In accordance with section 159(3) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("the Act"), the Minister of Justice hereby gives notice that she has granted the following exemptions from the Act:
Ministerial Exemption: JPMorgan Chase Bank, N.A.
(New Zealand Branch)
1. As the Minister of Justice and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("the Act"), I exempt
the reporting entity JPMorgan Chase Bank, N.A.
(New Zealand Branch) ("JPMorgan") from section 56(2) of the Act in so far as the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) compliance officer must be an employee of the reporting entity. The exemption is approved in this case, allowing the AML/CFT compliance officer to be an employee of an Australian entity.
2. The AML/CFT compliance officer intends to maintain a strong relationship with the New Zealand reporting entity's senior management and have clear reporting lines. New Zealand staff should have access to the Sydney-based officer in order to report suspicious circumstances that may arise, and the officer maintain appropriate qualifications and knowledge, and proper access to key information and adequate resources.
3. This exemption has been granted as there are low risks of money laundering and terrorist financing associated with this specific exemption.
4. All other provisions apply. I particularly draw your attention to section 56(4) of the Act which states "The AML/CFT compliance officer must report to a senior manager of the reporting entity".
5. This exemption may be applied to successor(s) to the current AML/CFT Compliance Officer.
6. This exemption comes into force on the day after the date I grant this exemption (granted 8 September 2013).
7. This exemption will expire on 30 June 2018, and/or if the conditions of the exemption are breached.
Ministerial Exemption: Hallmark Life Insurance Company and Hallmark General Insurance Company Limited
1. As the Minister of Justice and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("the Act"), I provide Hallmark
Life Insurance Company Limited and Hallmark General Insurance Company Limited with partial exemptions from the provisions of the Act in relation to the provision of consumer life insurance policies under which consumer credit insurance with a life cover component are offered to customers. The exemptions specifically cover Part 2 of the Act.
2. This exemption is not subject to any conditions.
3. These exemptions have been made for the following reasons:
(a) The compliance burden to which both entities would be subjected if this exemption was not granted would be disproportionate to the money laundering and terrorist financing risks involved in the products offered.
(b) The low dollar value of the amounts involved.
(c) The loans to which these consumer life policies relate will have been checked and verified from an anti-money laundering perspective by the underlying credit providers.
(d) According to international findings, consumer life policies are considered to be lower risk products for money laundering and terrorist financing.
4. This exemption comes into force on the day after the date I grant this exemption (granted 8 September 2013).
5. This exemption will expire on 30 June 2016.
Ministerial Exemption: Hallmark Life Insurance Company Limited
1. As the Minister of Justice and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("the Act"), I partially exempt Hallmark Life Insurance Company Limited from the provisions of the Act in relation to the provision of current term life policies in run-off. This exemption specifically covers Part 2 of the Act.
2. This exemption is not subject to any conditions.
3. This exemption has been made for the following reasons:
(a) Sales of your term life policies were discontinued in 2008 and are currently in run-off.
(b) The compliance burden to which Hallmark would be subjected if this exemption was not granted would be disproportionate to the money laundering and terrorist financing risks involved with these products.
(c) The loans to which these term life policies relate will have been checked and verified from an anti-money laundering perspective by the underlying credit providers.
(d) According to international findings term life policies, are considered to be lower risk products for money laundering and terrorist financing.
4. This exemption comes into force on the day after the date I grant this exemption (granted 8 September 2013).
5. This exemption will expire on 30 June 2018.
Ministerial Exemption: GE Group
1. As the Minister of Justice and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("the Act"), I exempt the following reporting entities (together referred to as "GE Group") from paragraph (d)(i) of the definition of "designated business group" in the Act:
(a) Custom Fleet NZ;
(b) GE Finance and Insurance;
(c) GE Commercial Finance NZ; and
(d) GE Commercial Finance (USD) New Zealand.
2. This exemption is made subject to the following conditions:
(a) GE Group is required to otherwise satisfy all other requirements of the definition of a "designated business group";
(b) all the reporting entities which comprise the GE Group continue at all times to share the same common ownership and control; and
(c) all other provisions of the Act apply.
3. This exemption has been made for the following reasons:
(a) There are low risks of money laundering and terrorist financing associated with this specific exemption.
