The Government has announced that it will introduce to Parliament the Anti-Money Laundering and Countering Financing of Terrorism (Omnibus) Amendment Bill (the Bill).  Following the other significant amendments, this is the fourth and final bill in the Government's overhaul of the AML/CFT regime (see our article here for the other amendments).

The Bill aims to ease regulatory burdens on businesses, bring New Zealand's regime into closer step with international expectations and standards, and to provide authorities with improved intelligence and enforcement tools to pursue organised crime.

In addition to the Bill, the Government has released the Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Amendment Notice 2026 (Amendment Notice).  While the Amendment Notice retains many of the current class exemptions, certain notable exemptions will not be reissued.

What is changing in the Omnibus Bill?

The Bill introduces the following changes:

  • A more flexible approach to due diligence: Reporting entities will have greater autonomy to apply simplified or enhanced customer due diligence (ECDD) based on their own risk assessments, with more flexibility where the risk of money laundering or terrorism financing is low.  The Bill will recalibrate ECDD rules, with the automatic trigger for trusts being removed in some situations, while ECDD will become mandatory for customers based in jurisdictions flagged by the Financial Action Task Force as high-risk.  In addition, the Bill will require reporting entities, when conducting ECDD, to obtain and take reasonable steps to verify any information which is necessary to mitigate the risk of money laundering and terrorism financing, having regard to their risk assessment.

  • Bringing sanctions compliance into the regime: The Bill intends to align New Zealand with international expectations by creating a formal framework for supervising how reporting entities comply with United Nations Security Council targeted financial sanctions.  It places new obligations on reporting entities to assess and manage sanctions-related risk and expands the roles of the AML/CFT supervisor and the Police Financial Intelligence Unit (FIU) in overseeing this.

  • Restructuring reporting groups: The Bill will replace designated business groups with mandatory and voluntary reporting groups.  Entities in a mandatory group must run a shared AML/CFT programme across the group, giving a consistent view of risk and closing gaps criminals might otherwise exploit.  Both models require the group to nominate a lead entity responsible for coordinating shared risk assessments and policies.

  • Enhanced enforcement: The Bill gives the FIU stronger powers, including the power to obtain information from non-reporting entities and the ability to apply to an issuing officer, such as a judge or Justice of the Peace, to approve the rapid, temporary freezing of high-risk transactions and accounts.

  • New controls on cash, remittances and virtual assets: The Bill will outright prohibit cash purchases or sales of virtual assets above a set threshold, as well as money or value transfer services accepting cash above a threshold where the money is destined overseas.  The Bill also opens the door to regulating cash dealings in remittance services and virtual assets such as cryptocurrency, though the Ministry of Justice has committed to consulting affected businesses and users before the regulations are made.

  • Other changes: These include disapplying ECDD obligations where this could result in tipping off the subject of a suspicious activity report, renaming "audits" of risk assessments and AML/CFT programmes to "independent evaluations" and changes to offences provisions, amongst others.

What changes will the Amendment Notice make?

The Amendment Notice largely retains the current class exemptions, with some minor changes, except for five class exemptions that have not been reissued and will expire on 31 December 2026.  The expiring class exemptions relate to licensed managing intermediaries, specified managing intermediaries, casino loyalty schemes, issuers of debt securities to specified subscribers through intermediaries and transactions of tax pooling intermediaries.

Our view of the AML/CFT reforms

The impact of the Bill on reporting entities will cut both ways: useful flexibility on due diligence for lower-risk customers, but materially higher penalties, new offences, and (for those caught by the mandatory reporting group model) possibly a new layer of group-wide compliance obligations.  Entities would be well placed to start reviewing their risk assessments, AML/CFT programmes and group structures now, ahead of the Bill's passage and the one-year lead-in to commencement, and to watch for the Ministry of Justice's expected consultation on cash and virtual asset rules in early 2027.

Reporting entities relying on existing class exemptions should assess the impacts of the Amendment Notice, including preparing alternative means of compliance where exemptions are expiring, and analysing wording changes to existing exemptions for compliance implications.

If you would like to discuss these reforms or any aspect of the New Zealand AML/CFT regime, please get in touch with our financial services regulation team.

This article was prepared by Andrew Suggate (partner) and Lily Hosseini (solicitor).