Recently, the NZ Ministry of Justice released a cabinet paper on four associated bills relating to reforms in the justice system, this included proposed changes to AML/CFT Act.
I have found it quite surprising that they mainly focused on drafting issues and helping the regulators in their day to day enforcement of the Act whilst paying very little attention to the practical needs of Reporting Entities - struggling New Zealand businesses who spend a lot of money trying to comply with the Act and onboard new customers.
For me, one glaring omission is the lack of change on Address Verification.
Address Verification provides very little comfort that your customer is who they say they are or that they live where they say they live as it is very easy to manipulate. The status quo is aimed at easily being able to verify the address of 40 years old+ established New Zealanders and does not take into account the needs of immigrants or under 25 year olds who are less likely to have a credit file, home ownership or a utility bill in their name.
This status quo is excluding a growing proportion of New Zealand from financial services.
I don’t understand why we can’t aim for a more inclusive society whilst maintaining New Zealand’s high standards by offering different risk based options of CDD in place of Address Verification, options such as supplying 2 forms of ID or relaxing section 33 of the Act to make the reliance provisions more practical.
Note: For changes to section 33 of the Act to work there would also need to be agreement for sharing of information to occur from the underlying database owners and document issuers as sharing of results is generally prohibited under those agreements.
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