New Zealand's banks and financial institutions have been given a grace period to comply with new laws on money laundering and financing of terrorism due to IT "complexities".
Prescribed Transactions Reporting (PTR) regulations come into force today under the Anti-Money Laundering and Countering Financing of Terrorism Act.
The new rules require banks to submit all transactions to the police's financial intelligence unit (FIU) under an amended threshold.
Police will be given details on all cash transactions of $10,000 or more, and all international wire transfers and inward international wire transfers from New Zealand of $1000 or more.
The Herald revealed in March that customer details now submitted to police will include names, account numbers, types and amounts of funds, locations, addresses, phone numbers, and "any other identifying information".
The move prompted some fears of privacy erosion.
However, the Ministry of Justice has allowed a "transition period" for banks and financial entities that are automating their reporting.
A deadline of July 1, 2018 was set due to the apparent difficulty that automated systems would at present be non-compliant with the law.
New Zealand Bankers' Association chief executive Karen Scott-Howman told the Herald that the extension was given due to "complexities involved in automating prescribed transaction reports".
"The banking industry fully supports the aims of the AML/CFT regime, including the need to report transactions over certain thresholds. We also take compliance with legal requirements very seriously," she said.
"We have been working with the Ministry of Justice, the Reserve Bank and the police to ensure banks can meet their obligations under the act."
Scott-Howman said New Zealand's banks had made a lot of progress on their IT solutions, with "some already at the testing stage".
"We have no issues with the particular thresholds set by the Government. The main concern for the banking industry is being able to meet its obligations within statutory deadlines, in consultation with other parties."
However, the FIU will still be accepting automated PTRs from today, while banks and financial institutions submitting manually to the FIU are expected to comply immediately.
"In recognition of the need to ensure smooth implementation of automated reporting, a transitional compliance period for automated PTRs will apply until 1 July 2018," the Ministry of Justice said in a memo to banks about compliance requirements.
"Reporting entities submitting automated reports will be expected to provide PTRs as soon as they are able from 1 November 2017. However, reporting entities will not be considered non-compliant prior to the end of the transitional compliance period [1 July 2018]."
Any non-compliance beyond July 1 next year will be considered a breach of the act, the ministry said.
According to police statistics, 8989 transactions were reported to them in 2016 with a total value of $6.06 billion - an increase in value from 2015 when 10,247 transactions were reported at a value of $3.7b.
Of those transactions, police estimate $1.6b in dirty money was being laundered annually.