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The Russia Sanctions Act imposes obligations on ‘duty holders’ as reporting entities under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the AML/CFT Act) or any other person declared a duty holder by subsequent regulations.

The Regulations have declared a number of people as duty holders. See Regulation 19(external link) for details.

Summary of obligations for duty holders

There are three types of obligation imposed on duty holders: assets and services obligations, reporting obligations and due diligence/monitoring obligations.

Assets and services obligations

The Russia Sanctions Act imposes a range of prohibitions on dealing with assets and services:

New Zealand persons (as defined in the Regulations) are prohibited from dealing with the assets of sanctioned individuals and entities. One effect of this prohibition is that designated individuals and entities and their associates are prevented from using any assets they hold in New Zealand (essentially an asset freeze). This includes bank accounts and personal property.
In addition, New Zealand persons must not deal with any asset if doing so would be for the benefit of a sanctioned person.
New Zealand persons are prohibited from dealing with a security of a sanctioned person if doing so would result in the sanctioned person acquiring the security, owning or controlling the security, or would otherwise be for the benefit of a sanctioned person.
New Zealand also prohibits services being extended to, offered to, or received from sanctioned individuals or entities.

Reporting obligations

Under the AML/CFT Act, duty holders are required to report certain suspicions to the Police in relation to certain assets, services and persons. The list of designated assets, services and persons are set out in the Regulations and in the sanctions register.

AML/CFT duty holders report suspicious sanctions-related activity through the goAML(external link) portal, using the same process as for AML/CFT suspicious activity reports.

If you are not a duty holder for AML/CFT purposes report using the process outlined on the Police 105 website(external link).

Due diligence obligations

While duty holders have specific obligations in the Act, all New Zealand persons who may deal with restricted persons, assets and services must ensure that they are not in breach of the sanctions. This will involve some level of due diligence checks, depending on the type and risk of activity, to ensure the individuals or entities connected with a proposed activity are not subject to relevant sanctions.

Guidance and useful links

FAQs on the financial sector

Why is my bank not allowing me to make or receive payments to Russia?

Banks are required to comply with relevant sanctions imposed by New Zealand under the Russia Sanctions Act. Banks may also comply with sanctions imposed by other countries. This means that if an individual or entity is sanctioned by another country, it is possible that banks in New Zealand will refuse to engage in transactions related to them. SWIFT restrictions imposed on Russian banks can also make international payments very challenging.

In these instances, we encourage you to speak to your bank in the first instance about why a payment has been blocked and seek legal advice on options. You may also contact the Banking Ombudsman for any complaints.

What if we have clients in Russia and former Soviet States that have bank accounts outside of Russia or their country?

Why are Russian pensions not being paid to individuals?

We have issued guidance to New Zealand banks to make it clear that individuals in New Zealand who previously received a Russian pension can continue to receive their payments under our sanctions regime. However, we understand that because of the nature of international banking, payments are not arriving into New Zealand. We continue to work with other relevant government agencies to find a practical solution.