NZ Government Advances AML Reform to Target Crime and Cut Business Red Tape

In a significant move to reinforce New Zealand’s stance against financial crime while easing regulatory burdens for law-abiding businesses, Associate Justice Minister Nicole McKee today announced a new wave of reforms under the Government’s ongoing overhaul of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) regime.

The reforms, approved by Cabinet, include a forthcoming amendment bill to strengthen enforcement powers, tighten international cash transfers, regulate digital asset risks, and empower the Financial Intelligence Unit (FIU) to better monitor and disrupt illicit financial activity. These measures form part of a broader government strategy aimed at building a smarter, more agile financial crime framework in line with global standards.

“This Government is serious about targeting criminals, not tying up legitimate businesses in unnecessary red tape,” said Minister McKee. “We’re striking a balance—relieving compliance burdens where appropriate, while enhancing our ability to bring criminals to justice.”

New Enforcement Tools and Financial Sanctions Regime

The bill will bolster enforcement authority for both the New Zealand Police and AML/CFT regulators, enabling more proactive investigations and enforcement against non-compliant actors. A key feature is the creation of a new financial sanctions supervisory regime, designed to improve New Zealand’s ability to implement and monitor international sanctions effectively.

“This is about improving system integrity—ensuring our AML laws keep pace with evolving criminal tactics and international expectations,” McKee noted.

A major component of the proposal includes giving the FIU enhanced powers to compel ongoing access to financial information. Specifically, the FIU will be able to require banks and other reporting entities to routinely provide relevant intelligence on persons of interest. This will include both transactional data and contextual financial activities, greatly improving real-time insight into suspicious behaviour.

Targeting International Transfers and Crypto Assets

Among the high-impact reforms is the introduction of a $5,000 upper limit on international cash transfers, aimed at making it harder for organised crime groups to move illicit proceeds offshore.

Additionally, the Government will ban cryptocurrency ATMs, which have been increasingly exploited by criminals to convert illicit cash into digital assets that are harder to trace.

“These changes will close important loopholes and modernise how we tackle high-risk activities,” said McKee. “We’re sending a clear message: New Zealand is not a safe haven for financial crime.”

Reducing Burdens on Low-Risk Clients and Businesses

While enhancing enforcement, the reforms also aim to deliver meaningful regulatory relief to compliant businesses. Two amendment bills already before Parliament seek to remove some of the most burdensome AML/CFT compliance requirements, and are expected to pass into law before the end of 2025.

Key business-friendly reforms include:

• Removing address verification for many lower-risk clients

• Easing due diligence obligations for lower-risk trusts

• Simplifying reporting thresholds and obligations for low-risk financial activity

“These are the types of practical solutions that the business community has asked for, and we’re listening,” McKee said. “It’s not about dropping standards—it’s about applying them intelligently.”

A Smarter, Risk-Based Strategy with Industry Input

To ensure a balanced and well-informed approach, the Government will launch a targeted consultation with industry stakeholders to help shape a new national AML/CFT strategy and design a sustainable funding levy to support ongoing system improvements.

This feedback will also help shape the implementation of compliance relief measures, ensuring resources are directed toward areas of highest risk, rather than trapping businesses in administrative burdens for low-risk activities.

“We want New Zealand to be one of the easiest places in the world to do legitimate business—and one of the hardest for criminals to hide,” McKee said.

Context: Evolving Threats and Global Pressures

The overhaul comes amid a changing global financial and regulatory environment. Since 2019, rapid developments in digital finance, international money flows, and criminal typologies have placed pressure on traditional AML frameworks. With peer countries evolving their systems, New Zealand must stay aligned to avoid being perceived as a weak link in the global financial system.

Minister McKee emphasized the urgency of building a system that is flexible, intelligence-driven, and able to respond to both domestic and international financial crime threats—from fraud and drug trafficking to terrorist financing.

Looking Ahead

The Government’s strategy marks a significant evolution of New Zealand’s AML/CFT regime. With a focus on smarter compliance, stronger enforcement, and targeted oversight, these reforms seek to protect the integrity of the financial system while giving honest businesses the room to grow.

Stakeholder consultations on the new framework are set to begin shortly, with legislative and operational changes expected to roll out progressively over the coming year.