Understanding the AML/CFT annual report requirements
The AML/CFT Act 2009 (the Act) requires reporting entities to prepare an annual report on their AML/CFT risk assessment and AML/CFT programme. The AML/CFT (Requirements and Compliance) Amendment Regulations 2017 prescribes the form of this report. Schedule 2 sets out the annual AML/CFT report by financial institutions and casinos. A few important things relating to this report are summarised below:
Who should the annual report be submitted to?
The annual report should be submitted to your AML/CFT supervisor (e.g. FMA, DIA or RBNZ).
When should the report be submitted?
The report should be submitted by 31 August each year.
What information should the report contain?
The report is set out in 6 parts and ends with a declaration and signature section. The information contained in the Annual AML/CFT report by financial institutions and casinos is below:
Part 1: Contains basic information about the period covered, contact details and structure of the reporting entity.
Part 2: Contains information about the entity’s AML/CFT risk assessment, AML/CFT programme, and customer due diligence. This part also requires providing information about the AML/CFT audit, any deficiencies found and whether these deficiencies have been addressed.
Part 3: Relates to providing statistical information on:
- Percentage of annual revenue earned from the various products and services offered.
- Number of clients broken down by client type such as individuals, trusts, companies etc.
- Number of new clients signed up over the period covered by the report.
Part 4: Identifies the sub-sector the reporting entity belongs to, and listing the top 5 countries to which an entity’s non-resident clients (if any) belong to.
Part 5: Relates to ministerial exemptions.
Part 6: In this section a reporting entity is required to provide any other information that is material and relevant to the AML/CFT report and not previously provided. Declaration and signature is also in this section.
What are the consequences of an incorrect report?
It is important to provide all the information truthfully as providing false or misleading information is an offence. A conviction may result in a fine up to $10,000 and/or imprisonment up to 3 months for individuals and a fine up to $50,000 for entities.