Regulations and codes of practice for the AML/CFT Act released for consultation

A consultation document containing proposals for regulations required to complete the shape of the new Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime has been released. The document also contains proposals for codes of practice related to customer due diligence (CDD), which are central to the regime.

The proposals should clarify the extent of responsibilities for reporting entities to enable business planning to commence. The document includes proposals for the following:

• commencement timeframes;

• exemptions to clarify the application of the AML/CFT Act to entities, transactions, products and services, and the extent of obligations that apply;

• applicable thresholds;

• CDD, including the basis for verification, entities to whom simplified due diligence may be applied, and identity requirements for enhanced due diligence;

• the way in which third party relationships will be managed in specific circumstances;

• eligibility for designated business groups, and the process of electing to join such a group;

• factors which must be taken into account in risk assessments;

• annual reporting requirements; and

• prescribed forms.

Submissions have been invited on all aspects of the proposals, and in particular on whether they are technically accurate and adequately address industry concerns. The closing date for submissions is 6 September 2010.

It is anticipated that final decisions on regulations will be made and communicated in late September, with regulations likely to be gazetted in December.

For more information, click here to visit the Ministry of Justice website.

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