New anti-money laundering code sets standard for customer ID checks
Customers of financial institutions and casinos can expect more stringent identity checks in the lead up to 30 June 2013, when anti-money laundering legislation comes fully into force. Businesses now have access to guidance on the standard those identity checks should meet.
The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 places obligations on New Zealand's financial institutions and casinos to detect and deter money laundering and terrorism financing.
An Identity Verification Code of Practice being Gazetted today applies to all reporting entities being supervised by the Reserve Bank, the Financial Markets Authority and the Department of Internal Affairs.
The code sets out an acceptable practice for verifying the name and date of birth of customers (people, not corporations) whom the reporting entities have assessed as low to medium risk. The code details acceptable forms of identification, and outlines when secondary or supporting identification is required – for example, a passport on its own, or a New Zealand Driver Licence with an Eftpos card.
Although the code is not mandatory, it constitutes a ‘safe harbour' – a reporting entity that fully complies with the code is deemed to be compliant with the relevant parts of the legislation. If a reporting entity decides to opt out of the code, it must adopt practices that are equally effective, otherwise it risks non-compliance.
Reserve Bank of New Zealand: Sonia Speedy 04 471 3846 or 021 663 082
Department of Internal Affairs: Trevor Henry 04 495 7211 or 0275 843 679
Financial Markets Authority: Nick Stride 09 985 4868 or 021 739 052
The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT) will come fully into force on 30 June 2013 under a commencement order Gazetted on 30 June 2011. Reporting entities now have less than two years to establish and implement their AML/CFT programme and comply fully with their obligations under the Act.
Money laundering is how criminals disguise the illegal origins of their money. Financers of terrorism use similar techniques to money launderers to avoid detection by authorities and to protect the identity of those providing and receiving the funds.
The AML/CFT Act requires reporting entities to obtain identity information about their customers and verify that information.
The Reserve Bank of New Zealand supervises banks, life insurers, and non-bank deposit takers.
The Financial Markets Authority supervises issuers of securities, trustee companies, futures dealers, collective investment schemes, brokers, and financial advisers.
The Department of Internal Affairs supervises casinos, non-deposit taking lenders, money changers, and any other financial institutions not supervised by The Reserve Bank or The Financial Markets Authority.
Examples of financial activities include (but are not limited to):
- accepting deposits or other repayable funds from the public
- making a loan to or for a customer
- issuing a debit or credit card
- managing the means of payment
- supplying goods through a finance lease (other than for consumer products)
- providing remittance services which transfer money or property
- issuing or accepting liability under life insurance policies
- issuing or selling securities and derivatives
- safekeeping or administering cash or liquid securities on behalf of other persons
- exchanging foreign currency.