Enhancing Anti-Money Laundering measures in New Zealand
In a bold move to address financial crime and create a more business-friendly environment, the New Zealand government has approved a new Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regime. The reforms, set to take effect in 2025, aim to establish a more agile and risk-based system that targets criminals and financial crime, while easing compliance burdens on legitimate businesses.
### Key Features of the 2025 AML/CFT Framework
The new framework introduces several significant changes, including simplified customer due diligence (CDD) for low-risk activities, a cap on international cash transfers, and a ban on Crypto Automated Teller Machines (ATMs).
Businesses dealing with lower-risk clients will face reduced identity verification and due diligence requirements, allowing them to focus resources on higher-risk threats. A new rule limits cash transfers across borders to a maximum of NZD 5,000, designed to disrupt organised criminal groups from moving illicit funds internationally. Crypto ATMs, vulnerable to misuse by criminal actors, will be prohibited to make it more difficult for criminals to convert cash to high-risk assets such as cryptocurrencies.
The Financial Intelligence Unit (FIU) and supervisors will gain stronger and more proactive powers to demand ongoing access to transactional and contextual financial data from banks and reporting entities, improving real-time tracking of suspicious behaviour and strengthening enforcement actions.
### Impact on Business and Financial Sanctions
The reforms are expected to benefit businesses, especially smaller or lower-risk ones, by reducing unnecessary regulatory red tape, freeing them to operate more efficiently. Clearer and more accessible guidance will be provided by the dedicated national AML/CFT supervisor to help industries comply correctly without confusion or excessive cost.
The new supervisory and enforcement powers are expected to improve the effectiveness of sanctions enforcement, including financial sanctions oversight, though some details about the levy and regime are pending consultation.
### Impact on Crypto ATMs and the Fight Against Crime
The ban on crypto ATMs closes a loophole used by criminals to rapidly exchange illicit cash into digital assets, thus strengthening AML controls over crypto-related activities. Enhanced real-time data access and supervision by the FIU enable quicker identification of suspicious activities, increasing deterrence against money laundering and terrorism financing.
Overall, New Zealand’s 2025 AML/CFT reforms mark a significant shift to a risk-based, intelligence-led regime that balances efficient business operations with robust crime deterrence, modernizing the country’s approach to financial crime in a complex global landscape.
- In the new Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) framework, businesses dealing with lower-risk clients will face reduced identity verification and due diligence requirements, which can be considered as part of the effort to create a more business-friendly environment in finance.
- The ban on Crypto Automated Teller Machines (ATMs) is a key feature of the 2025 AML/CFT framework, aiming to make it more difficult for criminals to convert cash to high-risk assets such as cryptocurrencies, thus addressing financial crime concerns in the business sector.
