Venkat Raman
Cash payments are likely to be capped in the sale and purchase of cars, motorcycles, jewellery and art as the New Zealand government moves to tighten its Anti-Money Laundering (AML) Legislation.
The Cabinet is yet to approve the Legislation but a Department of Internal Affairs (DIA) notification issued on Monday, March 11, 2019 said that the new Statute will come into effect from August 1, 2019.
The thresholds
It is understood that the Justice Ministry has determined the cash thresholds as $5000, $10,000 and $15,000 depending on the items traded and that the decision followed a consultation process.
The Statute also puts in place a rigid compliance regime with the onus on both buyers and sellers dealing in cash.
Mike Stone, Director, AML Group (Regulatory Services) at DIA said that while compliance procedures are in place for various sectors, the new Legislation would be different in that it would oblige all buyers and sellers to follow the provisions of the Anti-Money Laundering and Countering Financing of Terrorism (CFT) Act.
Strict compliance
“High value dealers must (a) verify the identities of customers when they receive cash in single transactions, or a series of related transactions, equal to or above the cash threshold (b) report prescribed transactions equal to or above the cash threshold and (c) keep records and undertake an audit if requested,” he said.
Mr Stone said that criminals often target high value dealers and purchase goods with the proceeds of their crimes.
“Including high value dealers in the AML legislation will make a difference and help prevent money laundering in New Zealand. High value dealers may also report any suspicious activities that appear to be linked to money laundering or terrorism financing,” he said.
Consultants not endorsed
Mr Stone said that DIA does not endorse private sector AML services, consultancies or technologies.
“We are aware of some technology service providers claiming that we endorse or approve their technology platforms. This is not true. Please be mindful of selecting products and services that claim that they are ‘DIA Approved’ or ‘DIA Endorsed.’ AML/CFT measures aim to disrupt and deter financial crime, increase confidence in the New Zealand financial sector and meet international standards for combating money laundering, terrorism financing and other related threats to the safety of our communities,” he said.
Mr Stone said that at least $1.35 billion is laundered every year in New Zealand.
“But the true cost and the social harm that is caused is much higher,” he said.
If you have any case to report, please call 0800-257887 or email amlcft@dia.govt.nz
Real Estate Agents covered
As reported in our January 1, 2019 issue, Real Estate Agents in New Zealand must comply with the provisions of Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) Act and follow a more stringent regime of code of conduct and discipline.
The AML/CFT (Definitions) Amendment Regulations 2018 came into force on January 1, 2019, which, among other things, provide definition of a customer (client) and the timing of customer due diligence.
Additional Reading: New effort to stop rinsing cash laudable under Viewlink
