Regulation Name:

– Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill
– Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill
Date Of Issue: May 2026
Region: New Zealand
Agency: NZ Parliament (House of Representatives)

New Zealand Overhauls AML/CFT Framework Through Dual Amendment Bills: What AML Compliance Leaders Must Know

New Zealand is undertaking one of the most comprehensive reforms of its anti-money laundering and counter-terrorism financing (AML/CFT) regime since the enactment of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. Through two major legislative reforms — the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 2024 and the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill 2025 — the country is restructuring supervision, expanding compliance obligations, strengthening enforcement powers, modernizing reporting frameworks, and aligning more closely with evolving FATF expectations.

Together, these reforms fundamentally reshape how reporting entities, supervisors, financial intelligence authorities, and regulated sectors operate within New Zealand’s AML ecosystem.

For AML compliance leaders, financial institutions, DNFBPs, fintechs, crypto businesses, compliance officers, and regulatory technology providers, the reforms represent a major operational and strategic shift.

A Structural Transformation of New Zealand’s AML/CFT Regime

The legislative package introduces reforms across five broad areas:

• Expansion and clarification of AML/CFT obligations

• Consolidation of AML supervision into a single authority

• Creation of a national AML/CFT strategy and regulatory work programme

• Introduction of flexible rule-making and exemption powers

• Stronger enforcement, inspection, and cross-border controls

The reforms collectively modernize New Zealand’s AML/CFT regime to address emerging risks, FATF expectations, supervisory fragmentation, and operational inefficiencies.

Part I: Key Reforms Under the AML/CFT Amendment Bill 2024

The Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill 2024 introduces major amendments to customer due diligence (CDD), beneficial ownership, reporting obligations, cross-border transportation controls, and enforcement mechanisms.

Expanded Definition of Beneficial Owner

One of the most significant changes is the replacement of the definition of “beneficial owner.”

The amended definition now includes individuals who:

• Exercise effective control over a customer or person

• Own a prescribed ownership threshold

• Hold ultimate ownership or control directly or indirectly

• Conduct transactions through intermediary customers on behalf of another individual

This broadens beneficial ownership obligations beyond direct ownership structures and reinforces risk-based identification of ultimate controllers.

For reporting entities, this means:

• More extensive ownership mapping

• Enhanced tracing of indirect control structures

• Greater scrutiny of layered entities and nominee arrangements

• Expanded obligations for corporate transparency investigations

This amendment aligns more closely with FATF expectations on identifying natural persons exercising ultimate control.

Expanded Scope of Reporting Entity Activities

The legislation clarifies that reporting entities carrying out activities associated with another category of reporting entity are also treated as undertaking those regulated activities.

This closes regulatory gaps where businesses conduct ancillary regulated services outside their primary classification.

For example:

• A financial institution conducting trust and company service activities

• A DNFBP conducting financial intermediary activities

• Hybrid fintech entities operating across multiple service categories

The amendment significantly increases regulatory coverage across overlapping business models.

Updates to Customer Due Diligence Requirements

Several amendments standardize language by replacing references to “customer” with “person” across standard, simplified, and enhanced customer due diligence provisions.

This broadens the practical application of due diligence obligations.

Enhanced Due Diligence Relief for Certain Trusts

The amendment introduces flexibility where:

• A trust falls within enhanced due diligence categories

• The reporting entity believes risks are mitigated through standard and enhanced checks already performed

In such cases, duplicate verification obligations may not apply.

This reflects a more risk-based approach while preserving supervisory discretion.

Politically Exposed Person (PEP) Reforms

PEP obligations are strengthened through:

• Explicit risk-based expectations

• Continuous applicability during ongoing relationships

• Clarification of obligations for newly established business relationships

Reporting entities must now take “reasonable steps according to the level of risk involved.”

This creates:

• Greater expectation of documented risk assessments

• Dynamic PEP monitoring obligations

• Enhanced supervisory scrutiny of PEP frameworks

Mandatory International Wire Transfer Information

A new prohibition prevents ordering institutions from initiating international wire transfers lacking mandatory originator information.

This creates stricter compliance obligations around:

• Payment messaging standards

• Transaction screening systems

• Data completeness verification

• Intermediary payment monitoring

Institutions with cross-border payment operations will likely require:

• Enhanced SWIFT controls

• Automated validation mechanisms

• Improved payment filtering logic

New Urgent Record Production Requirements

Reporting entities must now produce requested records:

• By specified dates considered reasonable by supervisors, or

• Within 20 working days if no date is specified

In urgent cases, records may need to be produced “as soon as possible.”

This substantially strengthens supervisory responsiveness expectations.

