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 AML/CFT Act:
Ministerial Exemption: Methodist Employment Generation Fund (Northern) Trust
1. As the Minister of Justice, and pursuant to section 157 of
the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("Act"), I exempt Methodist Employment Generation Fund (Northern) Trust (MEG) from the following provisions of the Act:
(a) Section 11(1)(b);
(b) sections 26-39;
(c) section 49(3);
(d) sections 50-91; and
(e) sections 101-163.
2. This partial exemption has been made for the following reasons:
(a) There is a low risk of money laundering and terrorist financing through MEG as:
(i) MEG is a not-for-profit, registered charitable organisation that accepts deposits from the public to enable it to perform social lending by providing safe credit to low income people for a range of small businesses.
(ii) MEG limits its lending to individuals and businesses it considers socially responsible.
(iii) MEG offers defined and limited services to specific customers with robust internal processes that confirm the identity of the applicants and the purpose for which loans provided will be used.
(iv) The management committee makes the final decision on all lending applications and retains control of the use of funds of the organisation for lending purposes.
(v) MEG meets the criteria of a "lower risk" financial inclusion institution, under Financial Action Task Force guidelines, to be granted a partial exemption allowing it to apply simplified AML/CFT measures.
(b) The obligations imposed on MEG would be disproportionate given the low risk of money laundering or terrorist financing in the circumstances outlined in this exemption.
3. This exemption comes into force on the day after the date I grant this exemption (18 March 2014).
4. This exemption will expire on 30 June 2018.
Ministerial Exemption: Dairy Industry and Fonterra Superannuation 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 ("Act"),
I exempt the trustees of:
(a) the Dairy Industry Superannuation Scheme;
(b) the Fonterra Superannuation Scheme (collectively, "Schemes"); and
(c) any person promoting or operating either Scheme on behalf of the trustees
from Part 2 of the Act in relation to services provided in respect of the Schemes. In order to provide consistency and minimise risks of money-laundering, the specific provisions referred to below in paragraphs 2(c), 5 and 6 will still remain in force in relation to transfers to the Schemes from international sources or withdrawals from either Scheme in certain circumstances (as applicable).
2. This exemption is subject to the following conditions:
(a) Subject to paragraphs 3 and 4, the trustees are required to remove any mechanisms contained in
the trust deed for each of the Dairy Industry Superannuation Scheme and the Fonterra Superannuation Scheme that enable members to contribute to the relevant Scheme voluntarily other than through payroll. This includes the ability of the trustees to accept contributions in any form, in its or their absolute discretion.
(b) The Schemes must remain registered superannuation schemes as defined under the Superannuation Schemes Act 1989, or registered schemes under the Financial Markets Conduct Act 2013, as applicable.
(c) With the exception of Australian superannuation transfers to the Schemes (if applicable), 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 and, where the transaction is relevant to a suspicious transaction report, transaction records in accordance with section 49(1) and (2)(a)-(f) of the Act are required on all transfers to the Schemes from international sources.
3. The trust deed may permit voluntary contributions made other than through payroll to those sections of the Schemes which are subject to restrictions set out in
the complying fund rules (as defined in section YA 1
of the Income Tax Act 2007), provided there is a cap on any non-payroll voluntary contribution. The cap should be set at the amount (after taking into account any contribution through payroll) required to enable a member to maximise those government contributions set out in section MK 4 of the Income Tax Act 2007.
4. The trust deed for each Scheme may permit contributions to be made other than through payroll by a member to the relevant Scheme during a permitted period of unpaid leave of absence (Regular Leave of Absence Contributions) where:
(a) the employer or the Scheme's administrator collects those contributions; and
(b) the contributions do not exceed (as to either amount or frequency) the contributions that were being paid by the relevant member in accordance with the trust deed for the Scheme immediately prior to the member commencing leave of absence.
5. Where any Regular Leave of Absence Contributions are received from international sources during the permitted period of unpaid leave of absence, the following sections of the Act apply to such contributions:
(a) Sections 10-17 of the Act (and for the purposes of section 14(d) of the Act, the receipt of a contribution from an international source is specified as a circumstance in which standard customer due diligence must be conducted);
(b) sections 40-48 of the Act;
(c) where the transaction is relevant to a suspicious transaction report, sections 49(1) and 2(a)-(f) of the Act; and
(d) sections 92-100 of the Act.
6. Where any withdrawals are made by a member in addition to that member making Regular Leave of Absence Contributions during the permitted period of unpaid leave of absence the following sections of the Act apply to such withdrawals and contributions:
(a) Sections 10-17 of the Act (and for the purposes of section 14(d) of the Act, the first such withdrawal
is specified as a circumstance in which standard customer due diligence must be conducted);
(b) sections 40-48 of the Act;
(c) where the transaction is relevant to a suspicious transaction report, section 49(1) and (2)(a)-(f) of the Act; and
(d) sections 92-100 of the Act.
7. The exemption has been granted for the following reasons:
(a) The trustees' only duties as reporting entities 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 addressed by the 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 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.
8. This exemption comes into force on the day after the date I grant this exemption (18 March 2014).
9. This exemption will expire on 30 June 2018.
Ministerial Exemption: First State Investment (NZ) Limited
1. As the Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("Act"), I exempt First State Investment (NZ) Limited (FSINZL) from section 56(2) of the Act in so far as the AML/CFT compliance officer must be an employee of the reporting entity. The exemption is made in this case to allow the AML/CFT compliance officer to be an employee of an Australian entity that is a member of the Commonwealth Bank of Australia group of entities ("CBA Group").
2. The AML/CFT compliance officer should maintain
a strong relationship with FSINZL's senior management and have a clear reporting line to FSINZL's board.
