AML/CFT Webinar
Customer Due Diligence — 2024 Refresh
Lan’s Enterprise Limited Training Program
Presented by: Angela Ji
Contact: aml@gmfinance.co.nz
Emergency Hotline: +64 09-309-8808
Overview
- 10 May 2024 — DIA, FMA and RBNZ jointly published updated CDD guidance
- Tied to AML/CFT Amendment Regulations 2023 in force from 1 June 2024
- Five new guideline documents replacing/supplementing prior CDD guidance
- This session walks through what changed and what we must adopt at LEL
Why the Refresh?
- 2021 Statutory Review of the AML/CFT Act identified gaps in CDD practice
- 2023 amending regulations clarified beneficial-ownership obligations
- Supervisors aligned on a single, risk-based, principles-based interpretation
- Real-world enforcement (Hills, SkyCity, Jiaxin) reinforced the need for clearer guidance
The Five New Documents
| # | Document | Focus |
|---|
| 1 | Beneficial Ownership Guideline | Identifying and verifying the natural-person owner behind every customer |
| 2 | CDD: Companies | Standard and enhanced CDD on incorporated customers |
| 3 | CDD: Trusts | Settlor / trustee / beneficiary / class verification |
| 4 | CDD: Limited Partnerships | General partner ID + LP register checks |
| 5 | Enhanced CDD | When ECDD is triggered, what extra steps are required |
What Changed — Beneficial Ownership
- 25% threshold confirmed for beneficial ownership of companies — but also any person with effective control regardless of shareholding
- Multi-layer corporate structures: must drill through every layer to natural persons
- Where no natural person can be identified, senior managing official must be CDD’d
- Document the reasoning — the supervisor wants to see how you concluded
What Changed — Trusts & LPs
Trusts
- CDD on every named beneficiary, settlor, trustee, and protector
- Where beneficiaries are a class, the class must be described and CDD applied to known members
- Discretionary trusts get extra scrutiny
Limited Partnerships
- General partner is treated as the responsible party
- LP register must be checked against customer-provided info
- Foreign LPs trigger ECDD by default
What Changed — Enhanced CDD
ECDD triggers (refreshed)
- Trusts and vehicles dealing with assets
- Companies with nominee shareholders or directors
- Politically Exposed Persons (PEPs)
- Customers from high-risk jurisdictions
- Wire transfers above prescribed thresholds
- Anything else the entity’s risk assessment flags
ECDD requirements
- Source of funds and source of wealth
- Senior management approval
- Enhanced ongoing monitoring frequency
The Risk-Based Approach
“Reporting entities must tailor their AML/CFT programme to their specific risk profile.”
- Guidance is principles-based, not prescriptive
- You must be able to explain your decisions to a supervisor
- Document what risks you identified, what controls you chose, and why
- A copy-paste programme is a programme that fails inspection
Action Items for LEL
- Re-map existing CDD records to the new guideline structure by end of Q3
- Refresh beneficial-ownership drilldown for every corporate customer
- Update onboarding forms to capture beneficial owner + senior managing official
- Re-train front-line staff on ECDD triggers
- Document risk-based reasoning in every customer file going forward
Key Lessons & Takeaways
- CDD is continuous, not a one-off onboarding step
- Beneficial-ownership identification must trace to natural persons
- Trusts and LPs need more granular identification than companies
- ECDD is triggered by risk, not a fixed list — keep the risk register live
- Documenting the why is now as important as the CDD itself
Questions?
Thank you for your attention
References
- DIA / FMA / RBNZ — Updated guidelines related to customer due diligence (10 May 2024)
- AML/CFT (Requirements and Compliance) Amendment Regulations 2023 (in force 1 June 2024)
- AML/CFT Act 2009 — Part 2 (CDD obligations) and Part 3 (programme requirements)