FMA

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.” ...