AML/CFT Guide for High-Value Dealers in New Zealand

Part 1

When AML/CFT May Apply

The first question is whether the transaction is prohibited. The second is whether the dealer remains a high-value dealer reporting entity for a permitted category and cash transaction.

• Buying or selling paintings, prints, sculptures, photographs, carvings or specified cultural objects for cash at the legal threshold where the high-value dealer definition is met.
• Linked or related cash transactions that together meet the threshold.
• A separate captured financial activity may create additional reporting-entity duties on its own legal basis.

Part 2

Main Risks in This Sector

These are practical indicators for recognising higher-risk, linked or suspicious cash activity. They do not expand the high-value dealer duties beyond the current Act and regulations.

• Portable art and cultural objects can store and move high value.
• Cash and related payments can hide source and beneficial ownership.
• Pricing and provenance can be subjective or manipulated.
• Agents, companies and overseas buyers can hide the real customer.
• Refunds, exchanges and resale can redirect apparently legitimate value.

Part 3

A Practical Control Plan

1. Step 1

   Confirm scope

   List the goods sold and separate prohibited cash categories from any remaining high-value dealer category.

2. Step 2

   Build the customer process

   Build a hard stop for prohibited cash and related transactions of $10,000 or more.

3. Step 3

   Set the risk controls

   Detect linked payments across dates, staff, stores, buyers and sellers.

4. Step 4

   Train and connect people

   For qualifying art or artefact cash transactions of NZ$10,000 or more, complete standard CDD, do not proceed if required CDD cannot be completed, keep records, submit the prescribed transaction report and consider whether a voluntary SAR is appropriate.

5. Step 5

   Test and improve

   Train staff on refusal, escalation, suspicious activity and confidentiality.

Part 4

Worked Examples

These examples show how the scope and risk questions can be joined. They do not replace the law or the facts of a real matter.

Part 5

Evidence That Should Be Easy to Find

• The high-value dealer status, goods category, cash threshold and linked-transaction analysis.
• The current official sources used for the decision.
• A goods and payment-method map showing prohibited and covered activity.
• A linked-transaction control across invoices, customers and stores.
• CDD, provenance, source, payment, prescribed-report and voluntary-SAR records.
• Clear refusal, refund, exchange and suspicious-activity procedures.
• Standard CDD, prescribed-transaction reports and any voluntary-SAR decision records.
• Training and internal checks for prohibited and qualifying covered cash transactions.

Part 6

Common Mistakes

• Accepting CDD as a way to proceed with a prohibited cash transaction.
• Looking at related instalments separately.
• Assuming every high-value card or bank-transfer sale creates high-value dealer duties.
• Identifying an agent but not the person behind them.
• Forgetting that high-value dealers have a different independent-audit rule.