New Zealand staff should have access to the Australian-based officer in order to report suspicious circumstances that may arise, and ensure that the AML/CFT compliance officer maintains 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, and it will allow FSINZL to use the CBA Group's existing AML/CFT compliance expertise.
4. All other provisions of the Act apply. I particularly draw 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 (18 March 2014).
7. This exemption will expire on 30 June 2018, and/or if the conditions of the exemption are breached.
Ministerial Exemption Form: Quaker Investments Ethical Trust
1. As the Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("Act"), I exempt Quaker Investments Ethical Trust ("Trust") from the following provisions of this Act:
(a) Section 11(1)(b);
(b) sections 26-39;
(c) section 49(3); and
(d) sections 50-71.
2. However, for the following transactions, section 11(1)(b) applies:
(a) Wire transfers that are not domestic wire transfers as defined under section 5 of the Act; and
(b) Any transaction or occasional transaction as defined under section 5 of the Act that is between the Trust and any individual, person, government agency or any type of institution not in New Zealand.
3. This exemption has been made for the following reasons:
(a) There are lower risks of money laundering and terrorist financing through the Trust as:
(i) The Trust has four types of loans, each of which has a specific maximum amount and may only be provided in certain circumstances; for example where a person would not otherwise be able to secure conventional financing or afford commercial interest rates;
(ii) the Trust does not engage in or encourage overseas lending;
(iii) there are no new overseas depositors, and at
the moment there are [REDACTED] overseas depositors;
(iv) most depositors in the Trust are long-term investors and are known to the trustees;
(v) the trustees make the final decision on all lending applications and retain control of the use of the funds of the organisation for lending purposes;
(vi) the Trust already carries out a limited form of customer identification on loan applicants.
(b) The obligations imposed on the Trust would be disproportionate given the lower risk of money laundering or terrorist financing in the circumstances outlined in this exemption.
4. If any additional information is received by an
AML/CFT supervisor that raises concern of money laundering or terrorist financing, the exemption may be revisited.
5. This exemption will come into force on the day after the date I grant this exemption (18 March 2014).
6. This exemption will expire on 30 June 2018.
Ministerial Exemption: Nelson Enterprise Loan Trust
1. As the Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("Act"), I exempt Nelson Enterprise Loan Trust (NELT) from the following provisions of the Act:
(a) Section 11(1)(b);
(b) sections 26-39;
(c) section 49(3);
(d) sections 50-91; and
(e) sections 101-163.
2. This partial exemption has been made for the following reasons:
(a) There is a low risk of money laundering and terrorist financing through Nelson Enterprise Loan Trust as:
(i) NELT is a not-for-profit organisation that accepts deposits from the public to enable it to perform social lending by providing safe credit to low income people for a range of small businesses.
(ii) NELT limits its lending to individuals and businesses it considers both socially and environmentally responsible.
(iii) NELT offers defined and limited services to specific customers with robust internal processes that confirm the identity of the applicants and the purpose for which loans provided will be used.
(iv) trustees make the final decision on all lending applications and retain control of the use of funds of the organisation for lending purposes.
(v) NELT meets the criteria of a "lower risk" financial inclusion institution under Financial Action Task Force guidelines, to be granted a partial exemption allowing it to apply simplified AML/CFT measures.
(b) The obligations imposed on NELT would be disproportionate given the low risk of money laundering or terrorist financing in the circumstances outlined in this exemption.
3. This exemption comes into force on the day after the date I grant this exemption.
4. This exemption will expire will expire on 30 June 2018.
Ministerial Exemption: Snap-on Tools (Australia) Pty. Limited and Snap-on Tools (New Zealand) Limited
1. As the Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("Act"), I exempt Snap-on Tools (Australia) Pty. Limited ("Snap-on") and Snap-on Tools (New Zealand) Limited ("Snap-on NZ") from all of the provisions of the Act, except for subpart 2 of Part 2 (suspicious transaction reporting) and section 49(1) and (2)(a)-(f), where the transaction is relevant to the suspicious transaction report.
2. This partial exemption has been made for the following reasons:
(a) There is a low risk of money laundering and terrorist financing through Snap-on and Snap-on NZ as:
(i) the core business of Snap-on and Snap-on NZ is selling Snap-on products. Snap-on and
Snap-on NZ provide credit to their franchisees and their franchisees' customers, but this is incidental to the core business, in order to facilitate the sale of Snap-on products.
(ii) Snap-on currently has monitoring mechanisms in place to mitigate the risk of money laundering, which are able to identify and report on large cash transactions. The partial exemption will leverage these existing mechanisms to mitigate risks.
(b) The obligations imposed on Snap-on and Snap-on NZ would be disproportionate given the low risk of money laundering or terrorist financing in the circumstances outlined in this exemption.
(c) The application of the Act to Snap-on and Snap-on NZ is a technical anomaly that results from
Snap-on and Snap-on NZ's unique corporate structure. But for this structure, the provision of credit by Snap-on and Snap-on NZ would fit squarely within an existing exemption for consumer credit under section 13 of the Anti-Money Laundering and Countering Financing of Terrorism (Exemptions) Regulations 2011.
3. This exemption is subject to the following condition:
(a) If the business activities of Snap-on and Snap-on NZ change in a material way, in that it is required to carry out further activities which fall within the ambit of the AML/CFT Act, Snap-on and Snap-on NZ are required to notify the Ministry of Justice and the Department of Internal Affairs and undertake to work with those bodies to agree how to manage any risks.
4. This exemption comes into force on the day after the date I grant this exemption.
5. This exemption will expire 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