What is AML/CFT Act 2009?

The AML/CFT Act 2009 imposes customer-due-diligence, transaction-monitoring, and suspicious-activity-reporting obligations on every entity providing a "captured" financial service in New Zealand. Unlike the FMCA's Schedule 1 carve-out for wholesale offers, AML/CFT applies uniformly — wholesale and retail entities face the same obligations.

Three supervisors share enforcement: - FMA — for FMCA-licensed entities (MIS managers, DIMS providers, financial advice providers, derivatives issuers). - RBNZ — for banks, life insurers, non-bank deposit takers, and money-changers. - DIA — for the residual category (casinos, trust and company service providers, money-remitters, accountants providing AML-captured services).

Standard customer due diligence (CDD) on new investors: - Identity verification — passport, drivers licence, or equivalent. - Address verification — utility bill, bank statement. - Source of funds — written explanation supported by evidence (bank statements, business sale agreements, employment income). - Beneficial-ownership identification for trusts and companies — anyone with 25%+ ownership or control. - Politically Exposed Person (PEP) screening — domestic and foreign PEPs subject to enhanced due diligence. - Sanctions screening — against the United Nations Security Council Sanctions List and NZ-domestic designations.

Enhanced due diligence (EDD) is required when the customer or transaction presents higher risk — non-resident customers, complex trust structures, high-value transactions, source-of-funds difficulty.

Record-keeping — all CDD documentation and transaction records must be retained for at least 5 years after the customer relationship ends.

Suspicious Activity Reports (SARs) must be filed with the Financial Intelligence Unit at NZ Police within 3 working days of formation of suspicion. Tipping off the customer about a SAR is a criminal offence.

Penalties: civil penalties up to NZ$2M for body corporates and NZ$200K for individuals per breach. Criminal penalties for serious breaches include imprisonment.

Practical implications for wholesale investors: every wholesale subscription triggers a fresh round of CDD — typically 2-4 weeks of paperwork from offer-acceptance to fund-settlement. AIP visa applicants face additional source-of-funds scrutiny because INZ separately requires AML-grade documentation for the visa application.