Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill

Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill The Parliament of New Zealand enacts as follows: 1 Title This Act is the Anti-Money Laundering and Countering Financing of Terrorism Amendment Act 2024 . 2 Commencement This Act comes into force on the day after Royal assent. 3 Principal Act This Part amends the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. 4 Section 5 amended (Interpretation) In section 5(1), replace the definition of beneficial owner with: beneficial owner — a means the individual who— i has effective control of a customer or person on whose behalf a transaction is conducted; or ii owns a prescribed threshold of the customer or person on whose behalf a transaction is conducted; and b includes an individual— i with ultimate ownership or control of the customer, whether directly or indirectly; or ii who is a customer of a customer, and on whose behalf the transaction is conducted, but only if the individual meets the requirement set out in subparagraph (i) In section 5(1), definition of designated non-financial business or profession ,— a in paragraph (a)(iv), after professional services , insert provided by the business or profession ; and b in paragraph (a)(vi), replace engaging in or giving instructions with carrying out, preparing to carry out, or giving instructions ; and c in paragraph (a)(vi)(A), replace Land Transfer Act 1952 with Land Transfer Act 2017 . In section 5(1), replace the definition of trust and company service provider with: trust and company service provider — a means a person (other than a law firm, a conveyancing practitioner, an incorporated conveyancing firm, an accounting practice, or a real estate agent) who carries out any of the activities described in paragraphs (a)(i) to (vi) of the definition of designated non-financial business or profession; but b excludes a person that is a financial institution if the only activity described in paragraphs (a)(i) to (vi) of the definition of designated non-financial business or profession carried out by the financial institution is managing client funds (other than sums paid as fees for professional services provided by the business or profession), accounts, securities, or other assets In section 5(1), insert in their appropriate alphabetical order: money or value transfer service — a means a service that— i accepts, or is involved in the acceptance of, funds or value, whether in cash, in other physical forms, or by electronic or other non-physical means; and ii pays, or arranges for the payment of, a corresponding sum in cash, in other physical forms, or by electronic or other non-physical means to a beneficiary by means of a communication, message, or transfer, or through a clearing network to which the operator of the service belongs; and b includes transactions that involve 1 or more intermediaries and a final payment to a third party 5 Section 6 amended (Application of this Act to reporting entities) In section 6(4), after paragraph (e), insert: f in the case of a reporting entity specified in paragraphs (a) to (e) that, in the ordinary course of business, carries out an activity (or activities) of another type of reporting entity specified in those paragraphs, it carries out activities of the other type of reporting entity. 6 Section 14 amended (Circumstances when standard customer due diligence applies) In section 14(1)(b), replace customer with person . 7 Section 18 amended (Circumstances where simplified customer due diligence applies) In section 18(1)(b), replace customers with persons . 8 Section 22 amended (Circumstances where enhanced customer due diligence applies) In section 22(1)(b), replace customer with person in each place. In section 22(1)(b)(ii), replace customer with person . In section 22(2)(b), replace customer with person . In section 22(5)(b), replace customer with person . 9 Section 24 amended (Enhanced customer due diligence: verification of identity requirements) After section 24(3), insert: 4 However, a reporting entity is not required to comply with subsection (1)(b) if the customer or person is a trust described in section 22(1)(a)(i) or (b)(i) and the reporting entity is satisfied that any risks have been mitigated by conducting— a standard customer due diligence under sections 15 and 16; and b enhanced customer due diligence under sections 23 and 25. 10 Section 26 amended (Politically exposed person) In section 26(1), after reasonable steps , insert according to the level of risk involved . In section 26(2), replace with whom it has established with with whom it establishes . In section 26(3), replace with whom it has conducted with with whom it conducts . 11 Section 29 amended (Correspondent banking relationships) In section 29(2)(c), delete and effective . 12 Section 37 amended (Prohibitions if customer due diligence not conducted) In section 37(1), replace is unable to with does not . In section 37, after subsection (2), insert: 3 An ordering institution must not order an international wire transfer that does not include the information required by sections 27(1) and 27A(1). 