In accordance with section 157(6)(b) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“Act”), the Associate Minister of Justice hereby gives notice that he has granted the following exemption from the Act:
Ministerial Exemption: New Zealand Local Government Funding Agency Limited
- In this exemption, unless the context otherwise requires:
council-controlled organisation has the meaning given to it in the Local Government Act 2002.
Exemptions Regulations means the Anti-Money Laundering and Countering Financing of Terrorism (Exemptions) Regulations 2011.
LGFA means New Zealand Local Government Funding Agency Limited.
local authority has the meaning given to it in the Local Government Act 2002.
- As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, I exempt New Zealand Local Government Funding Agency Limited (NZBN: 9429030861961) from the following provisions of the Act:
- Sections 10–71 inclusive.
- This exemption is made subject to the following conditions:
- LGFA must remain a council-controlled organisation.
- LGFA must inform the Ministry of Justice of any changes that may affect the exemption and/or conditions imposed by this written instrument within 14 days from when the change affecting the exemption occurs.
- This exemption has been made for the following reasons:
- Lending to local authorities (including by subscribing for securities issued by local authorities) is the only part of LGFA’s business that is subject to the Act.
- Pursuant to section 18 of the Act, simplified customer due diligence may be undertaken in respect of customers that are local authorities. This reflects the lower risk for money laundering or financing of terrorism where a reporting entity has a business relationship with a local authority.
- LGFA was established as a vehicle to give local authorities the ability to collectively access the debt capital markets. LGFA’s principal activities are to borrow funds in the debt capital markets and to on-lend those funds to local authorities. The function that LGFA performs is therefore very similar to that of a corporate treasury company, particularly given that the majority of LGFA’s issued capital is owned by local authorities. However, LGFA is not able to rely on the exemption which ordinarily applies to corporate treasury companies (the exemption for relevant services provided to related entities in Regulation 16 of the Exemption Regulations) because it is widely held by the Crown and 30 local authorities.
- LGFA is a council-controlled organisation, pursuant to the Local Government Act 2002.
- The Local Government Borrowing Act 2011 was enacted to facilitate the operation of LGFA and exempts LGFA from certain regulatory and tax criteria.
- This exemption comes into force on the day after the date I grant this exemption.
- This exemption will expire on 30 June 2020.
Any person wishing to provide comment on this notice should contact the Criminal Law Team at the Ministry of Justice by emailing firstname.lastname@example.org.