Notice Type
Departmental
Notice Title

Ministerial Exemptions Under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009

In accordance with section 157(6)(b) 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: Waterfront Industry 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 Waterfront Industry Superannuation Fund (WISF); and
(b) the Waterfront Industry KiwiSaver Scheme (WIKS);
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 WISF that enable members to contribute to the WISF 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 WIKS. 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 WIKS, 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 (8 September 2013).
5. This exemption will expire on 30 June 2018.
Ministerial Exemption: Crown Asset Management Limited
1. As the Minister of Justice, pursuant to section 157 of
the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("the Act"), I exempt Crown Asset Management Limited from the following provisions of the Act:
(a) Part 2, sections 9-71.
2. This exemption is made subject to the following condition:
(a) Crown Asset Management Limited is required to notify its Statutory Supervisor, the Department of Internal Affairs, if it lends above $500,000 in one year (starting 30 June 2013) on the one working capital facility it has continued to offer to one customer.
3. This exemption has been made for the following reasons:
(a) There is a low risk of money laundering and terrorist financing through Crown Asset Management Limited as:
(i) the assets that have been acquired by Crown Asset Management Limited are subject to a traceable history, sourced from the companies that the Shareholding Ministers have directed Crown Asset Management Limited to acquire assets from;
(ii) further acquisition of assets is restricted to that directed by the Shareholding Ministers (the Ministers of Finance and State Owned Enterprises);
(iii) Crown Asset Management Limited's activities are subject to Crown supervision assisted by the Treasury and Crown Ownership Monitoring Unit;
(iv) Crown Asset Management Limited is required to make distributions to its shareholders on a quarterly basis;
(v) Crown Asset Management Limited's purpose, to acquire assets from six companies and obtain the best return for the Crown, is intended to be concluded by 30 June 2014; and
(vi) Financial Transactions Reporting Act 1996 obligations, specifically suspicious transaction reporting, will apply to Crown Asset Management Limited and its representatives when disposing of assets on its behalf.
(b) The obligations imposed on Crown Asset Management Limited would be disproportionate given the low risk of money laundering or terrorist financing in the circumstances outlined in this exemption.
4. This exemption comes into force on the day after the date I grant this exemption (21 November 2013).
5. This exemption will expire on 30 June 2015.
Ministerial Exemption: The New Zealand Housing Corporation
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 the New Zealand Housing Corporation (Corporation) from Part 2 of the Act in relation to financial activities provided in connection with the following products as they are described in the Corporation's application:
(a) Kainga Whenua loans;
(b) Housing Innovation Fund loans; and
(c) KiwiSaver First Home Deposit subsidy.
2. This exemption is made subject to the following conditions:
(a) Suspicious transaction reports are to be carried out by the Corporation in accordance with subpart 2 of Part 2 of the Act in relation to the drawdown
of Housing Innovation Fund loans where the Corporation is responsible for oversight.
(b) That the exemption be used for the benefit of the Corporation only.
(c) If, following the introduction of a new Government initiative or a change to an existing product, the Corporation is required to carry out further activities which fall within the ambit of the Act, the Corporation is required to notify the Ministry and the Department of Internal Affairs and undertakes to work with those bodies to agree how to manage any risks.
3. This exemption has been made for the following reasons:
(a) The only activity that the Corporation provides in relation to the Kainga Whenua loans is the provision of guarantees to Kiwibank. The Corporation has no real customer interface with the borrowers apart from ensuring that security is adequately received. The risks of money laundering involved in providing a guarantee to Kiwibank are low.
(b) In relation to Housing Innovation Fund loans, the Corporation is responsible for the monitoring and drawing down of existing loans. There is a slight risk that the process involved in drawing down any remaining funds could be abused if it is not tightly managed. Requiring suspicious transaction reports to be filed by the Corporation in relation to those remaining funds ensures that there is a formal process in place if unusual activity occurs.
(c) In relation to the KiwiSaver First Home Deposit subsidy, while there is a theoretical opportunity [REDACTED], to launder [REDACTED], we consider the likelihood that this would occur in practice is extremely low. The amount of money involved is not high and [REDACTED].
(d) We cannot recommend that a broad exemption be provided to the Corporation to cover future Government initiatives. There is no certainty around the types of activities that the Corporation could be involved in.
4. This exemption comes into force on the day after the date I grant this exemption (21 November 2013).
5. This exemption will expire on 30 June 2018.
Ministerial Exemption Form: The Tindall Foundation
1. As the Minister of Justice, pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("the Act"), I exempt The Tindall Foundation from all the provisions of this Act.
2. This exemption is not subject to any conditions.
3. This exemption has been made for the following reasons:
(a) There is a low risk of money laundering and terrorist financing through The Tindall Foundation as:
(i) The Tindall Foundation is a not for profit charitable organisation that does not accept money from the public and manages only the private money of one family. It is registered with the Charities Commission (#CC35747);
(ii) The Tindall Foundation offers a community service that seeks to assist businesses to access safe credit for a purpose consistent with its Charitable Purpose as set out in its Trust Deed;
(iii) The Tindall Foundation offers defined and limited services to specific customers with robust internal processes that confirm the purpose for which loans provided will be used; and
(iv) the trustees make the final decision on all lending applications and retain control of the use of the funds of the organisation, including with respect to loan applications.
(b) The obligations imposed on The Tindall Foundation would be disproportionate given the low risk of money laundering or terrorist financing in the circumstances outlined in this exemption.
4. This exemption comes into force on the day after the date I grant this exemption (21 November 2013).
5. 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 by emailing international.crime@justice.govt.nz