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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 (“Act”), the Associate Minister of Justice hereby gives notice that he has granted the following exemption from the Act:

Ministerial Exemption: Transactions of Tax Pooling Intermediaries

1. As the Associate Minister of Justice, and under section 157 of the Act, I exempt specified tax pooling transactions from the following sections of the Act:

  1. sections 10 to 21 (standard and simplified due diligence):
  2. sections 22 and 23 to 26 (enhanced due diligence except in circumstances where section 22A applies):
  3. sections 29 to 30 (correspondent banking relationships):
  4. sections 32 to 39 (reliance on third parties and prohibitions):
  5. sections 50 to 55 (identity and verification of records):
  6. sections 68 to 71 (cross-border transportation of cash).

2. For the purposes of this exemption,—

Act means the Anti-Money Laundering and Countering Financing of Terrorism Act 2009

ML/TF means money laundering and terrorist financing

specified tax pooling transaction—

  1. means a payment that is either—
    1. a deposit made by a client into a TPI’s tax pooling account, that will be available for immediate on-payment to Inland Revenue to meet an existing or anticipated tax liability in respect of the client; or
    2. a purchase of an existing tax deposit in a TPI’s tax pooling account available for immediate on-payment to Inland Revenue; and
  2. does not include any refund of money from a TPI’s tax pooling account to any person.

tax pooling account has the same meaning as in section RP 17B of the Income Tax Act 2007

TPI means a tax pooling intermediary described in section RP 17 of the Income Tax Act 2007 and that is a reporting entity for the purposes of the Act

3. This exemption is subject to the following conditions:

  1. in respect of each client that is a company, a TPI must hold identity information that is publicly available in relation to that company at the time the business relationship between the client and the TPI is entered into and at such time the client instructs the TPI to refund a deposit, or any portion of that deposit:
  2. in respect of all clients, a TPI must hold identity information for at least one individual who has authority to act on behalf of the client:
  3. before a client’s deposit is transferred from the TPI’s tax pooling account to the client’s account at the Inland Revenue, the TPI must take reasonable steps to ascertain the amount of the client’s tax liability that the transfer is made to satisfy:
  4. A TPI must, when a refund from the TPI’s tax pooling account is requested by a client, ensure that it has completed CDD to the level required under the Act prior to that refund occurring:
  5. in respect of all clients and transactions, a TPI must continue to meet all other requirements of the Act (unless otherwise exempted from above) including account monitoring, suspicious activity reporting, and prescribed transaction reporting:
  6. a TPI must, when a suspicious activity report is required to be submitted pursuant to section 40 of the Act,—
    1. obtain identity information required under section 15 of the Act; and
    2. carry out enhanced customer due diligence as described in sections 23–26 where required by section 22A for making suspicious activity reports.

4. The exemption has been granted for the following reasons:

  1. there is a low risk of ML/TF associated with specified tax pooling transactions and the conditions associated with the conditions sufficiently mitigate remaining ML/TF risk:
  2. in the absence of the exemption, the regulatory burden of compliance in respect of specified tax pooling transactions would be disproportionate to the benefits:
  3. the compliance obligations continue to apply in respect of other higher risk transactions involving a tax pooling account, including any refunds made from the account.

5. The exemption comes into force on 1 July 2020.

6. The exemption expires at the close of 1 July 2025.

Dated at Wellington this 1st day of July 2020.

Hon AUPITO WILLIAM SIO, Associate Minister of Justice.