangement with, any or all of the persons specified in paragraph (a)﻿(i) to (v) in respect of the specified employee security purchase scheme
relevant service means a service provided by a relevant person in the course of carrying out a financial activity in relation to a specified employee security purchase scheme
specified employee security purchase scheme means a scheme under which specified securities may be offered to an eligible person
specified security means an equity security or a managed investment product (each as defined in section 8(2) and (3) of the Financial Markets Conduct Act 2013) in the entity or managed investment scheme to which it relates, or an option or a right to acquire such an equity security or managed investment product, that is offered to eligible persons under a specified employee security purchase scheme
This exemption is made subject to the following condition: offers of specified securities must be made as part of remuneration arrangements for the eligible person or otherwise made in connection with the employment or engagement of the eligible person.
there is a low risk of money laundering or financing of terrorism associated with specified employee security purchase schemes due to the enduring relationship that the relevant person is likely to have with the eligible person, and a range of verifiable identity information is held about eligible persons:
the obligations imposed on relevant persons would be disproportionate given the low risk of money laundering and financing of terrorism:
money laundering and financing of terrorism risks are further mitigated by the condition that offers of specified securities must be made as part of the remuneration arrangements of eligible persons:
the exemption is consistent with the Act and New Zealand’s obligations as a member of the Financial Action Task Force, and there is a low risk of the exemption having an adverse impact on the integrity of, and compliance with, the Act.
Part 10 Specified securities investment schemes
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt relevant persons from sections 10 to 71 of the Act where relevant persons carry out relevant services in respect of a specified securities investment scheme.
in relation to a managed investment product, the manager of the managed investment scheme to which the product relates
an issuer of the specified securities that are the subject of the specified securities investment scheme; or
a manager or a trustee of any trust established for the specified securities investment scheme; and
every	person acting on behalf of, or under an agreement or arrangement with, any or all of the persons specified in paragraph (a)﻿(i) to (iv) for the purposes of the specified securities investment scheme
relevant service means a service provided by a relevant person in the course of carrying out a financial activity in relation to a specified securities investment scheme
specified investor means a person who holds—
a managed investment product (within the meaning of section 8(3) of the Financial Markets Conduct Act 2013) in a managed investment scheme that has the specified securities investment scheme; or
an equity security (within the meaning of section 8(2) of the Financial Markets Conduct Act 2013) in an issuer that has the specified securities investment scheme
specified securities investment scheme means—
a dividend or distribution reinvestment scheme established by (or in respect of) an issuer under which specified investors may acquire specified securities and the purchase of those specified securities is not funded, in whole or in part, by cash; or
an investment scheme established by (or in respect of) an issuer under which specified investors may acquire specified securities and the purchase of those specified securities is not funded, in whole or in part, by cash
specified security means an equity security or a managed investment product (each as defined in section 8(2) and (3) of the Financial Markets Conduct Act 2013) in the entity or managed investment scheme to which it relates that is offered to specified investors under a specified securities investment scheme.
in the case of a dividend or distribution reinvestment scheme, the specified securities must only be issued to or acquired by specified investors to the extent of their participation in the reinvestment scheme, and where all or a specified part of the net proceeds of the dividends or distributions payable are applied to the purchase of the specified securities:
in the case of an investment scheme, the specified securities must only be issued to or acquired by specified investors to the extent of the specified investors’ entitlement under the investment scheme to purchase specified securities by means other than cash payment.
there is a low risk of money laundering or financing of terrorism associated with specified securities investment schemes because,—
under a dividend or distribution reinvestment scheme, a specified investor agrees to forgo a cash dividend or distribution on the specified securities of the issuer, and instead receives specified securities; and
under an investment scheme, a specified investor purchases specified securities by means other than cash payment:
the obligations imposed on relevant persons administering the specified securities investment schemes would be disproportionate given the low risk of money laundering and financing of terrorism:
money laundering and financing of terrorism risks are further mitigated by the conditions of this exemption, which mean that the specified investor cannot pay cash for the acquisition of specified securities:
Part 11 Casino loyalty schemes
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt casinos, in relation to their loyalty schemes, cards, or instruments, from the following provisions of the Act:
sections 14(1)﻿(a), 22(1)﻿(a), and 26(1); and
subject to clause 5 of this notice, section 31.
For the purposes of this exemption, casino loyalty scheme means a scheme operating in a casino that—
generates points or credit exclusively through any of the following:
gambling and the purchase of food and beverages:
gambling and the purchase of hotel accommodation:
gambling and the purchase of food and beverages and hotel accommodation; and
persons cannot deposit funds or credit into a casino loyalty scheme account or other loyalty arrangement or any associated loyalty card or instrument; and
persons can only hold 1 loyalty scheme account or arrangement for each casino at a time and it is not transferable; and
the maximum value of points or credit where points or credit can be redeemed in cash in a casino loyalty scheme account or arrangement is $5,999.99; and
casino loyalty scheme points or credit expire after 12 months from the date of the points accrual; and
points earned through the casino loyalty scheme can only be redeemed in New Zealand.
a business relationship that is a membership in a casino loyalty scheme operated by a casino:
a casino loyalty scheme card or an instrument that is used by a customer for the purpose of utilising membership in a casino loyalty scheme.
