Businesses To Benefit From AML Regulation Changes
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The New Zealand Government is set to reform the country's Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) system, aiming to reduce the regulatory burden on businesses. Associate Justice Minister Nicole McKee announced that these changes would streamline processes while ensuring regulations remain effective for businesses, law enforcement, and the public.
“Cabinet has approved an AML/CFT reform work programme which will ensure streamlined, workable, and effective regulations for businesses, law enforcement, and everyday New Zealanders,” Mrs McKee stated.
These reforms align with a key government priority: reducing red tape and improving regulatory quality. McKee's goal is to offer regulatory relief while empowering law enforcement to tackle organised crime and safeguarding New Zealand's international reputation.
The current AML/CFT framework is designed to detect, deter, and combat serious financial crimes, including money laundering and terrorism financing. However, many businesses have found the existing system cumbersome and overly cautious, leading to repetitive and complicated processes.
“I have heard from countless New Zealanders that the current regulations are unnecessarily risk-averse, resulting in complicated, repetitive processes. Simple tasks shouldn’t be made confusing and difficult to complete,” McKee said, highlighting the need for reform.
She also pointed out New Zealand's responsibility to meet international standards set by the Financial Action Task Force. "Complying with these standards is important to protect our economy and our international reputation,” she explained.
The reform will take a pragmatic, phased approach. The first phase, already in progress, includes two bills, one of which— the Statutes Amendment Bill—has been introduced to Parliament. This phase promises immediate regulatory relief.
The second phase will focus on making structural changes and developing a sustainable funding model to improve the overall efficiency of the system. The final phase will bring further regulatory adjustments to align with international standards and introduce a more risk-based approach to compliance.
According to McKee, current AML regulations disproportionately affect small businesses. “Too many rules are created in Wellington by people who don’t have a proper understanding of the impact they have. AML regulations are hurting small businesses who don’t have dedicated compliance teams.”
The reforms are part of the ACT Party’s promise to make compliance simpler and more user-friendly for small businesses, reducing unnecessary burdens while still addressing the harms of money laundering.