New Zealand Simplifies AML/CFT Customer Due Diligence Requirements

Significant changes to New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act) are now in force, following the passage of the Statutes Amendment Bill through its third reading on Tuesday, 18 November.

The Bill amends 41 Acts in total, but one of the most impactful changes for reporting entities is the simplification of customer verification requirements under the AML/CFT regime.

Address Verification No Longer Required for Standard CDD

Under the amended AML/CFT Act, verifying a customer’s address is no longer required as part of standard customer due diligence (CDD).

This change applies to:

• Customers
• Beneficial owners
• Persons acting on behalf of a customer

Previously, reporting entities were required to verify both identity and address as part of standard CDD. The removal of the address verification requirement is intended to reduce compliance burden and streamline onboarding processes, particularly for low-risk customers.

Importantly, this change does not apply to enhanced customer due diligence (EDD). Where EDD is required — such as for higher-risk customers, politically exposed persons, or certain complex transactions — address verification remains mandatory.

Extended Timeframes for Reporting Obligations

The amendments also introduce more practical reporting timeframes for certain AML/CFT obligations:

• Prescribed Transaction Reports (PTRs) The deadline for reporting PTRs has been extended from 10 to 20 working days (Clause 12, amending section 48A(1)).
• Suspicious Activity Reports (SARs) for Law Firms Law firms now have up to 5 working days, increased from 3, to submit a SAR to the Financial Intelligence Unit (Clause 11, amending section 40(3)).

These extensions recognise operational realities and aim to improve report quality without undermining the effectiveness of the AML/CFT regime.

Clarification of “Occasional Transactions”

The definition of “occasional transaction” has also been clarified. The amendments confirm that cheque deposits made at a registered bank or non-bank deposit taker are excluded from the definition (Clause 9, amending section 5).

This clarification removes ambiguity and ensures that routine cheque deposits are not inadvertently captured by AML/CFT obligations intended for higher-risk, one-off transactions.

What Reporting Entities Should Do Next

Reporting entities should:

• Review and update AML/CFT policies and procedures to reflect the removal of address verification for standard CDD
• Ensure staff understand when address verification is still required under EDD
• Update internal reporting timelines for PTRs and SARs
• Consider whether onboarding processes, forms, and systems need adjustment

The amendments are already in effect, so organisations should act promptly to ensure ongoing compliance.

Further Information

More information about the Statutes Amendment Bill is available through official government channels. For specific questions about these AML/CFT changes, reporting entities can contact the Department of Internal Affairs at amlcft@dia.govt.nz.