From July 9 2021 four changes to regulations underpinning the Anti-Money Laundering and Countering Financing of Terrorism Act came into force. These improvements to the current regime clarify areas of exempt activities, aid in lowering compliance costs for organisations by changing the default auditing timeframe and amend the requirements for customer due diligence in some cases.
The Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Amendment Regulations 2021 has presented some of the most impactful changes. This has come as a response to recommendations of the Financial Action Task Force that the use of nominee directors should not be misused. There is now a requirement for reporting entities to obtain additional customer due diligence (CDD) information on companies that are a company or Limited Partnership which have any ‘nominee directors’, ‘nominee general partners’ and ‘nominee shareholders’. Each of these terms have been defined within the regulations themselves and any staff involved in transactions involving these entities must be ready to undertake these further verification steps.
In addition, section 59(2) of the Act has been amended to reduce the compliance burden on reporting entities, by replacing the default requirement to audit a reporting entity’s risk assessment and compliance programme every 2 years to every 3 years. This only affects medium and low-risk reporting entities however, as AML/CFT supervisors will make their own assessment of the risk and if an entity is required to audit more or less frequently.
The Anti-Money Laundering and Countering Financing of Terrorism (Cross-border Transportation of Cash) Amendment Regulations 2021 has also made changes to reporting standards, by replacing the prescribed form of a border cash report in the Schedule of the current regulations with only a list of what the report must contain (remaining substantially unaltered from the previous version). This allows for the regulations to prescribe substance over form and allow for the regime to come into the modern era and perhaps allow electronic approaches to declaring cash movements in future.
While these legal changes have not made changes to the Act itself, the Regulations are the mechanism which reporting entities look to for direction on how to meet their obligations in the most practical terms. The GRC Solutions NZ Anti-Money Laundering Course has been tailored to capture emerging updates in this complex regulatory landscape, while engaging with learners across all the key concepts on how to act against these threats to the operation of our financial system.