New Zealand has not yet implemented the Financial Action Task Force's (FATF's) recommendations for virtual asset service providers (VASPs). However, it has issued a consultation, and the document is currently open for comments.
What is the scope of the Travel Rule in New Zealand?
As per the Review of the AML/CFT Act, part 2, page 27: "Businesses that provide one of the five types of virtual asset activities identified by the FATF:
1. exchanging between virtual assets and fiat currencies (e.g. New Zealand Dollars);
2. exchanging between one or more forms of virtual assets;
3. transferring (i.e. conducting a transaction on behalf of a person that moves a virtual asset from one virtual asset address or account to another) virtual assets;
4. safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets, and;
5. participation in and provision of financial services related to an issuer's offer and/or sale of a virtual asset."
New Zealand considers that the existing definition of a financial institution is sufficiently broad to capture the first, second, third, and fifth virtual asset activity. Nevertheless, the Government is now requiring advice if it should extend obligations to wallet providers which only provide safekeeping or administration of virtual assets.
Who is the supervisory body for VASPs in New Zealand?
Currently, there are three supervisory bodies, namely:
The Financial Markets Authority (FMA) supervises a range of businesses, including issuers of securities, licensed supervisors, derivatives issuers, managed investment scheme managers, client money or property service providers, equity crowdfunding platforms, peer-to-peer lending providers, discretionary investment management services and certain financial advice providers,
The Reserve Bank of New Zealand (RBNZ) supervises registered banks, life insurers, and non-bank deposit takers,
The Department of Internal Affairs (DIA) supervises casinos, non-deposit taking lenders, money changers, DNFBPs and high-value dealers, and other reporting entities/financial institutions that are not covered within the sectors supervised by the FMA or the RBNZ.
What is the Travel Rule threshold in New Zealand?
When do you need to comply with the Travel Rule in New Zealand?
The consultation period will be closed in 2022, and the final report is planned for the end of June 2022. There is thus no obligation to comply yet. However, you may need to have a solution in place when interacting with other obliged entities located in countries where the Travel Rule has been implemented.
Have a plan in place, and start interacting with the right providers that can help you comply with the travel without impairing your customer relationship.
What are the FMA's requirements for Travel Rule information to be exchanged?
What to do below the threshold:
The New Zealand Government is consulting to know if they should issue regulations to require that international wire transfers below NZD 1000 are accompanied by specific information about the originator and beneficiary. The information would not need to be verified for accuracy unless there is a suspicion of money laundering or terrorism financing.
Information to be exchanged - sections 27 and 28 of the AML ACT:
originator's full name; and
originator's account number or other identifying information that may be prescribed and allows the transaction to be traced back to the originator; and
one of the following:
originator's national identity number,
originator's customer identification number,
originator's place and date of birth; and
beneficiary's name and account number or any unique transaction reference that allows the transaction.
What else do you need to know about the Travel Rule in New Zealand?
The New Zealand Government is also consulting to know if they should have a specific AML/CFT registration and/or licensing regime.
Which regulations are applicable to the Travel Rule in New Zealand?
The Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009: https://www.legislation.govt.nz/act/public/2009/0035/latest/whole.html
Consultation paper: https://consultations.justice.govt.nz/policy/aml-cft-review/user_uploads/amlcft-statutory-review-consultation-document.pdf