New Zealand Offers Grace Period for New Anti-Money Laundering Laws

Due to IT complications, banks and financial institutions in New Zealand have been allowed a grace period to conform to new regulations made in order to fight money laundering and terrorist funding.

The Anti-Money Laundering (AML) and Countering Financing of Terrorism Act (CFT) has created the new Prescribed Transactions Reporting (PTR) regulations that went into effect on November 1.  The act requires all banks to report any cash transactions of $10,000 or more and international transactions of $1,000 coming in and/or out of New Zealand to the police’s Financial Intelligence Unit (FIU).

The reports submitted to the police will include identification information such as names, addresses, account numbers, and phone numbers which is causing a fear of privacy erosion.  Many believe it is going against their privacy because information is obtained without a warrant.  With this in mind, information will be handled delicately in order to maintain personal rights and still monitor compliance.

With the difficulty of ensuring all automated banking systems report any transactions that go over the new threshold, the Ministry of Justice has allowed a “transition period” for banks and financial institutions and has extended the deadline for compliance with the new AML laws to July 1, 2018.

Chief executive of the New Zealand Bankers’ Association expressed that “The banking industry fully supports the aims of the AML/CFT regime, including the need to report transactions over certain thresholds.  We also take compliance with legal requirements very seriously”.

Any bank not upholding these standards will be found in violation of the new act.  The Ministry of Justice stated that “Reporting entities submitting automated reports will be expected to provide PTR’s as soon as they are able from November 2017.  However, reporting entities will not be considered non-compliant prior to the end of the transitional compliance period [July 1, 2018].”

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