In 2024, New Zealand introduced the Anti-Money Laundering & Countering Financing of Terrorism Amendment Bill as part of a broader package of regulatory reforms administered by the Ministry of Justice. This Bill responds to key recommendations from the Financial Action Task Force (FATF) mutual evaluation conducted between 2019 and 2021, as well as a comprehensive statutory review of the AML/CFT Act completed in 2022. Its purpose is to modernise the legislative framework to ensure that New Zealand’s anti-money laundering and counter-terrorism financing regime remains effective, risk-based, and internationally aligned.

Improving Clarity & Efficiency

The Amendment Bill seeks to improve clarity across the AML/CFT regime by refining key legal definitions and compliance requirements. For example, the definition of “beneficial owner” has been expanded to include individuals with ultimate ownership or control, while excluding unnecessary duplications such as customers of customers. Updates to the categorisation of designated non-financial businesses and trust and company service providers provide greater interpretive certainty for regulated entities. These revisions are intended to reduce ambiguity and help businesses apply their obligations with greater confidence.

Reinforcing Customer Due Diligence

A major focus of the Bill is enhancing the application of customer due diligence (CDD). The updated provisions clarify when standard, simplified, or enhanced CDD measures must be used, particularly in the case of occasional transactions and politically exposed persons (PEPs). Exemptions from certain verification requirements are now permitted when a reporting entity can demonstrate that risks have been adequately mitigated through other due diligence procedures. These changes support a more proportional, risk-based approach without compromising the integrity of controls.

Extending Scope to Stored Value Instruments

The Bill expands the regulatory perimeter by introducing requirements for stored value instruments, including vouchers, casino chips, precious metals, and other non-currency items that can be redeemed for cash. These instruments are now subject to cross-border reporting obligations akin to those already applied to large movements of physical cash. This reform closes a notable gap in the AML/CFT framework and brings New Zealand into closer alignment with international best practices on the control of portable high-value assets.

Modernising Enforcement Mechanisms

Enforcement tools have been strengthened through the replacement of formal warnings with a new category of “censures,” and by expanding the definition of civil liability acts to include failures in risk assessment, annual reporting, and record-keeping. The courts are also now required to prioritise cost recovery for AML/CFT supervisors when imposing pecuniary penalties. These updates enhance the deterrent effect of supervisory actions and provide regulators with more agile enforcement options.

Aligning with Global Standards

Ultimately, the Amendment Bill reflects New Zealand’s commitment to meeting evolving FATF standards and maintaining robust financial crime controls. The reforms are particularly relevant to jurisdictions implementing the FATF Travel Rule, as they reinforce transparency in beneficial ownership, strengthen transaction monitoring obligations, and promote coordinated international cooperation. This positions New Zealand’s AML/CFT regime as a credible and adaptable system in the global fight against illicit financial flows.