The Associate Minister of Justice, Minister McKee, proposed a series of changes to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act) as part of the Government’s overhaul of the AML/CFT regime. Importantly, the announcements include details of the new Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy and Other Matters) Amendment Bill and Anti-Money Laundering and Countering Financing of Terrorism (Omnibus) Amendment Bill. 

The changes were announced over four press releases as described below. More broadly, the changes are part of four bills that will make significant changes to the AML/CFT regime in the near future.

Who needs to read it? Why?

All reporting entities should be aware of these upcoming changes as they will impact the core operations of the regime, particularly with the intended introduction of the new financial sanctions’ supervisory regime and levy. 

The changes also target specific reporting entities that are banks and designated non-financial businesses or professions such as banks, real estate agents, or accountants who interact with family trusts.

You can read more about the Government’s rationale behind some of the changes in our previous alert here. 

What does it cover?

The press releases, each of which are discussed below, reflect Cabinet decisions proposing changes to be given effect as part of the four bills that will make significant changes to the AML/CFT regime: 

1. Statutes Amendment Bill: This Bill is currently before Parliament awaiting its second reading and is expected to be enacted by the end of 2025, discussed in our previous alert.

2. Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill: This bill is currently before Parliament awaiting the Select Committee report, due 13 August 2025. It is expected to be enacted by the end of 2025, discussed in our previous alert.

3. Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy and Other Matters) Amendment Bill: This Bill has not yet been introduced to Parliament but is expected to be enacted by mid-2026, discussed in our previous alert. This is the second phase of the Government’s AML/CFT regulatory reform programme. 

4. Anti-Money Laundering and Countering Financing of Terrorism (Omnibus) Amendment Bill: This is the third and final phase of the Government’s AML/CFT regulatory reform programme. This Bill is expected to be introduced into Parliament in mid-2026. The timing for passage into law is as yet unknown but is likely to run after the next election, expected in late 2026. While the content of this Bill is not yet public, we expect that in part, it will action the recommendations in the Report tabled in Parliament in November 2022 on the AML/CFT Statutory Review. See our previous alert.

We address each of the Minister’s press releases as follows, though each of them is less than clear which of the Bills above by which the specific proposals will be given effect. In most cases, that is able to be deduced from a careful reading of the Bills currently before Parliament and assumptions about those that are not.

In the first and the second press releases, Minister McKee noted that the Government has directed the Department of Internal Affairs, the future AML/CFT supervisor of all reporting entities, to issue clear guidance to ensure reporting entities can apply simplified checks without fear of penalty. 

Cutting red tape so young Kiwis can start saving: Making it easier for parents to open bank accounts for their children

In the first set of changes announced on Monday, 7 July, the Minister says banks will be able to apply simplified processes to verify a child’s identity to open a bank account. The bank account must have sufficient measures to ensure that the account is low risk, for example, by setting appropriate transaction amounts. Under this change, banks may only need a birth certificate to confirm a child’s identity and relationship to the parent opening the child’s bank account.  

Although the press release does not specify which Bill these changes will be part of, our reading is that this is a reference to the changes under the Statutes Amendment Bill which mean that address verification is not required for standard level customer due diligence and only required for enhanced customer due diligence according to the level of risk involved.

Simplifying requirements around family trusts: Simplified CDD for low-risk property sales involving family trusts

The second set of changes announced on Tuesday, 8 July proposes to enable simplified customer due diligence (CDD) for low-risk property sales involving family trusts. Under the reform, real estate agents can apply simplified CDD to sell a house held by a trust if “the sale is clearly low risk”. This could mean that real estate agents would only need to confirm the property’s ownership and trustee details match what is on the certificate of title, verifying the identity documents of trustees, and retaining a copy of the trust deed.

Again, the release did not clearly state which Bill is being referred to but we read this as being a reference to the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill currently before Parliament.

Targeting criminals, not Kiwi businesses: Increased efforts to combat serious financial crime

The third set of changes announced on Wednesday, 9 July proposes to give the police and regulators increased enforcement powers to target financial crime. At the same time, a new financial sanctions supervisory regime will be established and engagement on a sustainable levy to fund AML/CFT system improvements will be initiated. The Government will commence targeted consultation with industry and stakeholders to inform the new national strategy and levy framework. 

