In accordance with section 157(6)(b) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“Act”), the Associate Minister of Justice hereby gives notice that he has granted the following exemption from the Act:
Ministerial Exemption: Catalyst Microfranchising
- In my capacity as the Associate Minister of Justice and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“Act”), I exempt Catalyst Microfranchising (CM) from all provisions of the Act except:
- Part 2, Subpart 2 – Suspicious transaction reports (sections 40–48); and
- Part 3, Subpart 3 – Offences relating to suspicious transaction reports (sections 92–100).
- The exemption is subject to the following conditions:
- CM must maintain the current maximum amount that can be processed per one deposit transaction, $400.00.
- CM must maintain the current cap of ten deposits, each to the maximum value of $400.00, per investor per year.
- CM’s organisational transaction volumes must remain under $1,000,000.00 per year.
- The exemption has been granted for the following reasons:
- There is a very low risk of money laundering and terrorist financing through CM as:
- it is a not-for-profit organisation offering no rate of interest on the deposits made by investors. It is registered in the Charities Register under the Charities Act 2005 (CC48429);
- its only activity caught by the Act is the option given to the depositors to have their deposit capital repaid at the end of the 12-month cycle; and
- the individual deposits received by Catalyst Microfranchising are small (maximum of $400.00 each) and the depositors have no way of controlling or directing their funds.
- Due to the very low money laundering and terrorism financing risks raised by CM 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.
- 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 Task Force and the Asia/Pacific Group on Money Laundering.
- This exemption came into force on the day after the date I granted this exemption (17 March 2016).
- This exemption will expire on 30 June 2018.
Any person wishing to provide comment on this notice should contact the Criminal Law Team at the Ministry of Justice by emailing firstname.lastname@example.org.