New Zealand recasts AML/CFT rules for reporting entities.
New Zealand has introduced the fourth and final stage of its anti-money laundering reform programme. The Anti-Money Laundering and Countering Financing of Terrorism (Omnibus) Amendment Bill was introduced to Parliament on 1 September 2026, following earlier changes that removed mandatory address verification, eased source of wealth checks for family trusts and consolidated AML/CFT supervision under the Department of Internal Affairs.
For businesses across financial services, real estate, legal and accounting, the Omnibus Bill would loosen some compliance requirements while introducing new obligations around sanctions and group reporting.
More flexibility in customer due diligence
The Omnibus Bill would allow reporting entities to apply simplified customer due diligence wherever they reasonably assess a customer relationship as low risk, extending this option to all large and public entity companies and all Financial Markets Conduct reporting entities. Reporting entities would also gain more discretion over the information they collect and verify, with standard due diligence applying again once the circumstances supporting the simplified approach no longer exist.
The Bill applies the same shift towards flexibility to enhanced due diligence, narrowing several of its triggers. Trusts would no longer automatically require enhanced checks, and high-risk country triggers would be confined to jurisdictions subject to a Financial Action Task Force call for action. Source of wealth or source of funds verification would also no longer be mandatory in every case.
New sanctions duties and reporting groups
The Omnibus Bill brings compliance with specified United Nations targeted financial sanctions into the AML/CFT framework for the first time, requiring reporting entities to assess and mitigate sanctions risk through their existing risk assessments and programmes. New Zealand’s separate Russia sanctions regime remains outside this framework.
Designated business groups would also be replaced by mandatory and voluntary reporting groups. Certain related entities, including international corporate groups with regulated AML/CFT businesses, would be required to report as a group, while others could opt in voluntarily. Each mandatory group would need a lead entity and a group-wide programme with shared policies and information-sharing arrangements.
What businesses should watch for next
The proposed changes would give reporting entities more flexibility in how they apply due diligence, but that flexibility depends on having appropriate risk assessments and internal policies to support it. The Bill also expands enforcement powers and increases penalties for non-compliance, so the overall effect is a trade-off rather than a straightforward reduction in compliance work.
The Omnibus Bill remains subject to the parliamentary process and its requirements could change before enactment. The Council of Financial Regulators expects passage in the second half of 2027, with the changes coming into force one year after Royal assent if enacted.
