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Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT)
Regime Review
Industry Advisory Group – Terms of Reference
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1. Purpose
The Terms of Reference provide information for the Industry Advisory Group (IAG) and
outline its expected function.
2. Background
The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act)
forms a significant part of New Zealand’s framework to combat money laundering, terrorism
financing, and otherwise keep illicit funds out of the economy. The purposes of the Act are
to:
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• detect and deter money laundering and terrorism financing;
• to maintain and enhance New Zealand’s international reputation by adopting, where
appropriate in the New Zealand context, recommendations issued by the Financial
Action Task Force; and
• to contribute to public confidence in the financial system.
Accordingly, the Act facilitates cooperation among reporting entities, AML/CFT supervisors,
and various government agencies, in particular law enforcement and regulatory agencies.
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Section 156A of the Act contains a requirement for the Ministry of Justice to review the
operation of the Act and consider whether any amendments are required. This review must
commence no later than 1 July 2021 and must be completed by no later than 30 June 2022.
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The overall objective of this review is to assess the operation of the AML/CFT Act and
associated legislative instruments1 so that New Zealand becomes the hardest place in the
world for money laundering, terrorism financing, and financing the proliferation of weapons
of mass destruction. In doing so, the AML/CFT regime will help maintain a safe, trusted, and
legitimate economy.
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1 This will include all AML/CFT Regulations as well as any Codes of Practice and Class Exemptions
issued under section 157 of the Act.
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3. Role of the IAG
To support the Statutory Review process, the Ministry of Justice has established an IAG
with representatives from key industry stakeholders and peak bodies from across the
AML/CFT regime. The IAG has been established to assist the Ministry and other AML/CFT
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agencies2 in conducting the review.
The role of the IAG is to:
• Provide advice to officials on the issues and topics that members think are
necessary to ensure an effective and comprehensive review of the Act and the
broader regime; and
• Review and provide feedback to officials on draft material before it is released for
general or targeted consultation.
The IAG is a time-specific entity that is intended to cease functioning at 1 July 2022
(following the conclusion of the review), unless otherwise advised.
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4. Guiding principles
The IAG is committed to:
• working together with integrity to achieve the IAG’s role;
• sharing knowledge and expertise with IAG members and officials;
• free and frank exchange of views and ideas; and
• maintaining confidentiality.
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5. Authority and accountability
The IAG is not a decision-making body. Accountability and authority for decision-making for
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the review resides with Ministers and government agencies.
6. Frequency and mode of meetings
Meetings will be timed to coincide with milestones in the project to enable the IAG to fulfil its
stated role. The intention is to allow for flexibility in how and when they are scheduled while
being mindful of the workload and time commitments for members. Meetings are intended
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to be conducted through Microsoft Teams, with members videoconferencing to participate.
2 Department of Internal Affairs, Financial Markets Authority, Reserve Bank of New Zealand, New Zealand
Police, New Zealand Customs Service, and the Ministry of Business, Innovation and Employment.
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Meetings will ordinarily be expected to take between one and three hours. Meetings will be
hosted and moderated by the Ministry of Justice, with some or all of the other AML/CFT
agencies also in attendance.
7. Anticipated workload and time commitment
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The estimated workload for the IAG is approximately 5-10 hours per month. This time
commitment assumes approximately one to three hours of meetings per month (possibly
spread across multiple dates) as well as time to review material and provide comment.
8. Travel policy and reimbursement of expenses
Where meetings are attended in person, the Ministry of Justice will pay reasonable
domestic travel costs for participating in the IAG meetings, as set out in the attached travel
policy, attached as Appendix 1. The requirements below are consistent with government
agency travel policies. The Ministry of Justice will not pay for any international travel costs.
The Ministry wil pay IAG members’ actual and reasonable expenses incurred in relation to
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any IAG meetings, as set out in Appendix 2.
9. Financial Gain and Confidentiality
All information and material IAG members receive must be kept confidential and not
disseminated further until the review is concluded, unless otherwise notified.
Prior to the review being finalised, IAG members are not to use the knowledge or benefits
from being members of the IAG for financial gain.
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10. Conflicts of interest
IAG members are participating as individual experts and professionals rather than
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representatives of their organisations. Membership in the IAG does not restrict the ability of
members to:
• provide advice to third parties, provided that advice is not based on confidential
information obtained in their position as IAG member; or
• otherwise participating in the review, including as a representative of their
organsiation or through any professional body, as appropriate.
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IAG members should notify the Ministry of Justice as soon as possible of any potential
conflict of interest they may have that may impact their ability to contribute to and/or
participate in the IAG.
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11. Communication
The Ministry of Justice will be responsible for all public communication about IAG’s role and
work. All questions from the media and other such request for information should be
referred to:
[email address]
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12. Personal and official information
The Ministry of Justice will hold any personal information in accordance with the Privacy Act
2020. The Privacy Act 2020 establishes certain principles with respect to the collection, use
and disclosure of information about individuals by various agencies, including the Ministry of
Justice. Any personal information supplied in the course participating in the IAG only be
used for the purpose of supporting the operation of the IAG.
