New anti-money laundering rules will have ‘significant impact’ on would-be launderers, says PM
New anti-money laundering rules will have a “significant impact” on people using the property industry to launder money, Prime Minister Bill English says.
Mr English’s comments come after the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill was introduced to Parliament this week.
The bill, introduced by Justice Minister Amy Adams, aims to tackle money laundering and terrorist financing. It will “bolster New Zealand’s existing anti-money laundering laws, which help protect businesses and make it harder for criminals to profit from and fund illegal activities,” Ms Adams says.
The amendment bill extends the act to lawyers, conveyancers, accountants, real estate agents and sports and racing betting.
Businesses that deal in certain high-value goods, including motor vehicles, jewellery and art, will also have obligations under the act when they accept or make large cash transactions.
The rules will mean businesses that accept a cash payment of $15,000 or more will be required to conduct a lot more due diligence on their clients.
Asked if he’s comfortable with the extra burden this will put on these sectors, Mr English says “it’s inherent in having a strong regime around anti-money laundering.”
“If there are people using the property industry as a way of laundering money, then this legislation will have quite a significant impact on that,” he says.
This is the second phase of the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT), which was fast-tracked last year.
When the draft bill was unveiled in December, concerns were raised over the compliance costs for business.
Ms Adams said at the time the policy had been fully costed by EY, which shows the reforms may impose up to $1.6 billion in compliance costs over the next decade.
But EMA chief executive Kim Campbell thinks that figure may be too high and says the costs can be handled more efficiently.
He says it’s likely to disproportionately impact smaller firms.
“Given New Zealand has such a large percentage of small businesses, regulatory impact has a much larger deadweight than other countries where more businesses are a lot bigger.”
But Ms Adams says the government has been working with affected sectors to help them understand the changes.
“This has significantly reduced the predicted compliance costs – the initial estimate of up to $1.6 billion over 10 years has been lowered to between $800 million and $1.1 billion,” she says.
Mr English says it’s about trying to get the balance of a robust regime that does not make it too much more expensive to buy and sell a house or a business.