New anti-money laundering code sets standard for customer ID checks

Thursday 1st September 2011

Customers of financial institutions and casinos can expect more stringent identity checks in the lead up to 30 June 2013, when anti-money laundering legislation comes fully into force. Businesses now have access to guidance on the standard those identity checks should meet.

The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 places obligations on New Zealand’s financial institutions and casinos to detect and deter money laundering and terrorism financing.

An Identity Verification Code of Practice being Gazetted today applies to all reporting entities being supervised by the Reserve Bank, the Financial Markets Authority and the Department of Internal Affairs.

The code sets out an acceptable practice for verifying the name and date of birth of customers (people, not corporations) whom the reporting entities have assessed as low to medium risk. The code details acceptable forms of identification, and outlines when secondary or supporting identification is required – for example, a passport on its own, or a New Zealand Driver Licence with an Eftpos card.

Although the code is not mandatory, it constitutes a ‘safe harbour’ – a reporting entity that fully complies with the code is deemed to be compliant with the relevant parts of the legislation. If a reporting entity decides to opt out of the code, it must adopt practices that are equally effective, otherwise it risks non-compliance.

Source: RBNZ

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