NZ Overhauls AML Laws to Ease Burden on Small Businesses and Target Crime

In a major reform to New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) framework, the Government has announced sweeping changes that aim to strike a better balance between protecting the financial system and easing compliance burdens on everyday businesses and families.

Associate Justice Minister Nicole McKee confirmed Cabinet’s approval to begin drafting the Anti-Money Laundering and Countering Financing of Terrorism (Omnibus) Amendment Bill, which will modernize the country’s approach to financial crime prevention while making the system more proportionate, risk-based, and practical — particularly for small, low-risk entities.

A Smarter, Risk-Based Approach

Under the current AML/CFT laws, even low-risk transactions by small businesses or professionals such as real estate agents, bookkeepers, and share brokers are subjected to time-consuming and complex customer due diligence (CDD) checks. This has resulted in increased costs, lost time, and frustration for thousands of law-abiding New Zealanders.

“This level of scrutiny is overkill for a small business dealing with law-abiding New Zealanders,” said Minister McKee. “Our AML laws need to be smarter and more risk-based.”

The upcoming reforms will enable simplified CDD procedures when a business can demonstrate that the money laundering or terrorism financing risk is low and appropriate controls are in place. This means businesses can reduce the information they collect from customers, saving time and lowering administrative costs — without compromising public safety.

Real-World Impacts: Families, Trusts, and Small Towns

One of the most common pain points addressed by the reform involves property sales held in family trusts. Currently, families selling a home are often required to submit extensive legal and personal documentation — even in low-risk scenarios, such as a property being owned for over a decade by a non-trading trust.

With the new rules, real estate agents will only need to verify trustee identities and retain a copy of the trust deed, removing the need for exhaustive documentation when risk is clearly minimal.

Similarly, bookkeepers, lawyers, and financial professionals working in small towns or with low-risk clients — such as elderly individuals or small rural businesses — will be allowed to streamline compliance procedures, especially when transaction limits and other safeguards are in place.

Helping Everyday Kiwis

The bill also proposes simplified procedures for everyday financial needs, including:

• Opening children’s bank accounts

• Using digital wallets

• Simplifying account creation for bereaved spouses or elderly individuals without standard documentation

Minister McKee highlighted cases where parents struggled to set up savings accounts for their children due to proof-of-address requirements, and elderly people unable to open accounts following a spouse’s death because they lacked specific ID documentation.

“That’s not a system based on risk — that’s bureaucracy getting in the way of people’s lives,” McKee stated.

Enhanced Powers to Target Financial Crime

While reducing red tape for legitimate users, the reforms also include new enforcement tools to target illicit activity:

• Imposing a $5,000 cap on international cash transfers

• Banning crypto ATMs, a known vulnerability exploited by criminal organizations

• Introducing new supervisory powers for improved monitoring and enforcement

• Enabling a dedicated national AML/CFT supervisor to issue clear, accessible guidance to industry sectors

“Since 2019, the global financial landscape has shifted dramatically,” McKee said. “New Zealand is overdue for a modern national strategy — one that protects against organised crime while also making compliance easier for those doing the right thing.”

Road to a World-Class AML Regime

The Government’s goal is clear: to make New Zealand the safest place in the world to do legitimate business, and the hardest for criminals to operate. The reform package is part of a broader push to modernize regulatory frameworks and improve New Zealand’s international financial reputation.

“We’re serious about targeting criminals, not clogging up legitimate businesses and everyday people with red tape,” said McKee.

Once enacted, the Omnibus Amendment Bill will form the cornerstone of a next-generation AML/CFT regime that is efficient, fair, and uncompromising in its pursuit of financial crime.