Compliance teams should review:

• Document retrieval capabilities

• Regulatory response protocols

• Internal escalation mechanisms

• Data governance infrastructure

Strengthened AML/CFT Programme Governance

The reforms require AML/CFT compliance officers to:

• Be individuals rather than generic entities

• Be senior managers or hold sufficient authority

This elevates governance accountability and reinforces executive-level compliance responsibility.

Mandatory Integration of National Risk Assessments

Risk assessments must now incorporate:

• Risks identified under sections 131 and 142

• National intelligence outputs

• Regulatory risk assessments

This creates stronger integration between:

• Institutional risk assessments

• Supervisory intelligence

• National AML/CFT priorities

Stored Value Instruments Become a Major AML/CFT Focus

One of the most transformative changes is the introduction of “stored value instruments” into cross-border AML/CFT controls.

What Counts as a Stored Value Instrument?

The definition includes:

• Portable devices representing monetary value

• Vouchers

• Casino chips

• Gold

• Silver

• Precious metals

• Precious stones

Debit and credit cards are excluded.

This significantly expands the scope of reportable value movement beyond physical cash.

Expanded Cross-Border Reporting Obligations

Reporting obligations now apply to:

• Accompanied stored value instruments

• Unaccompanied stored value instruments

• Incoming and outgoing transfers

• Cross-border transportation attempts

A person is deemed to have moved value out of New Zealand if they:

• Enter a customs-controlled area intending to depart

• Carry undeclared cash or stored value instruments

This expands enforcement authority substantially.

New 72-Hour Reporting Rules

Unaccompanied cash or stored value instrument movements must be reported:

• At least 72 hours before arrival

• At least 72 hours before departure

• Prior to receipt in New Zealand

This materially increases compliance obligations for:

• Logistics firms

• Dealers in precious metals and stones

• Cash transport businesses

• Cross-border value transfer providers

Expanded Civil Liability and Enforcement Powers

The amendment broadens civil liability exposure to include failures involving:

• Activity reporting

• Risk assessments

• AML programme reviews

• Annual reporting obligations

Introduction of Formal Censure Regime

AML/CFT supervisors gain authority to issue formal censures where civil liability conduct occurs.

The process includes:

• Advance written notice

• Opportunity for written submissions

• Formal written censure

• District Court appeal rights

This introduces a new reputational enforcement mechanism similar to modern financial conduct regimes globally.

Court-Ordered Cost Recovery

Courts must now order pecuniary penalties to first reimburse supervisory costs incurred during enforcement proceedings.

This increases the financial consequences of non-compliance significantly.

Part II: AML/CFT (Supervisor, Levy, and Other Matters) Amendment Bill 2025

The 2025 reform bill fundamentally restructures New Zealand’s AML/CFT governance and supervisory architecture.

Transition to a Single AML/CFT Supervisor

Perhaps the most important structural reform is the move from multiple supervisors to a single AML/CFT supervisor model.

Historically:

• DIA

• Reserve Bank of New Zealand (RBNZ)

• Financial Markets Authority (FMA)

shared supervisory responsibilities.

The new framework consolidates supervision under one public service agency authorized by the Prime Minister.

This centralization aims to:

• Improve consistency

• Reduce fragmentation

• Standardize enforcement

• Simplify regulatory coordination

The Department of Internal Affairs (DIA) effectively becomes the central AML/CFT supervisory authority.

New National AML/CFT Strategy

The legislation introduces a mandatory national AML/CFT strategy.

The strategy must:

• Direct supervisors and public agencies

• Reflect national risk assessments

• Align AML/CFT implementation with strategic priorities

The Minister must:

• Consult affected parties

• Publish the strategy

• Table it before Parliament

• Review it following FATF mutual evaluations

This creates a formalized national coordination structure for AML/CFT governance.

Regulatory Work Programme Framework

The Ministry must issue a regulatory work programme aligned with the national strategy.

The work programme will define:

• Regulatory priorities

• Supervisory activities

• Implementation approaches

• Coordination mechanisms

Annual public reporting on:

• Levy collections

• Levy usage

• Future cost projections

becomes mandatory.

This introduces significantly greater transparency into AML/CFT administration and funding.

Introduction of AML/CFT Levies

The reforms establish a formal levy regime requiring reporting entities to fund portions of AML/CFT oversight costs.

Levies may fund:

• Supervisory operations

• Ministry activities

• Commissioner functions

• National strategy implementation

• Regulatory work programmes

• Levy administration costs

The framework allows:

• Different levies for different sectors

• Multi-year cost recovery

• Recovery of levy shortfalls

• Refunds for over-recovery

This represents a major financial and operational development for regulated entities.