(b) The exemption is a technical exemption.
(c) All other provisions of the Act apply.
(d) The GE Group understands the requirements of the Act and is reviewing its current programme to ensure that it complies in time for the Act's inception.
(e) The burden of compliance costs on GE Group if the exemption was not granted would be unintended and significant.
4. This exemption comes into force on the day after the date I grant this exemption (granted 8 September 2013).
5. This exemption will expire on 30 June 2018, and/or if the conditions of the exemption are breached.
Ministerial Exemption: New Zealand Harbours Superannuation Plan
1. In my capacity as the Minister of Justice and pursuant
to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("the Act"), I partially exempt:
(a) the Trustees of the New Zealand Harbours Superannuation Plan ("the Plan"); and
(b) the Rail and Maritime Transport Union ("the Union") as the principal promoter of the Plan and those members of the National Management Committee of the Union who are not Trustees and are therefore also promoters ("the Promoters")
from the provisions of Part 2 of the Act in relation
to services provided in respect of the Plan. In order to provide consistency and eliminate risks of money-laundering, the specific provisions referred to below in paragraph 2 will still remain in force in relation to transfers to the Plan from international sources.
2. This exemption is subject to the following conditions:
(a) The Trustees are required to remove any mechanisms contained in the Trust Deed for the New Zealand Harbours Superannuation Scheme that enable members to contribute to the Scheme voluntarily other than through payroll.
(b) The Trustees are required to introduce a cap on voluntary contributions made (other than those made through payroll) to the New Zealand Harbours KiwiSaver Scheme. The cap should be set at the amount required to enable a member to maximise those government contributions set out in section MK 4 of the Income Tax Act 2007.
(c) With the exception of Australian superannuation transfers to the New Zealand Harbours KiwiSaver Scheme, Customer Due Diligence in accordance with sections 10-36 of the Act and suspicious transaction reports in accordance with sections
40-48 of the Act are required on all transfers to the Plan from international sources.
3. The exemption has been granted for the following reasons:
(a) The Trustees' and the Promoters' only duties as reporting entities under the Act are in respect of
the Plan;
(b) the Plan poses a very low risk of money laundering or terrorism financing;
(c) any risks posed by voluntary contributions outside of payroll have been covered off by conditions;
(d) due to the very low money laundering and terrorism financing risks raised by the Plan and the significant compliance costs that would arise from not granting this exemption, I consider that any benefits of requiring compliance with the Act are not justified given the associated costs; and
(e) this exemption is consistent with (and has no effect on the purpose or intent of) the Act, the Financial Transactions Reporting Act 1996 and New Zealand's international obligations as a member of the Financial Action Taskforce and the Asia Pacific Group on Money Laundering.
4. This exemption comes into force on the day after the date I grant this exemption (granted 8 September 2013).
5. This exemption will expire on 30 June 2018.
Ministerial Exemption: Seafarers Retirement Schemes
1. In my capacity as the Minister of Justice and pursuant
to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("the Act"), I partially exempt the Trustees of:
(a) the Seafarers Retirement Fund ("the SRF"); and
(b) the Seafarers Retirement Fund KiwiSaver Scheme ("the SRFKS");
together referred to as ("the Schemes") from the provisions of Part 2 of the Act in relation to services provided in respect of the Schemes. In order to provide consistency and eliminate risks of money-laundering,
the specific provisions referred to below in paragraph
2 will still remain in force in relation to transfers to the Schemes from international sources.
2. This exemption is subject to the following conditions:
(a) The Trustees are required to remove any mechanisms contained in the Trust Deed for the
SRF that enable members to contribute to the SRF voluntarily other than through payroll.
(b) The Trustees are required to introduce a cap on voluntary contributions made (other than those made through payroll) to the SRFKS. The cap should be set at the amount required to enable a member to maximise those government contributions set out in section MK 4 of the Income Tax Act 2007.
(c) With the exception of Australian superannuation transfers to the SRFKS, customer due diligence in accordance with sections 10-36 of the Act and suspicious transaction reports in accordance with sections 40-48 of the Act are required on all transfers to the Schemes from international sources.
