Your guide to the 2009 Anti-Money Laundering and Counter-Financing of Terrorism Act
Money laundering and financing of terrorism are similar crimes with different goals. Money laundering, probably the better understood of the two, involves funnelling illegitimate money through a legal business or activity to obscure its source and make it more difficult for authorities to track. Criminals funding terrorist organisations can use similar tactics to conceal where their funds are going and where they come from.
New Zealand’s Anti-Money Laundering and Counter-Financing of Terrorism Act (2009) was designed to put a halt to both these forms of illegal financial activity. To do this, the Act outlined new requirements for a range of financial organisations and businesses, aimed at collecting client information and identifying warning signs early on.
Is your business affected?
Because AML/CFT activity usually involves large transactions, the Act targets financial institutions and other businesses that handle high-value funds. These include casinos, accountants, lawyers, conveyancers and virtual assets providers.
If your business falls into one of these categories, you are obliged to meet the requirements of the AML/CFT Act and provide proof of compliance as needed.
What the requirements include
Meeting your obligations under the AML/CFT Act can be complicated, depending on the size and scope of your business.
Basic requirements include:
- Completing a risk assessment to establish the likelihood of your business being affected by money laundering and financing of terrorism
- Implementing an AML/CFT programme in your business – establishing processes for detecting, deterring, managing and mitigating the risks.
- Appointing a compliance officer to manage the programme
- Maintaining customer due diligence processes including collecting, verifying and storing customer identification and other information
- Reporting of suspicious activity
- Providing audits and annual reports to the appropriate body, and documenting your AML/CFT systems as needed
- Audits and reports are sent to your business sector’s supervisory body. The Reserve Bank of NZ monitors banks, life insurers and non-bank deposit takers, the Department of Internal Affairs (DIA) supervises casinos, lawyers, conveyancers and others, and the Financial Markets Authority (FMA) works with trustees, investment schemes, brokers and financial advisers.
An in-depth look at your obligations
Of course, a basic list doesn’t cover all the complexities involved in managing your AML/CFT compliance. Requirements can vary, depending on your business area and level of risk. The resources and guides provided by the DIA are a good way to work out what’s required of your business.
For example, customer due diligence (CDD) requirements can look different for different businesses. If your risk level is low and your customers meet certain requirements, you may only need to undertake a simplified CDD process. Others will complete the standard CDD process or even the enhanced version, which requires more in-depth information and verification.
Help with your compliance programme
Because the requirements can be so complex, it’s essential to get expert help with your AML/CFT compliance. That’s where First AML comes in. Our AML software solution manages CDD, automating some of the more time-consuming aspects and making the process simpler for you and your customers. Our data feeds into your AML/CFT reporting programme as well, so you have up-to-date, accurate information in your annual reports and audits.
You don’t have a choice about meeting AML/CFT obligations, but you can choose to make managing your programme as simple and straightforward as possible.
About First AML
First AML is an AML technology provider, and the maker of Source, an all-in-one AML platform. Source powers thousands of compliance experts around the globe to reduce the time and cost burden of complex and international entity KYC. Its enterprise-wide, long term approach to the KYC / CDD data lifecycle addresses time and cost challenges while minimising compliance, reputational and security risks.