The Ministry of Justice (Ministry) is consulting on proposed levies to help fund parts of New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) system. The proposals sit alongside the AML/CFT National Strategy and Work Programme for 2026–2030.

This consultation is about how the levy would work (who pays, how much, and any exemptions). It is not consultation on the Strategy/Work Programme themselves, or on the Bill that provides the levy powers.

Why is a levy being introduced?

The Ministry considers that the AML/CFT system requires additional resourcing to work effectively. The consultation document points to, among other things, the Financial Action Task Force (FATF) Mutual Evaluation Report (2021) and the Ministry’s statutory review of the AML/CFT Act (2022), both of which identified resourcing and effectiveness gaps.

If the proposals proceed and the Bill passes, levy regulations are expected to commence in the second half of 2026, with levy collection starting from 1 July 2027. The consultation document models a total annual levy collection of approximately $27.3 million (GST-exclusive) on average across 2027/28 to 2029/30, including recovery of 2026/27 costs.

The proposals rely on the concept of “club goods”, being activities said to primarily benefit AML/CFT reporting entities and therefore suitable for partial costs recovery via a levy.

The consultation proposes a hybrid funding model: some AML/CFT costs would be levy-funded, while others would remain Crown-funded. Reporting entities may dispute aspects of this approach, particularly whether funded activities are correctly characterised as “club goods” rather than as activities that predominantly deliver broader public benefits.

Who will pay?

The proposal is to levy reporting entities in sectors assessed as high or medium-high risk in the Sector Risk Assessments and the 2024 National Risk Assessment (subject to certain threshold limits and exemptions), being:

• Banks (with a proposed exemption for those with less than $1.5 billion in reported assets).

• Casinos and the TAB.

• Others including virtual asset service providers, money remitters, trust and company service providers, derivatives issuers, real estate agents, accountants, law firms and lawyers (excluding barristers sole), payment providers, currency exchanges, conveyancers, and providers of client money or property services).

The consultation proposes a differentiated levy structure, based on sector risk and size. 

Banks 

Banks would bear the largest share of levy costs - approximately 85% of the total. This reflects the banking sector's classification as the highest-risk sector in New Zealand's National Risk Assessment, the fact that banks process nearly 99% of the gross value of financial transactions, anticipated increases in supervisory costs for banks, and the likelihood that banks will consume a significant proportion of Financial Intelligence Unit (FIU) resources.

Each levied bank’s contribution would be determined by reference to its total reported assets, within a proposed band of 0.001% to 0.005% of reported assets. The consultation illustrates that a levy rate of 0.00322% would raise approximately $23.4 million per year. Banks with less than $1.5 billion in reported assets would be exempt.

Casinos and the TAB

Casinos and the TAB would contribute around 9% of the total levy (approximately $2.5 million per year). The levy would be calculated by reference to annual expenditure and player loss data reported to DIA, within a proposed band of 0.125% to 0.5%. Using 2023/24 data, the consultation illustrates that a rate of 0.258% would raise approximately $2.5 million.

Other high- and medium-high risk sectors

These sectors would together contribute the remaining 6% of the levy (about $1.615m per year, on the consultation’s modelling).

For this group, the consultation proposes three ways to calculate the levy:

1. Flat levy (all entities pay the same). Illustrative amount: about $404 per reporting entity per year. Simple to administer, but it does not reflect differences in size or risk.

2. Flat levy by sector. The amount for each sector would be based on the number of compliance assessments undertaken by the supervisor (as a proxy for supervisory effort/risk). The consultation illustrates levies ranging from about $230 (accounting service providers) to $3,220 (virtual asset service providers).

3. Tiered levy within each sector (the Ministry’s preferred option). Sector costs would still be linked to compliance assessments, but larger entities would pay more, using either the value of transactions or the number of customers for whom customer due diligence was conducted (from annual AML reports). Smaller businesses could be exempt under the thresholds.

The Ministry prefers the tiered approach because it sees it as better reflecting differences in size (and, indirectly, risk and supervisory effort).

What will reporting entities receive in return for the levy?

The consultation identifies a range of benefits it considers to be "club goods" that will flow from the levy, including:

• Improved guidance and training, with more timely, sector-specific outreach from the supervisor.

• Streamlined compliance processes, including development of a Code of Practice for Simplified Customer Due Diligence, enabling reporting entities to self-assess low-risk scenarios where reduced due diligence is appropriate.

• Enhanced intelligence products from the FIU, including at least two new strategic thematic risk assessments each year and a new Targeted Financial Sanctions Risk Assessment, together with guidance on related suspicious activity reporting.

• Integration of Targeted Financial Sanctions into the supervisory programme, supported by guidance and engagement with reporting entities.

• Establishment of an industry advisory group, providing reporting entities with a formal mechanism to engage on system performance and direction.

• Preparation for New Zealand’s next FATF mutual evaluation, supporting continued access to global financial markets.

For banks, the work programme also includes regular off-site and on-site supervision of the five major banks (ANZ, ASB, BNZ, Westpac NZ, and Kiwibank), with all other banks subject to onsite inspection at least once every five years.

Why should reporting entities engage?

The consultation provides an opportunity for reporting entities to influence how the levy framework is designed and implemented. Feedback is expressly sought on issues including:

• Whether the proposed allocation of costs between sectors is appropriate.

• Whether the proposed levy structure and exemptions are fit for purpose.

• How levy contributions should be calculated and collected.

• Whether 2026/27 costs (which are being spent before the levy is collected) should be recovered over five years or in a single year.

Given that the levy will be an ongoing, recurring cost, reporting entities that do not engage risk being bound by a framework that may not adequately reflect their risk profile, size, or operating model. Early engagement is therefore critical to ensuring the final levy is proportionate, transparent, and workable.

Next steps

Submissions close at 5.00pm on Friday 10 April 2026. They can be made online via the Ministry of Justice consultation hub, by email to aml@justice.govt.nz (subject line: “Levy submission”), or by post to AML/CFT policy, Ministry of Justice – National Office, DX SX10088, Wellington.

Reporting entities should review the consultation document, assess the potential impact on their operations, and consider whether to make a submission, either individually or through industry bodies.

We would be happy to assist clients to assess how the proposed levy may affect their business or to prepare a submission. 

Meet the DIA

As part of our ‘Meet the Regulator’ seminar series, we will be hosting a Q&A session with the Department of Internal Affairs (DIA) for clients in Auckland on 24 June 2026. This will be a chance to hear directly about the transition to a single AML/CFT supervisor (likely to take effect from 1 July 2026) and what DIA’s supervisory approach is likely to look like in practice.

Clients are welcome to submit questions for the DIA in advance by contacting any of the experts listed below. An invitation to the event will be circulated shortly.