26 SEPTEMBER 2013 NEW ZEALAND GAZETTE, No. 131 3679

maximise those government contributions set out in section MK 4 of the Income Tax Act 2007.

(e) With the exception of Australian superannuation transfers to the SRFKS, customer due diligence in accordance with sections 10–36 of the Act and suspicious transaction reports in accordance with sections 40–48 of the Act are required on all transfers to the Schemes from international sources.

3. The exemption has been granted for the following reasons:

(a) The Trustees’ only duties as a reporting entity under the Act are in respect of the Schemes;

(b) the Schemes pose a very low risk of money laundering or terrorism financing;

(c) any risks posed by voluntary contributions outside of payroll have been covered off by conditions;

(d) due to the very low money laundering and terrorism financing risks raised by the Schemes and the significant compliance costs that would arise from not granting this exemption, I consider that any benefits of requiring compliance with the Act are not justified by the associated costs; and

(e) this exemption is consistent with (and has no effect on the purpose or intent of) the Act, the Financial Transactions Reporting Act 1996 and New Zealand’s international obligations as a member of the Financial Action Taskforce and the Asia Pacific Group on Money Laundering.

4. This exemption comes into force on the day after the date I grant this exemption (granted 8 September 2013).

5. This exemption will expire on 30 June 2018.

Ministerial Exemption: The New Zealand Guardian Trust Company Limited

1. As the Minister of Justice and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ("the Act"), I exempt The New Zealand Guardian Trust Company Limited (NZGT) (and any of its wholly owned subsidiaries ("NZGT Subsidiary") and any other person that may be nominated by the Crown ("Crown Nominee") to perform one or more of the activities described in this exemption), in relation to NZGT’s role as instalment receipt trustee for the initial public offer by the Crown of shares in Meridian Energy Limited ("Meridian"), from the Act.

2. This exemption has been made for the following reasons:

(a) For commercial reasons, the share offer by the Crown of shares in Meridian Energy Limited (the share offer) will be structured to allow investors to buy shares using a "split payment" method:

(i) Investors subscribe for the amount of shares they wish to hold in Meridian, but instead of paying the full subscription amount and receiving their shares straight away, investors will instead pay some of the purchase price upfront and receive an "instalment receipt" of the shares subscribed to;

(ii) Each instalment receipt entitles the holder to a share upon the Crown receiving a final instalment at a specified date in the future;

(iii) NZGT or an NZGT Subsidiary will hold the shares on trust for investors until the final instalment is required to be paid, following which the shares will be released;

(b) In relation to NZGT’s role as instalment receipt trustee for the share offer, NZGT (or an NZGT Subsidiary) may have to perform a number of financial activities, in relation to:

(i) paying any dividends to the instalment holders;

(ii) enforcing payment to the Crown of an outstanding instalment and applying the recovered amounts to the Crown and certain other persons as set out in the trust deed;

(iii) transferring ownership of shares once the final instalment is received;

(c) If there are any unpaid amounts still owing after the date the final instalment is due, the Crown Nominee may be directed to carry out one or more of the financial activities described in this exemption in relation to recovering the unpaid amount rather than NZGT.

(d) An exemption is justified because:

(i) If Meridian were to offer shares itself, it is unlikely that Meridian would be subject to any Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) obligations; it is largely a result of the different structure necessary to accommodate a split payment option that AML/CFT obligations apply to the share offer;

(ii) If the Crown were to issue the instalment receipts, although these instalment receipts could result in funds being repayable to the public in the event that the final instalment is not paid, it is likely that the exemption in Regulation 23 of the Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011 would apply;

(iii) Granting an exemption would not have a material impact on the risks of money laundering or terrorist financing given there is no material difference in such risks between the share offer and an offer where the Crown offered the instalment receipts itself;

(iv) There would be undue compliance difficulties and costs if NZGT (or an NZGT Subsidiary or Crown Nominee) were required to comply with AML/CFT obligations, for example:

(A) performing customer due diligence on the potentially large numbers of investors where investors also have the ability to trade the receipts on the secondary market;

(B) the finite period of time that NZGT will be instalment receipt trustee;

(v) There are no clear reasons justifying different regulatory treatment between the share offer and an offer where the Crown offered the instalment receipts itself, and in the absence of an exemption this may result in a competitive disadvantage for the share offer;

(vi) Accordingly an exemption from the Act for NZGT (or an NZGT Subsidiary or Crown Nominee) in respect of NZGT’s activities as instalment receipt trustee is justified.

3. This exemption comes into force on the day after the date I grant this exemption (granted 17 September 2013).

4. This exemption will expire on 30 June 2018.

Any person wishing to provide comment on these notices should contact the Criminal Law Team at the Ministry of Justice:

international.crime@justice.govt.nz