The Government has revealed “common sense” changes to anti-money laundering laws to slash paperwork for small businesses and to make it easier for children to open bank accounts, the Acting Prime Minister says.
David Seymour said the changes to anti-money laundering laws would “remove a lot of the insanity so that ordinary people, including parents who want their children to bank, can actually have a bit of relief”.
“We want young people to learn about the benefits of saving and investing and planning for the future,” he said to Breakfast this morning.
The ACT leader said families were being discouraged from opening accounts for young people because the paperwork was too cumbersome, calling it “the most un-Kiwi thing” that needed fixing.
Under current anti-money laundering rules introduced in 2011, parents must provide documentation including photo IDs, birth certificates, proof of address, and evidence of their financial relationship with their child when opening accounts.
In a statement this afternoon, Associate Justice Minister Nicole McKee said under the Government’s new reforms, banks would be allowed to apply a simplified process when the risk is low.
“This means that if a bank puts measures in place to make a child’s bank account low-risk (e.g.) by setting appropriate transaction limits) all that could be required is a birth certificate to confirm the child’s name and date of birth, and prove the relationship to the parents.”
McKee said they could also skip the “intrusive and unnecessary questions” about the “nature and purpose” of the account – and reduce or forego ongoing monitoring of a child’s banking activity until they turn 18 or the account settings are changed.
The Government has also directed the future Anti-Money Laundering and Countering Financing of Terrorism supervisor to issue clear guidance, so businesses like banks know exactly how to apply the simplified checks without fear of penalty.
The ACT party had previously campaigned on reducing business compliance costs with anti-money laundering and terrorism financing laws. At the last election, ACT said small businesses needed a more “risk-based approach” that was “less punitive.”
McKee announced reform of the laws last October.
Seymour also said this morning upcoming AML/CFT changes would include “a whole lot for business”.
“If you’re, for example, engaged in property transactions, or you’re a lawyer, or whatever. We’re going to be simplifying the amount of customer due diligence there. We’re going to be moving to just a single supervisor,” he said.
“We have to show that we’re doing our bit to fight money laundering and terrorism. We’ve got our own problems with organised crime in New Zealand — we have to keep on them.
“But we also need to remove a lot of the insanity so that ordinary people … can actually have a bit of relief.”
Seymour said the reforms would help benefit small businesses and professional services, allowing New Zealanders to spend “less time dealing with red tape”.
“It’s going to be small business. It’s going to be people in the professional services who have to do a lot of this stuff, because they manage transactions, lawyers, accountants and so on.”
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McKee said in her announcement last year that the changes would make complying with the law more “user-friendly for small businesses”.
“I have heard from countless New Zealanders that the current regulations are unnecessarily risk-averse, resulting in complicated, repetitive processes. Simple tasks shouldn’t be made confusing and difficult to complete,” she said.
“I’m taking a pragmatic approach to this work, by prioritising changes that will deliver significant regulatory relief to businesses while also reducing the harm caused by money laundering in our communities.
“In fact, these reforms will deliver the most significant regulatory relief since the Anti-Money Laundering and Countering Financing of Terrorism Act came into force in 2013.”