However, this exemption does not apply,—
in relation to clause 3(a), to any casino loyalty card or instrument that enables cashless gambling:
in relation to clause 3(b), to any casino loyalty card or instrument that enables other functions to be carried out, including cashless transactions.
The exemption from account monitoring obligations—
applies only to the obligation to monitor the generation of loyalty points and the redemption of loyalty points; and
does not affect the obligation to conduct other account monitoring that might identify grounds for reporting a suspicious activity; and
does not affect obligations under section 40 of the Act to report an activity or a suspicious activity.
before an application for membership in the loyalty scheme is accepted, the casino must identify each customer and be reasonably satisfied that it has established the customer’s identity; and
in relation to a customer identified under paragraph (a), the casino must keep its identity and verification records for a period of 5 years after the end of the business relationship with that customer to assist agencies in the detection, investigation, and prosecution of offences; and
section 11(4) of the Act does not apply where information is obtained for the purpose of identification and verification under paragraph (a).
the money laundering risk associated with casino loyalty schemes is lowered by the criteria listed in clause 2(b); and
the conditions set out in clause 6 sufficiently mitigate any negative impact on the prevention, detection, investigation, and prosecution of offences this exemption may have; and
the compliance burden that casinos would be subject to, in the absence of this exemption, is disproportionate to the risk of money laundering associated with casino loyalty schemes.
Part 12 Statutory supervisors of retirement villages
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt statutory supervisors of retirement villages from sections 11 to 31 of the Act for services provided in relation to repayable funds accepted in accordance with the Retirement Villages Act 2003 (the RV Act).
For the purposes of this exemption, recipient means a person who is entitled to a refund under the RV Act and, for the avoidance of doubt, is a customer for the purposes of the Act.
This exemption only applies to members of the Trustee Corporations Association of New Zealand Incorporated that are licensed under the Financial Markets Supervisors Act 2011 to act as a statutory supervisor in respect of retirement villages.
a statutory supervisor is required, in accordance with sections 14 to 17 of the Act, to undertake standard customer due diligence on the recipient of any refunded monies when—
an occupation right agreement is cancelled in accordance with section 29(2) of the RV Act; and
the statutory supervisor is required to refund moneys over the threshold value of $9,999.99:
a statutory supervisor is required, in accordance with sections 23 and 24 of the Act, to undertake enhanced customer due diligence on the recipient referred to in paragraph (a) if the statutory supervisor is required to report the cancellation and refund to the Commissioner as an activity, or suspicious activity, under section 40(3) of the Act.
The exemption has been made for the following reason: there is a low risk of money laundering or terrorism financing through the statutory supervisors when they provide services in relation to repayable funds accepted in accordance with the RV Act because—
statutory supervisors usually only hold the deposit paid by potential retirement village residents, which is ordinarily between $2,500 and $5,000; and
there is a comprehensive regime in place regulating the way a prospective resident may enter into an occupation right agreement; and
statutory supervisors do not deal in cash, no moneys are passed through a third party, and, by way of separate identification, an independent lawyer is required to certify that a statutory supervisor has advised a prospective resident prior to the signing of an occupation right agreement (this ensures there is minimal risk of funds being transferred into the hands of potential money launderers); and
when a deposit is paid by someone other than the intended resident, confirmation of the source of funds is required if the reporting entity considers that enhanced due diligence should apply owing to the level of risk involved.
The exemption is made subject to the conditions set out in clause 4 because—
any money paid in respect of an occupation right agreement can be refunded during the 15-working-day cooling-off period as a matter of right; and
although unusual, some operators receive a high proportion of the purchase price during the cooling-off period and progress payments are also often received during that period (any progress payments received must be held by the statutory supervisor until settlement or cancellation of the occupation right agreement).
Part 13 Designated issuers that issue debt securities to specified subscribers through intermediaries
As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), I exempt from sections 10 to 26 and 37 of the Act transactions where a designated issuer issues debt securities to specified subscribers through intermediaries.
debt securities has the same meaning as in section 8(1) of the Financial Markets Conduct Act 2013
NZX Participant means a Market Participant (as defined in the NZX Participant Rules issued by NZX Limited and dated 1 December 2017, as amended or replaced from time to time)
special purpose vehicle has the same meaning as in regulation 9 of the Non-bank Deposit Takers (Declared-out Entities) Regulations 2015
the initial subscriber for the debt securities; or
the purchaser of the debt securities from the intermediary.
the designated issuer must comply with all relevant obligations in the Act in relation to customer due diligence information concerning the specified subscribers that the designated issuer receives (excluding obligations under sections 10 to 26 and 37 of the Act, but including record keeping and all other obligations).
the low level of risk of money laundering or financing of terrorism associated with issuing debt securities to specified subscribers means that requiring designated issuers to comply with their obligations under sections 10 to 26 and 37 of the Act is of little benefit:
This notice, which comes into force on 30 June 2018, satisfies the publication requirement under section 157(5) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act) for class exemptions that the Minister of Justice grants under section 157(1) of the Act. Each Part of the Schedule sets out a class exemption. A class exemption applies on and from the date, and expires on the date, specified in the Part of the Schedule that sets out its particulars. When a class exemption expires, the relevant Part of the Schedule is revoked.
Date of notification in Gazette: 26 June 2018.