3. The exemption has been granted for the following reasons:
(a) The Trustees' only duties as a reporting entity
under the Act are in respect of the Schemes;
(b) the Schemes pose a very low risk of money laundering or terrorism financing;
(c) any risks posed by voluntary contributions outside of payroll have been covered off by conditions;
(d) due to the very low money laundering and terrorism financing risks raised by the Schemes and the significant compliance costs that would arise from not granting this exemption, I consider that any benefits of requiring compliance with the Act are not justified by the associated costs; and
(e) this exemption is consistent with (and has no effect on the purpose or intent of) the Act, the Financial Transactions Reporting Act 1996 and New Zealand's international obligations as a member of the Financial Action Taskforce and the Asia Pacific Group on Money Laundering.
4. This exemption comes into force on the day after the date I grant this exemption (granted 8 September 2013).
5. This exemption will expire on 30 June 2018.
Ministerial Exemption: The New Zealand Guardian Trust Company Limited
1. As the Minister of Justice and pursuant to section
157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("the Act"), I exempt The New Zealand Guardian Trust Company Limited (NZGT) (and any of its wholly owned subsidiaries ("NZGT Subsidiary") and any other person that may
be nominated by the Crown ("Crown Nominee") to perform one or more of the activities described in this exemption), in relation to NZGT's role as instalment receipt trustee for the initial public offer by the Crown of shares in Meridian Energy Limited ("Meridian"), from the Act.
2. This exemption has been made for the following reasons:
(a) For commercial reasons, the share offer by the Crown of shares in Meridian Energy Limited
(the share offer) will be structured to allow investors to buy shares using a "split payment" method:
(i) Investors subscribe for the amount of shares they wish to hold in Meridian, but instead
of paying the full subscription amount and receiving their shares straight away, investors will instead pay some of the purchase price upfront and receive an "instalment receipt" of the shares subscribed to;
(ii) Each instalment receipt entitles the holder to
a share upon the Crown receiving a final instalment at a specified date in the future;
(iii) NZGT or an NZGT Subsidiary will hold the shares on trust for investors until the final instalment is required to be paid, following which the shares will be released;
(b) In relation to NZGT's role as instalment receipt trustee for the share offer, NZGT (or an NZGT Subsidiary) may have to perform a number of financial activities, in relation to:
(i) paying any dividends to the instalment holders;
(ii) enforcing payment to the Crown of an outstanding instalment and applying the recovered amounts to the Crown and certain other persons as set out in the trust deed;
(iii) transferring ownership of shares once the final instalment is received;
(c) If there are any unpaid amounts still owing after the date the final instalment is due, the Crown Nominee may be directed to carry out one or more of the financial activities described in this exemption in relation to recovering the unpaid amount rather than NZGT.
(d) An exemption is justified because:
(i) If Meridian were to offer shares itself, it is unlikely that Meridian would be subject to
any Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) obligations; it is largely a result
of the different structure necessary to accommodate a split payment option that AML/CFT obligations apply to the share offer;
(ii) If the Crown were to issue the instalment receipts, although these instalment receipts could result in funds being repayable to the public in the event that the final instalment
is not paid, it is likely that the exemption in Regulation 23 of the Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011 would apply;
(iii) Granting an exemption would not have a material impact on the risks of money laundering or terrorist financing given there
is no material difference in such risks between the share offer and an offer where the Crown offered the instalment receipts itself;
(iv) There would be undue compliance difficulties and costs if NZGT (or an NZGT Subsidiary or Crown Nominee) were required to comply with AML/CFT obligations, for example:
(A) performing customer due diligence on the potentially large numbers of investors where investors also have
the ability to trade the receipts on the secondary market;
(B) the finite period of time that NZGT will be instalment receipt trustee;
(v) There are no clear reasons justifying different regulatory treatment between the share offer and an offer where the Crown offered the instalment receipts itself, and in the absence of an exemption this may result in a competitive disadvantage for the share offer;
(vi) Accordingly an exemption from the Act for NZGT (or an NZGT Subsidiary or Crown Nominee) in respect of NZGT's activities
as instalment receipt trustee is justified.
3. This exemption comes into force on the day after the date I grant this exemption (granted 17 September 2013).
4. This exemption will expire on 30 June 2018.
Any person wishing to provide comment on these notices should contact the Criminal Law Team at the Ministry of Justice:
international.crime@justice.govt.nz