Currency exchanger, fuel card system, payment provider and insurer granted AML exemptions

Associate Justice Minister Nicole McKee has granted four more Ministerial Exemptions Under the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT Act), this time to RD Petroleum, RewardPay (NZ), AIA NZ, and Travelex Financial Services NZ.

These exemptions follow a recent one granted to banks, allowing them to share AML/CFT related information to help combat fraudsters and scammers.

The Minister can decide to grant an exemption from AML/CFT Act requirements under certain circumstances. For example,  if a business is deemed to face low money laundering risks it might not have to meet some or all of the normal requirements. A company has to make an application for an exemption.

Currency exchanger Travelex facilitates the import and export of unaccompanied cash. A change introduced in July 2024 requires unaccompanied cash sent to, or received from outside NZ to submit border cash reports (BCRs) at least 72 hours before the cash arrives in or leaves the country.

"This 72 hour requirement significantly impacts the ability of Travelex to facilitate import and export of unaccompanied cash. Travelex previously held a partial exemption from 2016-2020," says McKee.

The exemption allows Travelex to submit BCRs a minimum of 24 hours before unaccompanied cash arrives in or departs from NZ.

"Travelex is more able to fulfil market banknote requirements in a timely manner within New Zealand. Travelex's current obligations to its wholesale customers are to fulfil orders within 48 hours of order placement. If the exemption is not granted, Travelex will not be able to meet its requirement to submit BCRs 72 hours prior to import and export."

RD Petroleum provides bulk distribution of fuel and oil products and operates service stations in the South Island. It also operates a fuel card system, which is deemed a "means of payment" and makes RD Petroleum a financial institution under the AML regime.

"RD Petroleum previously held a Ministerial Exemption from certain provisions of the Act. This was granted in 2018 and expired in 2023. Since then, they have also added aviation fuel cards into their fuel card services."

"RD Petroleum's fuel card service will be exempt from most requirements of the Act, e.g. customer due diligence, prescribed transaction reporting. RD Petroleum will continue to have an obligation to report suspicious transactions," McKee says.

Payment provider RewardPay already has an exemption dating from July 2022 relating to the facilitation of payments from American Express (Amex) customers to New Zealand government departments and Crown Agencies. An amended exemption expands RewardPay’s ability to facilitate payments to NZ registered companies.

McKee says the expanded exemption lets RewardPay operate in NZ with reduced compliance costs, saying RewardPay doesn't believe it would be financially viable to operate in NZ in the absence of an exemption.

"Given the low- risk profile of RewardPay, the regulatory burden in the absence of an exemption would be disproportionate to the risks associated with granting an exemption," McKee says.

Insurer AIA offers customers a profit share scheme through which they can receive a share of the profits from their policy if the pool of policies in the profit share feature have a low number of claims overall.

McKee says the vast majority of AIA’s products are currently exempt from the Act, with the exception of certain legacy products no longer available to new customers. AIA's profit share scheme is not currently exempt, but will be now.

"AIA will no longer have to deal with the compliance burden imposed by the AML regime in relation to their profit share scheme," she says.

McKee says each exemption was assessed against the statutory criteria to ensure the integrity of NZ’s AML/CFT regime is maintained, including consideration of:

• Whether the intent and purpose of the Act is still achieved.
• The money-laundering and terrorism-financing risk posed by the entity and the specific service.
• The impact the exemption would have on detecting, investigating, and prosecuting offending.
• The regulatory burden the business would face without an exemption.
• Whether granting the exemption could create unfair competitive advantages.
• The overall impact on trust and compliance across the AML/CFT system.

"These exemptions are about cutting red tape where the cost imposed on businesses and their customers clearly outweighs the risk. When regulation demands the full weight of AML compliance for inherently low-risk activity, it becomes bureaucracy for its own sake," McKee says.

"Now, less time and money will be wasted on box-ticking, and these businesses will have more time to focus on growing, improving productivity, creating jobs, and lifting incomes."

"In some cases, not having the exemption could mean it is simply not practical or affordable for the service to be offered at all in New Zealand," says McKee.

The exemptions are granted under section 157 of the AML/CFT Act. All are conditional and run until November 2030.

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