Massive Expansion of Rule-Making Powers

The legislation introduces extensive rule-making powers for:

• The AML/CFT supervisor

• The Commissioner

AML/CFT Supervisor Rule-Making Powers

Rules may now govern:

• Customer due diligence standards

• Verification requirements

• Simplified CDD eligibility

• Third-party reliance

• Designated business groups

• Risk assessment factors

• Audit timing

• Record-keeping

• Wire transfer traceability

• Service of compliance documents

• Technology anonymity risks

This shifts operational detail from rigid legislation into dynamic secondary legislation.

The result:

• Faster regulatory adaptation

• Greater supervisory flexibility

• More agile AML implementation

However, it also creates:

• Increased compliance monitoring obligations

• More frequent rule changes

• Higher regulatory complexity

Expanded Notice and Exemption Powers

The framework introduces extensive powers to issue notices governing:

• Reporting entity status

• Financial institution classifications

• Legal arrangements

• Occasional transactions

• Wire transfer exemptions

• Customer definitions

• Designated business group eligibility

• Product/service exemptions

• Financial activity exemptions

This creates an extremely flexible supervisory architecture capable of adapting rapidly to emerging risks.

Enhanced Suspicious Activity Reporting Scope

The definition of suspicious activity is substantially expanded.

It now includes:

• Inquiries about services

• Proposed services

• Attempted transactions

• Activities connected to serious offenses

• Activities linked to drug enforcement

• Terrorism financing

• Criminal proceeds

Persons in Trade May Submit SARs

Persons trading in articles described under section 67A may voluntarily report suspicious activities to the Commissioner.

This potentially broadens intelligence collection beyond traditional reporting entities.

Enhanced Supervisory and Investigative Powers

The AML/CFT supervisor gains expanded powers to:

• Require meetings with individuals

• Conduct remote inspections

• Demand urgent production of records

• Question individuals with suspected knowledge

• Conduct audiovisual inspections

Safeguards include:

• Right to legal representation

• Protection against self-incrimination

• Notice of rights requirements

New Dwellinghouse Inspection Powers

A major expansion allows entry into dwellinghouses where:

• Reporting entity activities occur

• Relevant AML/CFT records are likely present

Entry requires:

• Occupier consent, or

• Judicial warrant authorization

This is particularly relevant for:

• Home-based financial services

• Remote compliance operations

• Small advisory firms

• Digital asset businesses

Codes of Practice Become Secondary Legislation

Codes of practice now become formal secondary legislation.

The AML/CFT supervisor may issue codes covering:

• Entire sectors

• Specific classes of reporting entities

• Particular regulated activities

This significantly increases the legal and operational importance of supervisory guidance.

Centralization of Functions into DIA

The legislation transfers functions previously held by:

• FMA

• RBNZ

to the DIA.

This includes:

• Rights

• Liabilities

• Enforcement proceedings

• Property

• Information

• Supervisory responsibilities

The transition framework also protects employment continuity for transferred employees.

Implications for AML Compliance Leaders

These reforms collectively represent a profound modernization of New Zealand’s AML/CFT framework.

Compliance leaders should prepare for:

• More dynamic regulatory requirements

• Increased supervisory engagement

• Expanded reporting expectations

• Stronger enforcement exposure

• Greater operational accountability

• Enhanced governance obligations

• Higher compliance costs through levies

• More intensive risk assessment expectations

Strategic Impact on Reporting Entities

Financial institutions, fintechs, VASPs, DNFBPs, and multinational entities operating in New Zealand will likely need to:

• Redesign AML governance frameworks

• Upgrade customer risk assessment systems

• Enhance beneficial ownership investigations

• Modernize transaction monitoring systems

• Prepare for expanded cross-border reporting

• Improve regulatory response procedures

• Monitor secondary legislation continuously

• Budget for levy obligations

The reforms also create opportunities for:

• AML automation

• RegTech deployment

• Enhanced data analytics

• Dynamic risk intelligence integration

Conclusion

New Zealand’s dual AML/CFT amendment bills collectively establish one of the most significant overhauls of the country’s financial crime framework in over a decade.

The reforms move the regime toward:

• Centralized supervision

• Risk-responsive regulation

• Greater operational agility

• Stronger enforcement

• Expanded transparency

• FATF-aligned modernization

For AML compliance professionals, the message is clear: the future New Zealand AML/CFT regime will be more centralized, more data-driven, more dynamic, and substantially more demanding operationally.

Institutions that proactively strengthen governance, automate compliance processes, integrate regulatory intelligence, and enhance risk management frameworks will be best positioned to adapt successfully to the evolving regulatory landscape.

Read about the laws click on the links below:

• Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill
• Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill

Read about the product: Transact Comply

Empower your organization with ZIGRAM’s integrated RegTech solutions – Book a Demo