The changes allow simplified regulatory measures for low-risk entities
New Zealand's government has endorsed recent changes to international anti-money laundering (AML) standards, which align with its efforts to refine the country's regulatory framework, according to Associate Justice Minister Nicole McKee.
McKee announced the government's support for the Financial Action Task Force's (FATF) revised guidelines, allowing simplified regulatory measures for low-risk entities.
"These changes ensure our AML and countering financing of terrorism (AML/CFT) regime remains effective while reducing unnecessary compliance burdens on businesses, community groups, and individuals facing minimal risk," said McKee in a news release.
The FATF, an intergovernmental body that sets global AML standards, revised its policies last month to promote a risk-based approach. The adjustments aim to prevent money laundering and terrorism financing without imposing excessive regulations on entities with little threat.
McKee emphasised that while the government is committed to international AML obligations, the current one-size-fits-all model has led to unintended consequences. She cited examples of vulnerable individuals—such as children, disabled people, and the unhoused—struggling to open bank accounts due to strict compliance rules. Community organisations have also faced heightened scrutiny, and some small businesses have been forced to close because of rigid AML/CFT requirements.
"That is why we promoted these changes at FATF, and I'm pleased other members have joined us in taking a common-sense approach," McKee stated. "My AML/CFT reform work programme will implement the FATF's new standard by allowing simplified measures for low-risk activities and entities."
McKee highlighted that New Zealand's experience with financial barriers faced by Pasifika communities in sending remittances shaped the revised FATF standards. The changes reflect the need for AML rules that target genuine threats without restricting ordinary citizens' access to financial services.
The government intends to incorporate the FATF's updated framework into a broader package of AML/CFT reforms. The goal is to enhance efficiency, reduce regulatory burdens, and strengthen enforcement against organised crime and fraud.
"We are working hard to build efficient government structures that empower common sense," McKee said. "Instead of wasting time on unnecessary compliance, we want businesses to focus on practical actions to keep criminals out of our financial system."
The upcoming reforms are expected to improve New Zealand's alignment with international AML standards while ensuring that regulatory measures remain proportionate to actual risks.
