Update from the TIC Company
Following Ministry of Justice consultation with industry bodies and advocacy by interested parties such as AML professionals and the TIC Co., we are able to confirm that Cabinet has agreed to make changes to the AML/CFT Exemption and Definitions Regulations.
These changes 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.
Please see below for a brief overview of the new regulations and regulatory updates that the Ministry of Justice aims to have in force by July 2021.
Low-risk Payments will be excluded from the AML/CFT Act when they are received from clients to pay certain types of low-risk payments.
Limited partnerships will be able to join a designated business group if they are related to the other members of the designated business group.
AML/CFT audits will be required every three years. In some cases, the DIA can request more regular or less regular audits, if this is the case, you will be notified by the DIA.
A new regulation will be put into place to reduce the likelihood for a business to unintentionally tip off people who are subject to a Police inquiry. An exemption will apply, for 30 days unless otherwise notified by the Police, from having to conduct enhanced due diligence in respect of the subject of Commissioner’s Order. A Commissioner’s Order is when the Commissioner of Police requires information relevant to a suspicious activity report or prescribed transaction report.
Entities have to obtain information from customers, who are companies and clarify if there are any nominee director relationships or nominee shareholder relationships.
AML/CFT obligations continue to apply to both ordering and beneficiary institutions where a wire transfer of more than $1000 is conducted and the reporting entity does not have a business relationship with the person sending the funds or where the entity receives funds from a person with which they do not have a business relationship with.
AML/CFT obligations do not apply when carrying out services as an executor, an administrator, or a trustee in respect of services provided in the administration of an estate or, in the case of a trustee, in respect of services provided to beneficiaries of a family trust. This applies to the administration of estates and family trusts.
AML/CFT obligations do not apply to property management activities even when you provide other real estate services that do not attract AML/CFT obligations.
Commercial leasing, real estate agents will only be required to conduct customer due diligence on the landlord when an offer to lease is presented, rather than when they sign an agency agreement.
Reporting entities that are liquidators. If it is appointed by the High Court, there is no requirement to conduct initial customer due diligence on the liquidated company. However, it is noted that requirements will continue to relate to payments to beneficial owners, wire transfers, prescribed and suspicious activity reporting.
The TIC Co. will continue to keep you updated on adaptions to New Zealand's AML/CFT systems as they evolve. Please touch base with us if you have any questions about how these changes effect your reporting entity.
For more regulation updates, check out our Regulatory Reports to stay updated with any sector changes.