Are you complying with the prescribed transactions reporting regime?
The Anti-Money Laundering and Countering Financing of Terrorism (Prescribed Transactions Reporting) Regulations 2016, outline the requirement for reporting entities (REs) to report prescribed transactions to the FIU.
What is a prescribed transaction?
A prescribed transaction is a transaction conducted through the RE that is:
- An international wire transfer valued at NZ$1,000 or more; or
- A domestic physical cash transaction (i.e. a transaction taking place in New Zealand involving physical currency – cash and bearer negotiable instruments that are exchanged for physical (NZ) currency) valued at NZ$10,000 or more.
These transactions, operationally, are referred to as international fund transfers (IFTs) and large cash transactions (LCTs), respectively.
What is the time frame for reporting?
Prescribed Transactions Reports (PTRs) need to be reported as soon as practicable but within 10 working days from the date the transaction took place.
How to report prescribed transactions?
Prescribed transactions reporting can be undertaken manually or by automated means.
- Manual reporting: Reports can be submitted manually, one-by-one, via the goAML web tool.
- Automated reporting: Automated reporting of prescribed transactions is available through the FIU xml schema. REs submitting automated reports are still in the transitional period (until 1 July 2018), but are expected to provide PTRs as soon as they are able.
What are the penalties for REs who do not comply with the prescribed transactions reporting regulations?
REs manually submitting PTRs who don't report, are considered non-compliant. Those using the automated system will not be considered non-compliant prior to the end of the transitional compliance period (1 July 2018).
Failure to comply with the prescribed transactions reporting obligations constitutes a civil liability act and may result in pecuniary penalties. The maximum amount of a pecuniary penalty is $200,000 for individuals, and $2 million for an entity.
However, if a reporting entity breaches prescribed transactions reporting obligations knowingly or recklessly then the penalties are:
- In the case of an individual, either or both of the following:
- a term of imprisonment of not more than 2 years
- a fine of up to $300,000
- in the case of a body corporate, a fine of up to $5 million.
Including an adequate and effective policy, procedure, and control for reporting prescribed transactions is a minimum requirement under Section 57 (1) (da) of the AML/CFT Act 2009. Strategi recommends updating your AML/CFT Programme to include a section describing these matters.
Even if prescribed transactions are not undertaken through your business, Strategi recommends you include a section headed up Prescribed Transactions Reporting and briefly explain why you are not required to describe the policy, procedure, and control relating this.
Contact us for further information.