Understanding the New AML Laws and What They Mean for Businesses

Simplified Customer Verification

The clearest change is the removal of the requirement to verify a customer’s physical address during standard customer due diligence. For many businesses operating under the AML/CFT Act — including financial institutions, law firms, real estate agencies, accountants, and other reporting entities — this addresses one of the most time-consuming and frustrating compliance steps.

As Associate Justice Minister Nicole McKee notes, unclear AML rules have long pushed businesses into “overly conservative, box-ticking compliance.”

By eliminating address verification for standard due diligence, organisations can expect:

• Faster onboarding for new customers
• Reduced administrative burden on staff
• Fewer delays for low-risk transactions
• Improved customer experience, especially for individuals who struggle to provide proof of address

These changes apply to basic transactions and standard risk profiles — not enhanced due diligence, suspicious activity, or high-risk customers, where stricter checks will still be required.

What Businesses Should Do Now

While the reform seems simple on its face, any AML adjustment requires careful operational updates. Businesses should:

• Review and update AML programmes, including policies and procedures
• Train staff to understand when address verification is no longer needed
• Update onboarding platforms and templates used for due diligence
• Continue to apply risk-based assessments, as the core AML obligation has not changed
• Prepare for further reforms, with more substantial changes expected as part of the Government’s wider AML/CFT overhaul

This is only the first step in a broader effort to make the AML regime “risk-based and proportionate,” with the goal of reducing costs while improving the system’s focus on genuine criminal risk.

Looking Ahead

These amendments are welcome news for honest businesses that have grappled with disproportionate compliance costs. But they also represent a transition period: organisations must balance the benefit of simplified checks with the ongoing responsibility to detect and prevent money laundering. As further reforms are planned, including structural and risk-assessment changes, businesses will need to remain agile and maintain robust compliance frameworks.