AML Sector Reviews

Dr AML


The Financial Action task Force (FATF) reviewed New Zealand's AML practices in 2020 and their findings are expected in February 2021. Having been ten years since their last review do not be surprised that there will be areas to be addressed.


AML/CFT Regime Gaps


It has become increasingly evident that there are still significant gaps in the AML/CFT regime and that in some areas we are not going far enough and in others we seem intent on making things difficult with no obvious benefit.


The Expiring Regulations Updates from the Department of Internal Affairs (DIA) for December 2020 will address some key pain-points for reporting entities and reflect the current risk environment. For example, agencies involved in commercial leasing will be happy to hear the CDD timing change to commercial leasing, made in response to the undue burden placed on agencies, and duplicate due diligence being conducted on landlords by multiple agencies. More information on these changes can be found here.


Expect Changes


The supervisors have already forewarned us that they will be taking increased action in 2021 - signalling that the ‘grace period’ for reporting entities has ended.


DIA has been the most active in terms of taking civil and criminal enforcement action and I would expect this trend to continue - hazarding a guess (and hoping) the legal sector will begin to come under increased scrutiny.


The statutory review of the AML/CFT Act must commence by July 2021 and be completed within a year.


There are ripples occurring across the supervisors as well as providers in the AML/CFT sector. In 2021 keep an eye out for developments in the following spaces:


(a) Code of practice for AML/CFT Providers

(b) Trust Framework

(c) Expectations of GDPR Standards

(d) Digital identity

(e) Statutory reviews of the AML/CFT Regime


For more Dr. AML advice make sure to subscribe to our monthly ATTIC magazine.


Or contact Dr. AML at draml@ticc.nz.


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