NZ AML/CFT Compliance Officer flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- AML/CFT Act 2009
- New Zealand's primary legislation imposing obligations on reporting entities to detect and prevent money laundering and terrorism financing.
- Reporting entity
- A person or entity carrying on a business in New Zealand that is subject to AML/CFT obligations under the Act, such as financial institutions, casinos, and lawyers.
- Compliance officer
- A designated person within a reporting entity responsible for administering and overseeing the AML/CFT compliance programme.
- Supervisor
- The government agency responsible for monitoring reporting entities' compliance with the AML/CFT Act, such as the DIA, FMA, or RBNZ.
- Risk-based approach
- An approach where reporting entities allocate resources proportionate to the assessed money laundering and terrorism financing risks of their customers and activities.
- Inherent risk
- The level of money laundering or terrorism financing risk before considering the effect of any controls or mitigation measures.
- Residual risk
- The remaining money laundering or terrorism financing risk after controls and mitigation measures have been applied.
- Customer risk assessment
- The process of evaluating the money laundering and terrorism financing risk posed by a customer based on factors such as occupation, country, and transaction activity.
- Enhanced CDD
- Additional customer due diligence measures applied to higher-risk customers, including obtaining extra identity information, verifying source of funds, and enhanced monitoring.
- Simplified CDD
- Reduced customer due diligence measures that may be applied to low-risk customers, but still requires identifying the customer and beneficial owner.
- CDD threshold
- The transaction amount (NZD 10,000 for occasional transactions) at which customer due diligence must be completed before proceeding.
- Politically exposed person
- An individual who holds or has held a prominent public function, or their family members or close associates, posing higher money laundering risk.
- Beneficial owner
- A natural person who ultimately owns or controls a customer, typically through ownership of more than 25% of shares or voting rights.
- Trust beneficial owner
- For trusts, beneficial owners include trustees, beneficiaries with vested interests, and any natural person exercising ultimate control over the trust.
- Identity verification
- The process of confirming a customer's identity using reliable and independent documents, data, or information, such as a passport or electronic verification.
- Source of funds
- The origin of the funds involved in a transaction or business relationship, which must be verified for higher-risk customers.
- Source of wealth
- The origin of a customer's total wealth, which must be verified for higher-risk customers such as politically exposed persons.
- Ongoing CDD
- Continuous due diligence on a business relationship, including keeping customer information up to date and monitoring transactions for consistency with the customer profile.
- Transaction monitoring
- The process of systematically reviewing customer transactions to detect unusual or suspicious activity that may indicate money laundering or terrorism financing.
- Customer risk rating
- A classification (e.g., low, medium, high) assigned to a customer based on assessed money laundering and terrorism financing risk, determining the level of CDD and monitoring.
- Periodic review
- The scheduled re-evaluation of a customer's risk profile and CDD information, with frequency based on the customer's risk rating.
- Suspicious activity report
- A report filed with the Financial Intelligence Unit when a reporting entity has reasonable grounds to suspect activity may be related to money laundering or terrorism financing.
- Prescribed transaction report
- A report filed for certain transactions, including cash transactions of NZD 10,000 or more and international wire transfers of NZD 1,000 or more.
- Financial Intelligence Unit
- The unit within the New Zealand Police responsible for receiving and analyzing suspicious activity reports and prescribed transaction reports.
- Tipping off
- The criminal offence of disclosing to a customer or third party that a suspicious activity report has been or will be filed.
- goAML
- The electronic system used by reporting entities to file suspicious activity reports and prescribed transaction reports with the Financial Intelligence Unit.
- Compliance programme
- A documented set of policies, procedures, and controls designed to ensure a reporting entity meets its AML/CFT obligations.
- Independent audit
- A review of a reporting entity's AML/CFT compliance programme by an independent auditor, required every two years.
- Record keeping
- The obligation to retain AML/CFT records, including CDD and transaction records, for at least five years and make them available to supervisors.
- Staff training
- Regular AML/CFT training provided to employees to ensure they understand their obligations and can identify suspicious activity.
- Senior management approval
- Approval by senior management required for establishing or continuing high-risk business relationships, such as those involving politically exposed persons.
- AML/CFT policies
- Written procedures and guidelines that set out how a reporting entity will comply with its obligations under the AML/CFT Act.