AML/CFT Amendment Bills 2026
Significant amendments to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (Act) have passed their third reading in Parliament. These bills are:
Anti-Money Laundering and Countering Financing of Terrorism Amendment (AML/CFT) Bill available here.
Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill available here.
This post assesses some of the changes and how they will impact reporting entities.
Immediate changes
Trust clients - This amendment is somewhat convoluted. It does not remove trust-type customers from the prescribed trigger in section 22 of the AML/CFT Act. Instead, it provides that reporting entities are no longer required to collect source of wealth and source of funds information for a trust-type customer where they are satisfied that the relevant risks are adequately mitigated through standard customer due diligence (CDD). Further guidance from the Department of Internal Affairs (DIA) is likely follow. At present, my view is that trusts assessed as low or medium risk will generally not need to undergo enhanced CDD procedures.
Politically exposed persons (PEPs) – The Bill adds the words “according to the level of risk involved” to the obligation to take reasonable steps to determine whether a customer or beneficial owner is a PEP. As with the trust amendments, further guidance from the DIA is expected. In the meantime, my view is that reporting entities should adopt a risk-based approach, prioritising formal PEP checks for individuals holding foreign passports and for customers with suspected or known PEP exposure.
Record keeping – Where a reporting entity is required to produce records in response to a notice under the AML/CFT Act, the records must be provided:
As soon as possible, where the DIA (or another requesting agency) considers the matter urgent and expressly states in the notice that the records must be produced as soon as possible; or
In all other cases, by the date specified in the notice, or, if no date is specified, within 20 working days.
This amendment was introduced to address uncertainty around what constitutes a reasonable timeframe for producing records. However, it does not clarify the meaning of “as soon as possible,” which may continue to create uncertainty in urgent cases.
Changes starting on the 1st of July
Expanded DIA powers – In addition to its existing powers to require the production of, or access to, records, documents, and information relevant to AML/CFT compliance, and to conduct on-site inspections, the DIA will also be able to require any person whom it reasonably suspects has knowledge of a possible contravention of the AML/CFT Act to attend a meeting (including by audio or audio-visual link). During that meeting, the DIA may require the person to:
answer questions relating to a reporting entity’s records or documents; and
provide any other information the DIA considers necessary or desirable.
Power to enter dwellinghouses – The DIA must not enter a dwellinghouse to conduct an on-site inspection unless it has either the consent of the occupier or a warrant.
Levy – The Bill introduces a levy that will apply to reporting entities. The detailed structure, calculation methodology, and payment arrangements will be set out in regulations. The proposed options are detailed in this Consultation Paper, and I discuss more about it in my article for the National Business Review (paywalled).
One supervisor model – The Bill confirms the move to a single-supervisor model, under which the Department of Internal Affairs will become the AML/CFT supervisor for all reporting entities.
What’s next?
Get in touch if you have any questions.
