Significant amendments to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (Act) have passed their third reading in Parliament and will shortly receive their Royal Assent.
These Bills are:
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Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill available here. This enacts some significant changes, which will come into effect the day after Royal Assent, which is likely to occur in the next few days; and
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Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill available here. This enacts major structural reforms and enhanced enforcement powers when it comes into effect on 1 July 2026.
The Beehive press release on the passing of the bills can be found here.
Both bills form part of the Government’s overhaul of the AML/CFT regime, which we have previously discussed.
Who needs to read it? Why?
All AML/CFT reporting entities should familiarise themselves with the amendments, consider their implications and review and update their AML/CFT programmes, risk assessments and processes accordingly.
Changes coming into force immediately
The Amendment Bill simplifies AML/CFT requirements and supports a risk-based approach to regulation. According to the Beehive press release, the Department of Internal Affairs (DIA) will soon update its guidance to reflect the changes made by the Bill.
It puts on a legislative footing several reforms previously introduced by regulations, including with respect to clarifying the ‘beneficial owner’ definition and the Act’s application to reporting entities that carry on activities covered by more than one reporting entity definition.
Other significant changes made by the Bill include:
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New ‘money or value transfer service’ (MVTS) definition: Captures services that accept funds or value in any form and pay or arrange payment of a corresponding sum to a beneficiary, including transactions involving intermediaries and third-party payments;
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Trust customer verification requirements reduced: Reporting entities will not be required to verify beneficiary and other trust information if risks are mitigated through standard customer due diligence (CDD) and enhanced CDD;
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Ordering institutions prohibited from ordering international wire transfers: Where these transfers do not include required originator and beneficiary information;
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PEP identification shifts to a risk-based standard: Determining if a customer or beneficial owner is a PEP will be "according to the level of risk involved” rather than the previous “reasonable steps”;
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Risk assessments must incorporate DIA and FIU risk assessments: DIA and the New Zealand Financial Intelligence Unit (FIU) have been given the function of producing risk assessments that monitor and assess ML/TF risk levels;
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New record production requirements: A reporting entity required by notice to produce records must do so as soon as possible if urgent, or by the date specified in the notice, or within 20 working days if no date is specified; and
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‘Civil liability act’ definition extended: Now includes failing to comply with suspicious activity reporting, risk assessment, AML/CFT programme and annual report requirements.
Changes coming into force from 1 July 2026
The Supervisor, Levy and Other Matters Amendment Bill aims to improve the efficiency and effectiveness of the AML/CFT regime and reduce the compliance burden on reporting entities.
Significant changes made by the Bill include:
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DIA as sole AML/CFT supervisor: With new powers to make codes of practice, rules, notices and exemption notices, subject to consultation requirements and reducing the need for regulations.
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DIA’s new investigation powers: DIA can require persons to attend meetings to answer questions or provide any other information (subject to advising person that entitled to have lawyer present and the right not to self-incriminate); require the production/access of records, documents or information; and enter dwellinghouses with occupier’s consent or under warrant;
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DIA may issue censures: Available where DIA has reasonable grounds that a person has engaged in a ‘civil liability act’, subject to 10 working days’ notice and District Court appeal.
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Minister to adopt AML/CFT National Strategy and work programme: The strategy will direct DIA and other AML/CFT agencies in achieving the Act's purpose, implemented through a regulatory work programme issued by the Ministry of Justice.
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Annual AML/CFT levy implemented: The levy funds the regulatory work programme with annual reporting on collections and expenditure, and mandatory triennial reviews of levy funding adequacy involving consultation with affected parties. Further details regarding the levies will be prescribed in regulations. We are awaiting an outcome of a recent consultation on the levy proposals, as discussed here.
What next?
The two Bills are awaiting Royal Assent, which is expected shortly.
Reporting entities not currently supervised by the DIA should familiarise themselves with the DIA's supervisory approach, guidance materials, and compliance expectations to ensure a smooth transition as the DIA becomes the sole supervisor later this year.
If you have any questions in relation to the new changes, or how your business can comply under the new requirements, please contact one of our experts.
This article was co-authored by Leanne Chew (Solicitor) and John Anayi (Law Clerk), in our Financial Services team.
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