Proposed measures include capping international cash transfers at NZ$5,000 to limit criminal fund movement, banning crypto ATMs to reduce conversion of illicit cash into high-risk assets, and empowering the Financial Intelligence Unit to request ongoing information from banks and businesses, and collect contextual financial data on persons of interest. 

Our reading of the press release is these changes are likely to be given effect via the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy and Other Matters) Amendment Bill which has not yet been introduced into Parliament (but which we expect before the end of 2025), but it is also possible some content may be deferred to be covered in the omnibus Bill to be introduced next year. We will be able to confirm that once the Bill has been published.

Red tape relief making a difference for businesses: Approval of Anti-Money Laundering and Countering Financing of Terrorism (Omnibus) Amendment Bill

The fourth press release announced on Thursday, 10 July contains the most significant of the Cabinet decisions, which was approval to draft a new Anti-Money Laundering and Countering Financing of Terrorism (Omnibus) Amendment Bill to overhaul the existing AML/CFT system. Minister McKee highlighted that the reforms are about “common sense” and “targeting criminals, not clogging up legitimate businesses and everyday people with red tape”. 

The key changes that will be in the Bill are summarised by the Government here. They include changes to:

• Enable a risk-based and common-sense approach to CDD.

• Enabling a designated business group (DBG) to automatically form for eligible businesses and make the ability to form these groups available to a wider range of businesses.

• Provide the Financial Intelligence Unit with additional powers to detect and deter suspicious activity.

• Modernise the current offences and penalties in the AML/CFT Act and ensure law enforcement has the necessary tools to deter organised crime.

• Support the implementation of targeted financial sanctions.

• Implement minor amendments to support the functioning of the AML/CFT system.

In addition, Cabinet has agreed in principle to give effect to the recommendations by the Ministerial Advisory Group on Transnational, Serious and Organised Crime in its April 2025 report that will make it harder for criminals to exploit cash payments. This includes:

• prohibiting businesses from accepting cash payments of over $5,000 for international funds transfer services; and

• banning crypto/virtual currency ATMs.

Our view

We welcome those changes which aim to alleviate the burden of customer due diligence for businesses conducting or facilitating low-risk activities. We generally support this as it aims to ensure AML/CFT compliance is proportionate to actual risk, as balanced by the increased enforcement powers that will be given to the police and regulators. Changes like simplifying CDD for low-risk transactions, simplifying identity verification processes and automating DBG processes for some businesses will ensure that the AML/CFT regime reflects the realities of New Zealand society and businesses.  

However, as recognised by the Government, clear guidance is required from the DIA to ensure reporting entities are operating within the bounds of the reforms. With a wide range of important reforms, it is important that the DIA provides comprehensive guidance as far in advance as possible, allowing reporting entities to understand the implications for their business. Timelines for implementation should also be clearly communicated so that the changes can be factored into businesses’ long-term business model. 

There are also other proposed changes which may increase the regulatory burden, for example the proposals to increase regulatory powers.

In particular, in this category, while we understand the concern that virtual currency ATMs may pose risks, we have not seen the evidence for that and in any event do not think an outright ban is appropriate. We are concerned that a blanket ban could discourage the use and availability of virtual currency in New Zealand, at a time when other OECD economies are actively embracing these new technologies. 

We also still await further details on the financial sanctions’ supervisory regime and particularly the levy, as a reporting entities will be eager to understand how this will affect their own funding considerations. We encourage all stakeholders to participate in consultation with the government to ensure that the new funding model is fairly implemented. 

We will be very interested to see the drafts of both the new Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy and Other Matters) Amendment Bill and Anti-Money Laundering and Countering Financing of Terrorism (Omnibus) Amendment Bill to better understand the proposed changes. 

What next?

If you have any questions in relation to the upcoming AML/CFT changes and how they might affect your business, please contact one of our experts. 

This article was co-authored by Leanne Chew, Solicitor and Darlene Hu, Law Clerk from our Financial Services team.