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FAQs: The Government’s Review of the Anti-Money Laundering and Countering the Financing of Terrorism Act (AML/CFT)

What is money laundering?It’s the process criminals use to “clean” the money they make from crimes such as fraud and dealing in illegal drugs.

By making the money look like it comes from a legitimate source, they can cover their tracks and avoid detection. Criminal organisations and people who finance terrorism target businesses and countries they believe have weak systems and controls that they can exploit.

Every time someone buys a house or a car, or moves money around to different banks, or sends it back home, or gives money to a relative there is an opportunity to launder illegal money.

What is terrorism financing?A small number of people support terrorism by providing funds or resources to terrorists. This can include people who want to commit a terrorist attack or support a terrorist organisation and set money aside for the purpose.

Terrorism financing is a crime, and terrorist financiers often use a mixture of money gained from legitimate sources (e.g. wages or donations) as well as illicit funds. As a result, terrorist financiers will use similar techniques to money launderers to cover their tracks and avoid detection. While the likelihood of terrorism financing in New Zealand is lower, the potential consequences can be severe. And New Zealanders can unwittingly be exploited by terrorists.

What is the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT)?The Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009 helps to keep New Zealand safe from money laundering and terrorism financing. By making it harder for criminals to

launder money or finance terrorism, we also make profit-motivated crime, like selling drugs or defrauding people, less appealing and help protect New Zealand from terrorism.

Is it important?Money laundering affects all of us. It is happening every day across the country. It’s estimated that over $1 billion a year comes from drug dealing and fraud and can be laundered through New Zealand businesses.

The true cost and impact is many times that figure when you consider crimes that generate “dirty” money and their ripple effect. People who finance terrorism also use these methods to send money to violent causes and to disguise who is providing and receiving the money.

Why is the Government reviewing it?We’ve had anti-money laundering laws for eight years to fight crimes which could damage our financial system.

The Minister of Justice, the Hon Kris Faafoi, commenced a review of the AML/CFT Act on 1 July 2021. This review presents an opportunity to look back on the past eight years and ask ourselves:

• Have we got this right?

• Does the regime effectively achieve its purposes in the most cost-efficient way?

• What can we do better?

• What can we do without?

The review is being led by the Ministry of Justice. It is being supported by other government agencies which have responsibilities for the AML/CFT laws. They are:

• the Department of Internal Affairs,

• Financial Markets Authority,

• New Zealand Customs Service,

• New Zealand Police, and

• The Reserve Bank of New Zealand.

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How does anti-money laundering and stopping the financing of terrorism affect me?All New Zealanders are affected. There are many ways that money laundering and terrorism financing can happen. Every house, car, or boat purchase could potentially involve money being laundered; as could every domestic or international transaction. Professions and organisations are affected too. So, if you work in a bank or a casino, or are a lawyer, real estate agent, accountant or a car salesman you will be affected.

Why should I care?New Zealanders are proud that we live in one of the least corrupt countries in the world. We want to make New Zealand the most difficult place for organised criminal groups to operate, and we do not want criminals ruining our financial system and economy or lowering our reputation around the world with countries we trade with.

Money laundering fuels the criminal economy. It’s the financial system for the illegal drug market which leads to further crime.

We want a country safe from terrorists. We are all in this together to fight money launderers, and terrorists.

What do you want to know?We want to make sure that the what the Act is trying to do is still relevant to New Zealand and ask questions about the purpose and goals of the Act.

The Act currently has three goals:

• putting off others from laundering money and financing terrorism and spotting it when it happens,

• complying with our international obligations, and

• making sure the public is confident about our businesses operating lawfully.

While the Act aims to keep New Zealand safe, sometimes it can make it difficult for people going about their daily lives. For instance, we know that the Act has made it harder for some people to open bank accounts. This can make it hard for people to take part in society and can also make it hard for people to send money overseas for valid reasons.

We want to understand how the Act may be causing challenges for people and businesses. We want to hear if it has become harder for everyday New Zealanders to open or maintain bank accounts, or harder or more expensive to send money to family and friends

overseas. We also want to hear whether people have had any challenges or frustrations because they do not have easy access to documents that prove who they are, or where they live.

How long is this review going to take?The review will finish by 30 June 2022, with the Ministry providing a report to the Minister of Justice about how the Act has performed and whether anything should change. From there, the report will be made public.

In many ways, we see the review as the start of a possible reform process, and the beginning of a conversation about how we can do things better. While we might recommend that things change, it will likely take at least two to three years for any legislative changes to be made. We might be able to make some changes at an earlier stage by using regulations or “secondary legislation”.

How and when can I engage?A lengthy public consultation document has been released which sets out all the issues and potential areas for change that the Ministry has identified. We have also published a shorter document which summarises the key points we are engaging on. These documents can be downloaded from the Ministry’s website here: www.justice.govt.nz/amlcft-review

You can share your views by filling out an online form or sending in an electronic or paper submission to the review team. You can an answer as many or as few questions as you like.

Once submissions close, we will conduct further engagement with the private sector and communities from February to April 2022 to help form recommendations.

How much time do I have to give feedback?We need to hear from you by 3 December 2021.

I have a question who do I talk to?

Email us at: aml@justice.govt.nz

KEEP OURMONEY CLEANkia mā ā tātau moni

Logo

KEEP OURMONEY CLEANkia mā ā tātau moni

This logo is an evolution from the previous iteration.We believe this logo is more ownable because it has levels of meaning in each element that creates its shape vs the previous version. It combines a koru which is representative of New Zealand, a money texture from New Zealand currency, money iconography and the shape of a coin.

What we have refined in this version is we have created more negative space and a thinner weighting of line in the money icon itself. The money texture also has more clear space, so it’s less condensed. That has helped the Koru to stand out better.

KEEP OURMONEY CLEANkia mā ā tātau moni

KEEP OURMONEY CLEANkia mā ā tātau moni

Koru Texture from New Zealand currency

Money icon Shape of a coin

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Final logo