The complete guide to meeting your AML/CFT obligations

All reporting entities must meet their obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (hereafter referred to as the AML/CFT Act). Reporting entities should not take this obligation lightly as the penalties for non-compliance are massive and can be as high as $2m and/or up to two years in prison.

The requirements

The AML/CFT Act 2009 (Act) requires a Reporting Entity (RE) to:

  • Put in place a Risk Assessment identifying the risks to its business from money laundering and financing of terrorism crimes, and develop an AML/CFT Programme based on that Risk Assessment describing the steps it will take to mitigate the risk of money laundering and financing of terrorism; and
  • Undertake an audit of the Risk Assessment, and the AML/CFT Programme through an appropriately qualified person who is independent and who has not been involved in the development of the reporting entity’s AML/CFT Risk Assessment, or the establishment, implementation or maintenance of its AML/CFT Programme.

Meeting AML/CFT obligations is not a five minute task. There may be significant work that needs to be undertaken for all those involved – the level of work being dictated by the size of the business and outcome of the business’ risk assessment.

Strategi Group's AML/CFT solutions

Obviously, you cannot have the same service provider assisting you in developing your Risk Assessment and the AML/CFT Programme, and then auditing the same. This raises the question: who will you appoint to be your independent auditor and who will you seek professional help from to implement the Risk Assessment and the AML/CFT Programme?

Strategi Group can help you make the best, and easiest, decision by splitting your AML/CFT obligations between two service providers. Strategi Group comprises two distinctly separate legal entities: Strategi Institute Limited (Strategi Institute) and Strategi Limited (Strategi) both perfectly positioned to help you meet your obligations.

Strategi Ltd can be your AML/CFT auditor

There is a legal requirement to appoint an independent auditor to undertake the compulsory two-yearly AML/CFT audit. Strategi Ltd has specialist compliance staff who are able to conduct your AML/CFT audit. However, this can only occur if Strategi Ltd was not engaged as a consultant to help you meet your AML/CFT obligations.

Strategi Institute can train your compliance officer and staff on AML/CFT

Strategi Institute has developed a comprehensive manual for those who need to meet AML/CFT obligations. This manual – complete with appendices and checklists – is designed specifically for AFAs and small to medium-sized financial advice practices who are deemed to be reporting entities, and will give you the tools and direction you need.

Strategi Institute has tested its manual and is confident that any AFA or small business owner who is deemed to be a reporting entity (and has a simple, client interfacing business with all NZ-domiciled clients of a low risk nature), and is prepared to spend quality time reading and taking action on the contents, should be able to meet their AML/CFT obligations without having to engage the services of an external AML/CFT consultant.

Those who, having purchased the manual, read the material and completed their risk assessment, then discover that their business is complex and deemed to be of a medium or high risk, may want to consider engaging an external AML/CFT consultant to review what they have drafted in their AML/CFT programme.

The reporting entity still needs to do the work to analyse the business, develop your risk assessment, write your AML/CFT programme and make some key appointments and undertakings. This is not something that Strategi or Strategi Institute can do as you are the one who knows your business best and you are the one who has the legal obligation to meet the requirements of the AML/CFT Act.

Additionally, Strategi Institute has a number of training options for networks, QFEs, advisers and staff on meeting AML/CFT obligations. These include:

  • 3-hour classroom-based courses.
  • Electronic packages that QFEs can purchase and load into their own learning management system. These explain the obligations under the Act and provide a multi-choice assessment.
  • Radar online solution where advisers and staff log into Radar, undertake the training, complete multi-choice questions and have them marked. This will qualify for structured CPD hours.
  • Annual AML/CFT refresher training and assessment delivered online via Radar. These are generic packages but can be customised to meet specific QFE and network requirements.

Find out more about our AML/CFT training.

What is the investment?

The cost of getting it wrong is far in excess of the investment in the AML/CFT manual, the training packages and the compulsory two-yearly audits. Pricing for a standalone AFA or small to medium-sized adviser practice is shown below:

Item Benefit Investment (ex GST)
AML/CFT manual and templates End to end solution to enable you to complete your risk assessment and AML/CFT programme plus learn what your obligations are

$475

Strategi Institute AML/CFT annual refresher training package including assessment Meet the training requirements contained in your AML/CFT programme plus your requirements under Code Standards 14 & 15

From $35 (free for Radar subscribers)

2-yearly AML/CFT audit from Strategi Meet the legal requirement to have an ‘independent’ auditor

$450– $1,500 depending on type of audit

Next steps

See our articles, publications and reviews under the topic AML/CFT to find out more, or contact us for more information or to discuss your requirements.