Government introduces final stage of AML/CFT reform programme

In the fourth and final stage of its AML/CFT reform programme, the New Zealand Government has introduced the Anti-Money Laundering and Countering Financing of Terrorism (Omnibus) Amendment Bill (Omnibus Bill) on 28 August 2026.

The Omnibus Bill follows earlier reforms that removed mandatory address verification requirements, removed automatic source of wealth verification for family trusts, and consolidated AML/CFT supervision under the Department of Internal Affairs. You can read our insights on earlier reforms here.

 

What does the Omnibus Bill do?

The Omnibus Bill would reduce certain compliance requirements while introducing a range of new obligations, supervisory powers and enforcement measures.

The reforms would provide reporting entities with greater discretion in some areas of AML/CFT compliance and place increased emphasis on entity-specific risk assessments. However, that flexibility is accompanied by significantly expanded enforcement powers, new sanctions-related obligations, and increased penalties. We highlight some of the Omnibus Bill’s key features below.

Greater flexibility for customer due diligence

• The Omnibus Bill would allow reporting entities to apply simplified customer due diligence where they reasonably assess a customer or circumstance as presenting a low AML/CFT risk. It also gives reporting entities greater discretion over the information required for enhanced customer due diligence, requiring only information necessary to mitigate identified AML/CFT risks.

New sanctions compliance framework

• The Omnibus Bill introduces a new sanctions compliance regime designed to address gaps identified in New Zealand’s implementation of United Nations Security Council targeted financial sanctions, expanding the purpose of the AML/CFT Act to include supporting compliance with specified sanctions and introducing obligations requiring reporting entities to assess and manage sanctions-related risks. Reporting entities would be required to incorporate and keep under review sanctions considerations into their risk assessments and AML/CFT programmes and undertake sanctions screening in accordance rules to be issued by the Department of Internal Affairs.

Mandatory reporting groups replace designated business groups

• The Omnibus Bill replaces the existing designated business group framework and would introduce mandatory group reporting for certain groups of related entities, including international corporate groups with regulated AML/CFT businesses, and allow voluntary group reporting in other cases. Mandatory groups will be required to appoint a lead entity and maintain a group-wide AML/CFT programme with common policies, controls and information-sharing arrangements. Members will also be able to rely on other group entities for customer due diligence, reporting and aspects of compliance administration.

Expanded intelligence and enforcement powers

• Among the most significant changes are new powers enabling the Financial Intelligence Unit of the New Zealand Police (the FIU) to obtain ongoing production orders requiring reporting entities to provide specified financial records on an ongoing basis. The FIU would also gain broader powers to obtain information from non-reporting entities and share intelligence more broadly with regulators, the Police, the New Zealand Security Intelligence Service and the Government Communications Security Bureau. The Omnibus Bill also introduces temporary freezing orders, enabling transactions or facilities to be frozen for up to seven days, with a possible High Court extension of up to 28 days.

Proposed controls on cash and virtual assets

• The Omnibus Bill creates a framework for restricting certain cash transactions involving virtual assets and international remittance services by way of regulation. Given the proximity of the General Election, consultation on any proposals for regulations to restrict cash payments for remittance services and virtual assets is expected in early 2027.

Higher penalties and new infringement regime

• Maximum civil pecuniary penalties would increase to the greater of NZD500,000 or three times any gain derived from the contravention for individuals, and the greater of NZD5 million, three times the gain, or 10% of turnover for entities. A new infringement offence regime for lower-level compliance failures would also be introduced, allowing regulators to respond to minor breaches without commencing full enforcement proceedings.
• At the same time, limitation periods for a range of AML/CFT offences would be extended from three years to five years and penalties for numerous criminal offences under the AML/CFT Act and Crimes Act would increase. The maximum penalty for money laundering under section 243 of the Crimes Act would double from seven years’ imprisonment to 14 years in the most serious cases.

 

Our view

The Omnibus Bill proposes a wide-ranging set of changes to New Zealand’s AML/CFT framework. If enacted, the reforms would provide greater flexibility in some areas of compliance, while also introducing new sanctions obligations, enhanced supervisory and intelligence powers, and increased penalties for non-compliance.

The exemptions for reporting entities whose customers are licensed or specified managing intermediaries will expire on 31 December 2026. While the DIA has announced that it will not renew these exemptions, it will apply a one-year good faith period while it develops more targeted regulatory relief. The aim is to shift away from a broad exemption model towards a more targeted approach that maintains beneficial ownership transparency, while minimising duplicated customer due diligence.

Please contact your usual DLA Piper adviser if you have any questions on the Omnibus Bill.