Any advice received by the Ministry of Justice or other Government agencies from IAG
Members will become official information. The Ministry of Justice may be required to release
all or part of the information received as a result of a request made under the Official
Information Act 1982, unless there is a suitable ground to withhold information that
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outweighs the public’s interest in that information.
13. Agreement
I agree to comply with the above Terms of Reference and join as a member of the Industry
Advisory Group.
Signature:
_______________________________
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Name:
Date:
/ / 2021
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Appendix 1: Travel policy
The Ministry of Justice will pay reasonable domestic travel costs for participating in the IAG
meetings, as set out below. The requirements below are consistent with government
agency travel policies.
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Booking travel
IAG members are responsible for booking their own travel to attend the IAG meetings (and
if necessary, for the purpose of attendance at the IAG meetings, their own accommodation).
Actual and reasonable expenses incurred in attending the IAG meetings will be reimbursed
by the Ministry of Justice (the Ministry) – refer to section on ‘Reimbursement of Expenses’
below.
Airfares
Flights should be booked as far in advance as possible at the best available fare.
Flights to and from main centres should be fixed and not fully-flexible. Flights for
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participants returning from Wellington (after the IAG meetings) to smaller regional centres
(i.e. outside the main centres), may be fully-flexible.
We suggest that members avoid changes to travel arrangements wherever possible. If
changes to members’ travel arrangements are necessitated by the actions and/or
requirements of the Ministry, the Ministry will reimburse the costs associated with making
those changes. If changes to travel arrangements are for members’ personal convenience,
the members themselves will be required to cover the cost of those changes.
Accommodation
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Accommodation must be for the purpose of attendance at the IAG meetings (for example, in
some cases accommodation the night before a meeting may be necessary to ensure arrival
at the designated start-time for the IAG meetings).
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Where accommodation is necessary for the purposes of attendance at the IAG meetings, a
per night accommodation expenditure cap of $200.00 (including GST) should not be
exceeded.
Meals and incidentals
Refreshments will be provided at the IAG meetings.
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Where it is necessary for members to stay in Wellington overnight (either before or after a
meeting), valid expenses for meals and incidentals (outside the IAG meetings) will be
reimbursed on an actual and reasonable basis. Expenses for meals and incidentals must
be at a reasonable level. The cost of alcohol will not be reimbursed.
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Taxis
Taxi fares incurred for the purpose of attendance at the meetings will be reimbursed on an
actual and reasonable basis.
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Mileage
Mileage incurred for the purpose of attendance at the IAG meetings will be reimbursed on
an actual and reasonable basis, at the rate of 73 cents per kilometre.
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Appendix 2: Reimbursement of Expenses
Actual and reasonable — expenses
The Ministry will pay IAG members’ actual and reasonable expenses incurred in relation to
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any IAG meetings, provided that:
a.
the expense is charged at actual and reasonable cost, and
b.
the claim for expense is supported by GST receipts.
Invoices
IAG members must send the Ministry one invoice for all the charges relating to the meetings
at the end of the month, for attendance to the satisfaction of the Ministry during that
month. This should include confirmation of the time and date of the meeting(s) attended.
The IAG members must include the following references on their invoices to the Ministry:
Ref No:
M75103
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Attn:
Brendan Gage,
19 Aitken Street,
Wellington
Please send through any invoices relating to this service to
[email address] and
[email address]
Please ensure the following matters are covered in the invoices:
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1. The words “tax invoice”.
2. Name and GST number of the supplier.
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3. The date the invoice was issued.
4. A clear description of the goods/services supplied
5. The total amount to pay.
6. A statement that GST is included.
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IAG – 1
Introduction - Meeting
10 June 2021
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1. Introduction to the Statutory Review:
a. The Ministry has briefed our Minister on the outcome of the MER;
b. The Ministry has advised the expected outcomes from the statutory review process
(including that we can engage in early regulatory change working in paral el to the
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legislative review). Early regulatory change can include clarifying the scope and
addressing compliance headaches, ensuring that we are capturing what is required
by the FATF. The Minister has agreed to ‘receive advice’ as a result of this process;
c. The Minister is open and engaged with issues to AML/CFT issues broadly.
2. The Ministry of Justice would like the IAG to support the review. However, we are open to
discussion about how the IAG would add value to the statutory review. Some key questions
we would like to discuss are:
a. How often would the IAG like to meet, and in what format?
b. What other specific resources can the IAG bring to the review?
3. Thoughts from IAG members:
a.
