Financial Crime World

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New Zealand Adapts to FATF Guidelines: A Timeline of Changes

In recent years, New Zealand has made significant changes to its financial regulations in response to guidelines set by the Financial Action Task Force (FATF). The country’s efforts aim to prevent money laundering, terrorist financing, and other illicit activities.

One notable change was introduced in 2013, when New Zealand aligned its standards with FATF’s recommendations on mutual legal assistance. This move ensured that the country could provide aid to foreign authorities investigating criminal activity while respecting local secrecy laws.

2015: Combating Foreign Terrorist Fighters

In 2015, New Zealand revised its interpretation of Recommendation 5 to combat the threat posed by foreign terrorist fighters. The revised standard made it clear that countries must criminalize financing travel for individuals intending to participate in terrorist activities.

2016: Updates to Non-Profit Organizations

The following year, New Zealand updated its guidelines on non-profit organizations (NPOs) to align with FATF’s Typologies Report and Best Practices. This change brought clarity to the subset of NPOs subject to supervision and monitoring.

2016: Broader Scope for Recommendation 5

In 2016, New Zealand revised its interpretation of Recommendation 5 once more, replacing “funds” with “funds or other assets” to broaden the scope of the recommendation. The country also added references to oil and other natural resources in the Glossary definition of “funds or other assets.”

Subsequent Updates

The years that followed saw a flurry of updates, with New Zealand revising its guidelines on:

  • Targeted financial sanctions
  • Information sharing among financial groups
  • Data protection
  • Virtual asset activities

2021: Clarity for Virtual Asset Activities

In 2021, New Zealand revised its interpretation of Recommendation 15 to clarify the applicability of proliferation financing risk assessment and mitigation requirements to virtual asset activities. The country also updated its Glossary definition of “designated categories of offences” to include environmental crimes.

Recent Updates (2023)

The most recent updates from FATF’s plenary meetings in February 2023 and October 2023 focus on strengthening standards for:

  • Beneficial ownership
  • Asset recovery
  • Non-profit organizations

These changes aim to further enhance New Zealand’s ability to combat financial crime and terrorism financing.

Conclusion

By adapting to FATF guidelines, New Zealand demonstrates its commitment to maintaining a robust and effective financial system that protects both its citizens and the global economy.