The Anti-Money Laundering and Countering the Financing of Terrorism Act 2009 obliges New Zealand’s financial institutions and businesses to detect and deter money laundering and the financing of terrorism. The Act, which came into full force in 2013, also requires banks to gather more information about customers than previously. This can be inconvenient to some customers, but is a legal requirement for banks.
Information banks must collect
Banks must be more stringent when verifying a customer's identity. They need information from independent and reliable sources to do this.
The Act requires banks to collect more information about their customers to:
- ensure their understanding of a customer’s business with them is accurate
- help them assess the customer’s risk profile
- help them identify transactions that may be suspicious.
You may have to provide more evidence of your identity and personal details than before. This can extend to all types of accounts, including personal, business and trust accounts. Similarly, your bank may ask for more information if you want to transfer money above a certain amount overseas.
A bank must report to police any transaction it reasonably believes is suspicious.
A bank must not do business with a customer if it is unable to comply with the Act in its dealings with that customer. This means:
- it may not process certain transactions
- it can withdraw its products and services
- it can choose not to accept someone as a customer.
Information you may need to get
You may have to provide:
- your full name and date of birth
- your address
- your relationship to the customer (if you are not the customer)
- your company’s identifier or registration number
- the source of your funds
- the names and dates of birth for beneficiaries of a trust
- the details of someone you are sending money to if you are making an international payment
- the nature and purpose of your business with the bank
- any other information prescribed by regulations.
A bank may ask for the following to verify your identity:
- your passport, or
- your birth certificate and 18+ card, or
- your driver’s licence and EFTPOS card.
A bank may ask for the following to verify your address:
- recent utility bill, bank statement or insurance policy, or
- recent letter from the Electoral Office, a government agency, your employer or
- recent tenancy agreement.
Note: these are examples only. Your bank may want extra or different information.
Where to take your concerns
Talk to your bank first if you have concerns about how the Act affects you. Banks are legally required to have policies and practices compliant with the Act. We do not have the power to compel banks to alter their practices or policies. However, we may be able to consider a complaint about a practice or policy that has breached an obligation or duty that the bank owes to the customer. You can also complain to us if you believe your bank has breached its statutory obligations.
Bank entitled to close account, and did so correctly
Hamish ran a funds remittance business, ABC Ltd. His bank decided to close the company's account because of concerns it was being used in breach of the anti-money laundering legislation. The bank sent Hamish a letter saying it would close his account in 14 days because of those concerns. Hamish believed the bank could not close his accounts unless it could prove its claims. He complained to the bank, which stood by its decision.CASE 2
Extra information sought about address reasonable
Jackie wanted to transfer funds from her overseas account to her New Zealand bank account. She asked her New Zealand bank for its SWIFT code, the bank’s unique identification code needed for international transfers. The bank provided the code, and also told her what information she would need to make the payment. Two days later, the Anti-Money Laundering and Countering the Financing of Terrorism Act 2009 came into effect.CASE 3
Bank on firm ground in closing accounts
Tama was the director of a foreign exchange and international remittance agency, XYZ Ltd. Tama received a letter from his bank saying it would close XYZ Ltd’s accounts in one month because the company no longer met the bank’s risk profile, which had changed following the introduction of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.
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