Format of the IAG. Some members (Lloyd Kavanagh / Ross Carter Brown / Clyde
Peterson / Richard) suggested that there is benefit to having a meeting the ful size of
the IAG, however creating sub-groups wil be more agile in progressing issues.
b. Issues that the IAG would like to provide input into. These include:
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i. Janine, Easy Crypto: How vulnerable communities are affected by the
AML/CFT Act. For example, should the Act have 6 – 8 principles that we can
use the Act through those lenses.
ii. Lloyd Kavanagh, MERW: The purposes of balancing the objectives in the
regime with the need for financial inclusion.
iii. Lloyd Kavanagh: The impact of innovation in FinTech.
iv. Ross Carter-Brown: How different members users of the AML/CFT are
impacted.
v. Ross Carter-Brown: What are the varied approaches of different
jurisdictions?
vi. Ross: Ross – There are a lot of parts of the Act that are vestiges of the pre-
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internet age. There could be a number of improvements that are more
appropriate for the current technological client. Al owances should be made
for this type of improvement. Simon: following on from this, are we going to
create a regime that is flexible and allows for change in technology.
vii. Alfred, TAB: the government didn’t think about what they could do to shape
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the framework when the AML/CFT Act was implemented. In particular, what
the privacy culture and expectations of New Zealanders’ is. Has the
government over prioritised satisfying the FATF requirements, without looking
at the effectiveness of things.
viii. Simon Haines: recommend carrying out a survey of population to ascertain
costs and see what the industry pain points are. More information to
businesses about what information is useful to the Police/enforcement
agencies.
ix. Bridget: we need more prescriptive information about how to apply the Act in
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certain circumstances.
c. The IAG discussed the Terms of Reference:
i. Richard Abel: The AML/CFT Act review has a purpose of ‘becoming the
hardest place for ML/TF.’ The problem is, it is the most expensive place in
the world to do business. There has to be a way to make it more efficient.
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ii. Marvin: Important to ensure that we don’t have bad-actors. Need to ensure
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that this is an attractive place to do business and the impact of the review is
positive.
iii. Gary Hughes Barrister: These purpose statements could be useful y
expanded to incorporate the perspective of this group.
iv. Gary: useful to look at the exemptions process.
v. MOJ: Important that the Terms of Reference do not pre-suppose discussion
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points.
d. Other perspectives were also raised by MOJ
i. What is the right balance between risk based approach and prescription?
ii. Should there be more codes of practice and interpretation guides?
iii. What approach enables better outcomes for the Sector?
iv. How should we ask questions so that we can ensure we get ful responses?
4. The Ministry of Justice has prepared a draft consultation document, that wil be released
publicly. The Ministry is interested in obtaining the views of the IAG before this is released.
Consultation document is quite long, and the Ministry is flexible on how the IAG want to
engage in it. When reviewing the document, keep in mind how industry wil engage with it.
The information provided is confidential until it goes to cabinet on 11 August.
a. IAG comment:
i. Andrew: Is there an opportunity to provide further feedback when it is out for
consultation?
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ii. Alfred: it is important to locate and review the original submissions to the
Select Committee.
iii. Karen McWil iams: some IAG members wil provide more personal views, but
that is the nature of discussion.
iv. Gary: Domestic PEPs issue, and are there any other issues that the Minister
has indicated is off limits?
v. Simon: What is the level of confidentiality?
b. Action points:
i. The Ministry will circulate the Terms of Reference and discussion document
and provide further information about the timeframes for the review.
ii. Submitters wil circulate feedback on the document (if they want to) to
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encourage discussion.
iii. The Ministry wil set up a couple of in-person meetings.
5. Lastly, the Ministry has received an OIA requesting the release of information that includes
names of stakeholders to the IAG. If any members of the IAG had any issues with that course
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of action they are to contact the Ministry separately.
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AML/CFT Act Statutory Review – Industry Advisory Group Members
Name
Organisation
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Abel, Richard
Accounting and Taxation Centre Nelson
Arbab, Dilawar
Orbit Remit
Bennett, Mark
Victoria University Wellington
Bergin, Tim
Christchurch Casino
Boyd, Alfred
TAB
ACT
Carter-Brown, Ross
Bitprime
Caskey, Judith
Citi
Cox, Anne
NBS
Dilly, Martin
Martin Dilly AML
Hall, Fiona
Fiona Hall Law
Flood, Mark
ANZ
Geary, Sam
ASB
Grainger, Janine
EasyCrypto
Grimsey, Sharon
MTF Finance
Haines, Simon
Nikko Asset Management
Haughey, Chris
SkyCity
Hughes, Gary
Gary Hughes Barrister
Hunt, Adam
Clavis
Kavanagh, Lloyd
MinterEllisonRuddWatts
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Kilpin, Richard
Financial Services Council
Le Quesne, Katherine
Kiwibank
MacDonald, Bridget
Securities Industry Association
Madison, Trish
Accounta
Milne, Paula
Paula Milne Consulting
McMorran, Lyn
Financial Services Federation
McWilliams, Karen
CA ANZ
Ogilvie, Angus
Generate Accounting
Pederson, Clive
Heartland Bank
Ping, Anna
MUFG Bank OFFICIAL
Proud, Jo
MUFG Bank
Purdon, Geoff
Grand Casino
Robson, Phil
Credit Union Baywide
Rybakova, Anna
Bitprime
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Shanks, Katrina
Financial Advice NZ
Simons, Neil
Latitude Financial
Sims, Alex
University of Auckland
Steed, Greg
Institute of Certified New Zealand Bookkeepers
Stephens, Angela
Westpac
Stockdale, Mark
Motor Industry Association
Tregunna, Alice
TICC.NZ
Toal, Mark
ASB
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Yee, Marvin
Crown Financial
Young, Andrew
BNZ
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