13 Section 52 amended (How records to be kept) In section 52, insert as subsection (2): 2 If required to produce records on notice under this Act or any other enactment, a reporting entity must produce those records,— a in a case where subsection (3) applies, as soon as possible after notice is given to the reporting entity; or b in any other case,— i by any specified date given in the notice that the person who requires the records considers reasonable in the circumstances; or ii if no specified date is given in the notice, within 20 working days after notice is given to the reporting entity. 3 If a person requiring records under subsection (2) considers that the production of those records is a matter of urgency, the person— a may require those records to be produced as soon as possible after notice is given to the reporting entity; and b must state in that notice that the records must be produced as soon as possible. 14 Section 56 amended (Reporting entity must have AML/CFT programme and AML/CFT compliance officer) In section 56(3), replace a person with an individual . In section 56(4), after must , insert be a senior manager or . 15 Section 58 amended (Risk assessment) In section 58(3), after paragraph (b), insert: ba incorporate all relevant risks that are identified by any risk assessments produced under sections 131 and 142; and 16 Heading to subpart 6 of Part 2 amended In the heading to subpart 6 of Part 2, after cash , insert or stored value instrument . 17 New section 67B inserted (Meaning of stored value instrument) Before section 68, insert: 67B Meaning of stored value instrument In this subpart, stored value instrument — a means a portable device (for example, a voucher or a casino chip) that represents or contains monetary value that is not physical currency but that can be redeemed for cash; and b includes gold, silver, precious metals, and precious stones; but c does not include a debit card or a credit card. 18 Section 68 amended (Reports about movement of cash into or out of New Zealand) In the heading to section 68, after cash , insert or stored value instruments . In section 68(1), after cash , insert or stored value instruments . In section 68(1)(a), after cash , insert or the stored value instruments . In section 68(1)(b), after cash , insert or those stored value instruments . In section 68(1)(c), after cash , insert or those stored value instruments . In section 68(2), after cash , insert or stored value instruments in each place. In section 68(3), after cash , insert or stored value instruments in each place. After section 68(3), insert: 4 For the purposes of this Act, a person is to be treated as having moved cash or stored value instruments out of New Zealand if the person— a intends to leave New Zealand on an aircraft or a ship; and b for the purpose of leaving New Zealand, goes towards an aircraft or a ship through a Customs-controlled area; and c either— i takes cash or stored value instruments into the Customs-controlled area; or ii has cash or stored value instruments in their baggage; and d has not given a report in respect of the movement of that cash or those stored value instruments in accordance with this subpart. 5 In this section, Customs-controlled area has the same meaning as in section 5(1) of the Customs and Excise Act 2018. 19 Section 69 amended (Reports about receipt of cash from outside New Zealand) In the heading to section 69, after cash , insert or stored value instruments . In section 69, after cash , insert or stored value instruments . In section 69(a), after cash , insert or the stored value instruments . In section 68(b), after cash , insert or those stored value instruments . In section 69(c), after cash , insert or those stored value instruments . After section 69, insert as subsection (2): 2 To avoid doubt, subsection (1) does not apply in respect of cash or stored value instruments that were moved into New Zealand by a person who was liable to complete a report in respect of the movement of that cash or those stored value instruments in accordance with this subpart. 20 Section 70 amended (Reporting requirements) In section 70(d)(i), after cash , insert or stored value instruments . In section 70, replace paragraph (d) with: d be provided to a Customs officer or any other prescribed person,— Accompanied cash i in the case of accompanied cash or stored value instruments that the person brings into New Zealand, at the same time as the person presents themselves under section 103(1)(a) or (b) (obligations on persons arriving in New Zealand) of the Immigration Act 2009; or ii in the case of accompanied cash or stored value instruments that the person takes out of New Zealand, at the same time as the person presents themselves under section 119(1)(a) (obligations of persons leaving New Zealand) of the Immigration Act 2009; or Unaccompanied cash iii in the case of unaccompanied cash or stored value instruments that the person sends from outside New Zealand, at least 72 hours before the cash or stored value instruments are received in New Zealand; or iv in the case of unaccompanied cash or stored value instruments that the person sends out of New Zealand, at least 72 hours before the cash or stored value instruments leave New Zealand; or v in the case of unaccompanied cash or stored value instruments that are sent to the person from outside New Zealand, at least 72 hours before the person receives the cash or stored value instruments in New Zealand. 