The Enhanced CDD requirements for wire transfers are contained in sections 22(3), 27-28 of the AML/CFT Act. For Enhanced CDD pertaining to source of wealth or source of funds, please read our article on this here.
The Enhanced CDD wire transfer provisions are applied and relate specifically to the information that must accompany a transfer of funds by electronic means. Wire transfers present a high risk of money laundering which is why these additional Enhanced CDD requirements exist.
The Enhanced CDD wire transfer provisions are dependent on whether the reporting entity is an Ordering, Intermediary or Beneficiary Institution in relation to each transaction it is involved in (that meets the definition of wire transfer). These terms are defined in section 5 of the AML/CFT Act.
The relevant obligations differ depending on whether a wire transfer is domestic or international.
In summary, an Ordering Institution of a wire transfer must identify and verify the identity of the originator of a wire transfer. Relevant information (which differs depending on whether it is a domestic or international wire transfer) must be transmitted to the next reporting entity in the chain, and in turn, through to the Beneficiary Institution. The Beneficiary Institution therefore has visibility of who is sending money to its client. If a Beneficiary Institution does not receive the required information with a wire transfer, it is required to use appropriate risk-based procedures for handling its receipt of those funds and consider whether the wire transfer constitutes a suspicious activity. Further information is available in the Wire Transfer Guidance (PDF, 153KB).
Where a wire transfer is an international wire transfer of $1,000 or more, there is also the requirement that an Ordering and Beneficiary Institution submit an international wire transfer prescribed transaction report (IFT-PTR) to the New Zealand Police Financial Intelligence Unit (FIU).
As of 31 July 2023, regulation 15A of the Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011 exempts all designated non-financial businesses or professions (DNFBPs) that make or receive wire transfers from or into their trust account from being an ordering, an intermediary, or a beneficiary institution in relation to both domestic and international wire transfers. This does not exempt a DNFBP from its obligation to submit an IFT-PTR in relation to wire transfers of $1,000 or more from or into its trust account. For further information, please refer to our guidance: Guidance-for-DNFBPs-wire-transfers-and-prescribed-transaction-reporting.
For the application of the wire transfer and IFT-PTR provisions to money remitters that utilise an informal or hawala system of money transfer, please refer to the Department’s information sheet on this subject.
The Enhanced CDD wire transfer provisions are applied and relate specifically to the information that must accompany a transfer of funds by electronic means. Wire transfers present a high risk of money laundering which is why these additional Enhanced CDD requirements exist.
The Enhanced CDD wire transfer provisions are dependent on whether the reporting entity is an Ordering, Intermediary or Beneficiary Institution in relation to each transaction it is involved in (that meets the definition of wire transfer). These terms are defined in section 5 of the AML/CFT Act.
The relevant obligations differ depending on whether a wire transfer is domestic or international.
In summary, an Ordering Institution of a wire transfer must identify and verify the identity of the originator of a wire transfer. Relevant information (which differs depending on whether it is a domestic or international wire transfer) must be transmitted to the next reporting entity in the chain, and in turn, through to the Beneficiary Institution. The Beneficiary Institution therefore has visibility of who is sending money to its client. If a Beneficiary Institution does not receive the required information with a wire transfer, it is required to use appropriate risk-based procedures for handling its receipt of those funds and consider whether the wire transfer constitutes a suspicious activity. Further information is available in the Wire Transfer Guidance (PDF, 153KB).
Where a wire transfer is an international wire transfer of $1,000 or more, there is also the requirement that an Ordering and Beneficiary Institution submit an international wire transfer prescribed transaction report (IFT-PTR) to the New Zealand Police Financial Intelligence Unit (FIU).
As of 31 July 2023, regulation 15A of the Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011 exempts all designated non-financial businesses or professions (DNFBPs) that make or receive wire transfers from or into their trust account from being an ordering, an intermediary, or a beneficiary institution in relation to both domestic and international wire transfers. This does not exempt a DNFBP from its obligation to submit an IFT-PTR in relation to wire transfers of $1,000 or more from or into its trust account. For further information, please refer to our guidance: Guidance-for-DNFBPs-wire-transfers-and-prescribed-transaction-reporting.
For the application of the wire transfer and IFT-PTR provisions to money remitters that utilise an informal or hawala system of money transfer, please refer to the Department’s information sheet on this subject.