New Zealand’s Travel Rule: What VASPs Need to Know
On 1 June 2024, New Zealand implemented amendments to its Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Regulations 2011, significantly affecting how virtual asset service providers (VASPs) must operate. These amendments align the country with the Financial Action Task Force’s (FATF) Travel Rule.
The updated regulations redefine wire transfers to include virtual asset transactions, classify them as international wire transfers, and impose specific data-sharing and reporting requirements on VASPs operating within or engaging with New Zealand.
Understanding the Regulatory Obligations for Virtual Asset Service Providers
With the rising adoption of virtual assets globally, jurisdictions are tightening their regulatory frameworks to manage associated financial crime risks. In alignment with international best practices, New Zealand has incorporated virtual asset transfers into its AML/CFT regime, introducing a new compliance reality for VASPs.
Scope of the Travel Rule in New Zealand
The updated regulations in New Zealand expand the definition of wire transfers to include virtual asset transfers, which are now treated as international wire transfers for compliance purposes. While the term VASP is not explicitly defined in legislation, the scope aligns with the FATF’s interpretation.
These regulations apply to any entity engaged in activities such as accepting deposits from the public, transferring value on behalf of customers, issuing or managing payment instruments, currency exchange, or the safekeeping and administration of virtual assets.
This includes virtual asset exchange platforms, custodian wallet providers, virtual asset brokers, token or ICO issuers, and financial institutions offering crypto services alongside fiat-based operations.
Supervision of VASPs primarily falls under the Department of Internal Affairs (DIA), although the Financial Markets Authority (FMA) may also conduct oversight, depending on the services provided.
Compliance Obligations for VASPs
New Zealand’s Travel Rule sets a compliance threshold at NZD 1000, establishing distinct obligations for VASPs based on transaction value.
Originator VASPs, which initiate transfers on behalf of customers, must identify and verify the originator’s identity for transactions equal to or above NZD 1000, collecting and transmitting specific information (specified below).
For transactions below the threshold, originator VASPs must transmit the same data without verification, unless suspicious activity is suspected under section 39A of the AML/CFT Act.
All international transactions over NZD 1000 require submission of an International Funds Transfer Prescribed Transaction Report (IFT-PTR) to the Financial Intelligence Unit (FIU) within 10 working days via the goAML system.
Beneficiary VASPs, which receive the transferred funds, must apply risk-based procedures to detect incomplete Travel Rule data, evaluate suspicious activity where applicable, and submit IFT-PTRs for qualifying transactions.
Intermediary VASPs, involved in the transfer process but not as the originator or beneficiary, must promptly forward all Travel Rule data and establish internal policies to detect and manage incomplete information.
Required Travel Rule Data
Originator’s full name,
Originator’s account number,
and either the originator’s postal address, national identity number, customer identification number or place and date of birth,
Beneficiary’s full name,
Beneficiary’s account number, or any unique transaction reference associated with them.
For transactions under NZD 1000, the originator VASP must ensure that the following information accompanies each wire transfer:
Originator’s full name,
Originator’s account number or other identifying information that allows the transaction to be traced back to the originator,
Beneficiary’s full name,
Beneficiary’s account number or the beneficiary’s unique transaction reference number.
In Conclusion
New Zealand’s implementation of the Travel Rule underscores its commitment to global financial integrity and positions the country as a proactive regulator in the virtual asset space. Under the new requirements, VASPs must act promptly to review and update their compliance frameworks.
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Further Reading
New Zealand Travel Rule Regulation Breakdown
