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Anti-Money Laundering and Countering Financing of Terrorism Act 2009

Enforcement - Civil liability

78: Meaning of civil liability act

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"What happens when someone breaks the rules to stop money laundering"

Illustration for Anti-Money Laundering and Countering Financing of Terrorism Act 2009

In this part of the law, a civil liability act happens when a reporting entity does not follow the rules. You need to know that this includes when the entity fails to check customers' identities as required by subpart 1 of Part 2. The entity must also monitor accounts and transactions, and report transactions as required by subpart 2A of Part 2 and keep records as required by subpart 3 of Part 2. When a reporting entity breaks these rules, it can be held responsible. You should be aware that this includes failing to have a programme to stop money laundering and terrorism financing. The entity must also make sure its branches and subsidiaries follow the rules. If the entity enters into certain cash transactions in breach of section 67A, it can also be held responsible. This is all part of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. You can find more information about the rules and requirements in the different parts of the Act.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2140950.

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Part 3Enforcement
Civil liability

78Meaning of civil liability act

  1. In this Part, a civil liability act occurs when a reporting entity fails to comply with any of the AML/CFT requirements, including, without limitation, when the reporting entity—

  2. fails to conduct customer due diligence as required by subpart 1 of Part 2:
    1. fails to adequately monitor accounts and transactions:
      1. enters into or continues a business relationship with a person who does not produce or provide satisfactory evidence of the person’s identity:
        1. enters into or continues a correspondent banking relationship with a shell bank:
          1. fails to report transactions in accordance with subpart 2A of Part 2:
            1. fails to keep records in accordance with the requirements of subpart 3 of Part 2:
              1. fails to establish, implement, or maintain an AML/CFT programme:
                1. fails to ensure that its branches and subsidiaries comply with the relevant AML/CFT requirements:
                  1. enters into cash transactions in relation to certain items in breach of section 67A.

                    Notes
                    • Section 78(da): inserted, on , by section 11 of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Act 2015 (2015 No 96).
                    • Section 78(h): inserted, on , by section 28 of the Criminal Activity Intervention Legislation Act 2023 (2023 No  7).