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New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism regime (AML/CFT) is morphing into a smoother, smarter compliance tool through a series of recent or prospective reforms.
These include just completed technical amendments to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act), proposed updates to the Identity Verification Code of Practice, and two AML/CFT amendment Bills still before Parliament, with a further Bill signalled for introduction next year.
We catch you up with the changes in detail.
Technical amendments
These came into force on 27 November 2025 and represent a significant improvement on the status quo ante as they should reduce compliance costs and provide new flexibility for reporting entities. They:
- clarify that address verification is required only in the context of enhanced customer due diligence in higher risk circumstances, not for standard due diligence processes
- amend the interpretation of ‘occasional transaction’ to exclude cheque deposits made at a registered bank or non-bank deposit taker, and
- extend the filing deadline:
- from 10 working days to 20 for Prescribed Transaction Reports, and
- from three working days to five for law firms to submit Suspicious Activity Reports.
Ministerial exemption for banks
This came into effect on 1 November 2025 and is intended to improve the detection and prevention of scams.
It allows the 13 banks that are approved participants in the Fraud Intelligence Exchange (FIX) Ecosystem to share certain information relating to suspicious activity reporting (SAR) and prescribed transaction reporting (PTR).
The data sharing can occur only among the 13 banks, and solely for law enforcement purposes, supplementing wider government measures targeting cybersecurity and fraud.
The obligation to report PTR and SAR information to the Police as appropriate, and all other relevant obligations, remains.
The banks will need to ensure that their terms and conditions allow sharing of information for this purpose (especially in relation to personal information) because the exemption is merely permissive (and does not require mandatory sharing of information).
The exemption has been granted for a five-year period to November 2030.
Identity Verification Code of Practice
Consultation has opened on proposed updates to the Identity Verification Code of Practice (IVCOP), aimed at:
- streamlining and updating current documentary identity verification settings
- exploring additional verification pathways, particularly through accredited Digital Identity Services Trust Framework providers and with the goal of future proofing the IVCOP to provide for unknown novel and new identity verification practices
- applying the IVCOP to high-risk customers as it applies to low and medium risk customers
- emphasising flexibility within the IVCOP for certain persons, including beneficial owners, persons acting on behalf of others and wire transfer initiators, and
- expanding exceptions under the IVCOP.
Feedback is sought on whether the proposals strike an appropriate balance between reducing regulatory burden for reporting entities while ensuring New Zealand is well placed to tackle organised crime and protect our international reputation as a trusted place to do business.
Submissions close at 5pm on Monday 19 January 2026.
Three-Bill tango for AML/CFT Act
The two Bills before Parliament and awaiting second readings are:
- the Anti Money Laundering and Countering Financing of Terrorism Amendment Bill which effects a range of largely technical changes arising from the Financial Action Task Force’s 2019-2021 review and a statutory review of the AML/CFT Act. See our commentary here, and
- the Anti Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill, which is expected to apply from 1 July 2026, and proposes to:
- create a single AML/CFT supervisor model
- increase the supervisor’s powers of supervision
- expand various regulatory powers to enable the creation of secondary legislation and
- introduce an industry levy.
Also on the horizon is the Anti Money Laundering and Countering Financing of Terrorism (Omnibus) Amendment Bill. Expected to be introduced to Parliament in mid-2026, it proposes to:
- enable the automatic formation of a designated business group for eligible entities to implement group-wide programmes, and allow a broader range of entities to form designated business groups with the approval of the AML/CFT supervisor
- provide the Financial Intelligence Unit with additional powers to detect and deter suspicious activity
- modernise the offences and penalties provisions in the AML/CFT Act and ensure law enforcement has the tools to deter organised crime
- support the implementation of targeted financial sanctions, and
- implement further minor amendments to support the functioning of the AML/CFT system.
Our thoughts
The new technical amendments to the AML/CFT regime are non-controversial and helpful for the industry and consumers. They provide an opportunity for reporting entities to review and streamline their compliance processes and improve the ease of doing business with customers.
The ongoing programme of reform with the changes to the IVCOP and in the various Bills is also largely positive and will continue to improve efficiency and reduce unnecessary compliance costs.
Next steps
Reporting entities should be updating their AML/CFT compliance programmes and practices to reflect the changes that have been made.
If you would like assistance with this or with preparing a submission on the IVCOP consultation, please contact our team.
Our thanks to Judy Fong for her assistance in preparing this article.
