Government Changes To Anti-Money Laundering Laws Aim To Cut Red Tape For Small Businesses
Associate Justice Minister Nicole McKee has been showcasing the changes this week.
They include:
Making it easier for parents to open bank accounts for their children
Introducing a more risk-based system for selling property from non-trading (e.g. family) trusts
Greater powers for police to freeze bank accounts more quickly, and a ban on cryptocurrency ATMs
Fronting to media at Tommy's Real Estate in Wellington, she said some of these changes would be done by the end of the year. Others will be introduced as part of an omnibus bill next year - but "all of it will be implemented by the end of this [Parliamentary] term".
"This government is serious about targeting criminals, not clogging up legitimate businesses and everyday people with red tape," McKee said.
"We know the current system is not delivering as well as it could for New Zealanders, particularly New Zealand businesses. This is because the laws and requirements are prescriptive, highly complex and not sufficiently risk based."
She said the changes for family trusts, for example, would make it easier for real estate agents and property sellers - using an example of a farm the family wanted to sell, held in a trust.
"All the verifications of who they are, where the trust deed came from, where the money came from to purchase the farm - there's a whole lot of due diligence, and in some areas, it can take months to go through."
In future, non-trading trusts could be assessed by the agents as being less risky, so all that paperwork would not be needed.
This would be monitored by the Department of Internal Affairs, which will become the sole supervisor, taking some staff and duties off the Reserve Bank and Financial Markets Authority.
The minister said the supervisor would not require additional funding, but the new designated business groups - which would see a franchise head office become responsible for all the other franchises - may need some support to develop frameworks.
Tommy's Real Estate chief executive Ben Castle said they were very supportive of the changes, particularly around family trusts.
"It can vary depending on the complexity of that due diligence ... that can take anywhere between I guess a couple of weeks to months, depending on where people are based - it could be here in New Zealand, it could be simple, or it could be offshore.
"Simplifying it is going to make it easier for everyone."
He said he had never personally come across any cases of money laundering through real estate - but that did not mean there weren't any.
McKee said real estate was the third most prominent way of laundering money in New Zealand.
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