21 Section 71 amended (Information to be forwarded to Commissioner) In section 71(2), after cash , insert or stored value instruments in each place. 22 Section 78 amended (Meaning of civil liability act) In section 78, after paragraph (d), insert: daa fails to report activities in accordance with subpart 2 of Part 2: In section 78, after paragraph (e), insert: ea fails to undertake a risk assessment in accordance with the requirements of section 58 or review its risk assessment and AML/CFT programme in accordance with the requirements of section 59: eb fails to prepare or provide an annual report in accordance with section 60: 23 Section 79 amended (Possible responses to civil liability act) After section 79(a), insert: aa issue a censure under section 80A : 24 New sections 80A and 80B and cross-heading inserted After section 80, insert: Censures 80A Censures 1 The relevant AML/CFT supervisor may censure a person in accordance with subsections (2) and (4) if the AML/CFT supervisor is satisfied on reasonable grounds that the person has engaged in conduct that constitutes a civil liability act. 2 The AML/CFT supervisor must, at least 10 working days before censuring the person, give written notice that the AML/CFT supervisor may censure the person and set out the grounds upon which it proposes to do so. 3 A person who receives a notice under subsection (2) may make a written submission on the matter within 10 working days of receiving the notice. 4 The AML/CFT supervisor must give written notice of a censure, and the notice must set out the grounds upon which the AML/CFT supervisor has censured the person. 80B Appeals against censure A person may appeal to the District Court against a decision of an AML/CFT supervisor to issue a censure against the person under section 80A . 25 New section 90A inserted (Court must order that recovery from pecuniary penalty be applied to AML/CFT supervisor’s actual costs) After section 90, insert: 90A Court must order that recovery from pecuniary penalty be applied to AML/CFT supervisor’s actual costs If the court orders that a person pay a pecuniary penalty, the court must also order that the penalty must be applied first to pay the AML/CFT supervisor’s actual costs in bringing the proceedings. 26 Section 132 amended (Powers) In section 132(2)(e), after counterparts , insert , including (but not limited to) conducting inquiries in accordance with this Act on behalf of any overseas counterparts . After section 132(2)(f), insert: g recover costs and penalties awarded in proceedings taken under this Act. 27 Section 137 amended (Power to use information obtained as AML/CFT supervisor in other capacity and vice versa) After section 137(7), insert: 8 Nothing in this section limits the Privacy Act 2020 (which permits certain disclosures in addition to those authorised under this section). 28 Section 153 amended (Regulations) After section 153(1)(h), insert: ha prescribing for the form of a censure and the manner in which it must be issued: 29 Principal regulations Sections 30 and 31 amend the Anti-Money Laundering and Countering Financing of Terrorism (Cross-border Transportation of Cash) Regulations 2010. 30 Regulation 7 revoked Revoke regulation 7. 31 Schedule amended In the Schedule, clause 1(a), after cash , insert or stored value instruments with a value . In the Schedule, clause 1(b), after cash , insert or stored value instruments with a value . In the Schedule, clause 1(c), after cash , insert or stored value instruments with a value . In the Schedule, clause 2A, after unaccompanied cash , insert or stored value instruments . In the Schedule, clause 2A(a), after cash , insert or stored value instruments . In the Schedule, clause 2A(b), after cash of cash , insert case of cash or stored value instruments . In the Schedule, clause 2A(b)(ii), replace cash is with cash or stored value instruments are . 32 Principal regulations Sections 33 and 34 amends the Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011. 33 Regulation 5AA revoked (Inclusion: individual with ultimate ownership or control of customer or person) Revoke regulation 5AA. 34 Regulation 24A and cross-heading revoked Revoke regulation 24A and the cross-heading above regulation 24A. 35 Principal regulations Section 37 amends the Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Regulations 2011. 37 Regulation 15I revoked (Reporting entity that carries out activities of another kind of reporting entity) Revoke regulation 15I.