The introduction of a new bill designed to launch a ‘smarter’ AML/CFT framework that puts businesses first while clamping down on criminal activity has been approved by the Cabinet.
Associate Justice Minister Nicole McKee announced yesterday (9 July) that the New Zealand government will be advancing its overhaul of its (AML) and countering the financing of terrorism (CFT) regime to bolster the country’s efforts to tackle financial crime.
The cabinet has given the green light to the introduction of the bill, which is aimed at strengthening enforcement powers for both regulators and the police to push forward with the country’s crack down on money laundering.
McKee said: “Since 2019, the global financial and regulatory landscape has shifted significantly. We need a smarter, more agile AML/CFT system – one that targets criminals’ ability to launder money, while enabling New Zealand businesses to operate efficiently and competitively.”
She added: “We want New Zealand to be one of the easiest places in the world to do legitimate business and one of the hardest for criminals to hide.”
A NEW ERA
If passed, the proposed legislation would also usher in a new financial sanctions supervisory regime and prompt engagement on the introduction of a “sustainable levy” for the funding of AML/CFT framework improvements.
At the heart of the overhaul is a commitment to putting New Zealand businesses first, with one of the key aims of the bill being enhanced clarity and consistency. McKee emphasised that the government’s focus in on “targeting criminals, not tying up legitimate businesses in unnecessary red tape”.
She also confirmed that, to help companies focus their efforts “where the real risks lie”, address-verification requirements for lower-risk customers will be scrapped, while due diligence requirements will be relaxed for lower-risk trusts.
Two amendments aimed at reducing “burdensome” compliance obligations are currently before parliament, which McKee says will deliver “practical relief for businesses by the end of the year”.
A cap of NZD 5,000 (USD 3,000) on the international transfer of cash will also be introduced to increase the difficulty of criminal organisations moving funds offshore.
The Financial Intelligence Unit (FIU) would gain new powers to order banks and other businesses regulated under the AML/CFT Act to “provide ongoing relevant information on persons of interest” and to order businesses to provide important contextual information on persons of interests’ financial activities.
CRYPTO CRACK DOWN
A key feature of McKee’s announcement was the confirmation that crypto ATMs will be banned in the country. She explained that the prohibition’s intention is to “make it more difficult for criminals to convert cash to high-risk assets such as cryptocurrencies”.
An August 2024 report from TRM Labs revealed that the number of crypto ATMs in New Zealand skyrocketed from zero in 2023 to 157 by the summer of 2024, pushing the country up to the ninth largest crypto ATM market globally. Coin ATM Radar data lists the current number of kiosks in the country as 221. The cash-to-crypto sector has boomed across the Asia-Pacific region, with New Zealand’s neighbour Australia witnessing a 17-fold increase in the number of machines between 2023 and 2024, ranking third globally.
A GLOBAL TREND
New Zealand’s efforts to tackle money laundering at the source mirror similar global enforcement efforts. In 2022, the UK Financial Conduct Authority (FCA) issued a warning declaring all crypto ATMs illegal unless FCA-registered and compliant with the UK Money Laundering Regulations (MLR). In March this year, the watchdog secured its first criminal conviction against an individual for operating an illegal network of crypto ATMs as part of a broader crack down on illegal crypto operations across the country.
In 2022, the Monetary Authority of Singapore (MAS) issued guidelines banning digital asset companies from advertising in public spaces, leading to all crypto ATMs being shut down across the city-state. Other countries, such as China, Algeria, Bangladesh and Nepal, have gone a step further and banned cryptocurrency transactions outright.
The US has taken a different approach, with several states – including Nebraska, Arizona, Vermont and Oklahoma, among others – rolling out strict laws regulating crypto ATMs, as opposed to an outright ban. The city of Spokane in Washington, however, has aligned more closely with global trends, voting to ban all cryptocurrency kiosks in the city after USD 141 million was recorded to have been lost in scams in the state in 2023.
PAC warns of lack of clarity over how much tax is paid or avoided by the very wealthy, as report highlights significant opportunities to collect more revenue. Public Accounts CommitteeHM Revenue &
On 27 January 2025, the law deriving from draft Bill No. 7961 (“Law“) introducing significant changes to the laws governing the Register of Beneficial Owners (Registre des Bénéficiaires Effectifs
As published on: thepaypers.com, Friday 22 November, 2024. The UK Foreign Office has declared that the government is firmly supporting the establishment of fully public registers. The remarks follow
Singapore said it was expecting more arrests and seizures as the Asian financial hub investigates one of its biggest cases of suspected money laundering, in which the value of assets seized now stands