A purchaser pays the agency a $12,000 deposit in banknotes, which the agency banks into its trust account. Nothing about the payment seems suspicious. What reporting obligation arises under s 48A of the AML/CFT Act 2009?
Correct Answer
C) A prescribed transaction report within 20 working days of the transaction.
A domestic physical cash transaction of $10,000 or more through a reporting entity is a prescribed transaction. Section 48A requires the reporting entity to report it to the Commissioner as soon as practicable and no later than 20 working days after the transaction. Suspicion is not needed; the report is triggered by the cash amount.
Why This Is the Correct Answer
Cash of $12,000 is over the $10,000 threshold, so a prescribed transaction report is due within 20 working days.
Why the Other Options Are Wrong
Option A: None, because the payment raised no suspicion of money laundering.
Prescribed transaction reports are required for physical cash of $10,000 or more whether or not anything is suspicious.
Option B: A suspicious activity report within 3 working days of receiving the cash.
A suspicious activity report needs grounds for suspicion; a cash payment at the threshold alone requires a prescribed transaction report.
Option D: A report to the Real Estate Authority at the next trust account audit.
Prescribed transaction reports go to the Police Commissioner, not to the Authority through the trust account audit.
Background Knowledge for Compliance
Source: https://www.legislation.govt.nz/act/public/2009/0035/latest/whole.html
Exam Tip for Compliance
Cash of $10,000 or more = prescribed transaction report, whatever the purpose of the payment.
Common Mistakes to Avoid on Compliance Questions
- •Thinking a report is needed only when something seems suspicious.
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