Joint statement by AML/CFT Supervisors published

  • Legal update

    22 May 2024

Joint statement by AML/CFT Supervisors published  Desktop Image Joint statement by AML/CFT Supervisors published  Mobile Image

The Reserve Bank of New Zealand (RBNZ), the Financial Markets Authority (FMA) and the Department of Internal Affairs (DIA) (together the AML/CFT Supervisors) released a brief joint statement heralding the new Amendment Regulations to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Regulations), the second stage of which are set to come into force on 1 June 2024 (Stage Two). A copy of the joint statement is available here.

Who needs to read it? Why?

The joint statement advises the approach the AML/CFT Supervisors will take, at least initially, to enforcement under the upcoming Regulations, and the associated guidance.

It is relevant to all reporting entities (and, in particular, virtual asset service providers (VASPs)) who need to make changes as a result of the new requirements under the Regulations.

What does it cover?

In the joint statement, the AML/CFT Supervisors indicate that, following the new requirements in the Regulations coming into force, they will take a “broadly educative and constructive” approach with reporting entities. Their focus will be on issuing guidance on compliance expectations and more generally supporting reporting entities to comply with the new requirements at the earliest opportunity.

But the joint statement goes on to point out that each AML/CFT Supervisor retains the ability to take its own approach to enforcement action consistent with its stated approach to enforcement. Where relevant, AML/CFT Supervisors will communicate any changes to their respective enforcement strategies with their supervised reporting entities.

The AML/CFT Supervisors have recently issued several guidelines relating to the Regulations, which can be accessed via the AML/CFT Supervisor’s respective websites. For RBNZ reporting entities, see here; for FMA reporting entities, see here; and for DIA reporting entities, see here.

Our view

With only a few weeks to go before the Stage Two requirements are live on 1 June, there is limited time for reporting entities to come up to speed with the new requirements – if they have not already done so.

The joint statement is to be welcomed as signalling that the AML/CFT Supervisors are not generally going to take an aggressive enforcement approach from the outset in relation to the new requirements. Although the Stage Two Regulations were issued a year ago, most of the supporting guidance has only been issued recently. As a result, many reporting entities, especially VASPs, have not understood how they would be impacted.

However, it should not be misunderstood to indicate non-compliance will be tolerated in the longer term. Our interactions with AML/CFT Supervisors indicate that the educative approach assumes that reporting entities are working diligently toward compliance. It is also clear that the approach assumes that the reporting entity is otherwise compliant with the regime.

The Regulations were the result of a widespread reform agenda arising out of the Ministry of Justice’s Statutory Review. These new requirements are expected to have widespread impact and will affect most, if not all, AML reporting entities.

What next?

If you have any questions about the Regulations and the impacts on your business, the wider reform process, or the AML/CFT regime more generally, please contact one of our experts.