On 1 July 2026 the Department of Internal Affairs ("DIA") became the sole supervisor of the Anti-Money Laundering and Countering Financing of Terrorism ("AML") regime. Immediately following this transition, the DIA published an extensive suite of guidance, including on customer due diligence, risk assessments, AML/CFT programmes, wire transfers and prescribed transaction reports ("PTRs"), the territorial scope of the Act, and the meaning of "ordinary course of business".
Two pieces of guidance stood out to us: the updated wire transfer and PTR guideline, and the new territorial scope guideline. Both represent significant shifts from the pre-existing guidance and deserve close attention.
Wire transfers and PTRs: Ex-FMA reporting entities now captured
The DIA's wire transfer and PTR guideline makes clear that non-bank financial institutions ("NBFIs") that do not actually transfer client funds can be an ordering, intermediary or beneficiary institution. NBFIs are therefore subject to prescribed transaction reporting obligations for international wire transfers of NZD$1,000 or more. Crucially, the DIA's position is a stark shift from the interpretation previously published by the Financial Markets Authority, that "We expect that a reporting entity that receives and/or passes on instructions from a client to do an international wire transfer, but does not actually transfer the funds, is not required to do a PTR."1
The DIA considers that where both a bank and an NBFI are involved in the same overall movement of funds, both should submit PTRs. In its view, this is "complementary reporting", not duplicate reporting, because each institution provides a different snapshot of the transaction with distinct intelligence value.
For reporting entities that relied on the FMA's prior position, the DIA advised that compliance with the FMA's interpretation will be treated as having complied with the AML Act. The DIA will provide these entities with a "transitional implementation period" from 1 July 2026 to 30 June 2027 to allow them to update their AML programmes, policies, procedures and controls.
Territorial scope: A three-step test
The territorial scope guidance has also been markedly updated. We recommend that reporting entities that are relying on the territorial scope of the AML regime not extending to their business read the guideline carefully. The territorial scope guidance now introduces a structured three-step framework for determining whether the Act applies to a business:
Step 1: Does the business carry on a captured activity in the ordinary course of business?
Step 2: Is that activity carried on or carried out in New Zealand? (This is assessed by reference to the location and character of the activity, not only where the business is incorporated or physically located.)
Step 3: Is there a sufficient New Zealand connection? (This involves considering the extent to which the business, customers or activities of the reporting entity are in New Zealand).
The guidance lists a range of factors relevant to that third step, including whether the business actively advertises to persons in New Zealand, accepts or services New Zealand customers on a repeated or systematic basis, uses New Zealand financial infrastructure, or relates to New Zealand legal arrangements.
Ordinary course of business
The DIA has also released guidance on interpreting "ordinary course of business". This guidance feeds directly into Step 1 of the territorial scope test. While the general test has not been significantly changed, the guidance provides a great deal of detail on the multi-factor assessment. Reporting entities that are not complying with the AML regime on the basis that their captured activity is not in the "ordinary course of business" should confirm their position in light of the new guidance.
The other guidance
Beyond the headline items above, the DIA's guidance suite also covers customer due diligence, risk assessments and sector risk summaries, AML/CFT programme requirements, and guidance for specific sectors such as virtual asset service providers and designated non-financial businesses and professions.
What this means for you:
- NBFIs should review the wire transfer and PTR guidance and use the transitional period to update their programmes and reporting systems before 30 June 2027;
- international businesses should re-confirm their position in light of the three-step territorial scope test; and
- all reporting entities should familiarise themselves with the full guidance suite and update their AML programmes as necessary.
If you have questions about how any of the new guidance applies to your business, please get in touch with our team.