Financial Crime World

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Executive Summary

New Zealand has made significant progress in implementing anti-money laundering (AML) and counter-terrorist financing (CTF) measures, but there are still areas for improvement.

Overview of New Zealand’s AML/CFT Regime

Introduction

New Zealand has a robust AML/CFT regime that covers financial institutions (FIs), designated non-financial businesses and professions (DNFBPs), and virtual asset service providers (VASPs).

Regulatory Oversight

The Financial Intelligence Unit (FIU) oversees the regime, with three supervisors: the Reserve Bank of New Zealand (RBNZ), the Financial Markets Authority (FMA), and the Department of Internal Affairs (DIA).

Terrorist Financing

New Zealand has a dedicated unit responsible for monitoring possible terrorism financing within the FIU and in the National Security Group (NSG) of the New Zealand Police. However, there are no competent authorities to supervise financial institutions or DNFBPs for compliance with their terrorist financing obligations.

Preventive Measures

  • Financial Institutions (FIs), DNFBPs, and most VASPs are covered under the AML/CFT Act as reporting entities.
  • Moderate shortcomings in the AML/CFT Act:
    • Political exposed persons (PEPs)
    • Money value transfer services (MVTS)
    • Wire transfers
    • Internal controls
    • Higher-risk countries
    • Dealers in precious metals and stones (DPMS)
    • Definition of trust and company service providers (TCSP)
    • Real estate customer due diligence obligations

Supervision

New Zealand has three supervisors that oversee compliance with AML/CFT obligations. However, no agency has a mandate to supervise the implementation of terrorist financing obligations.

Supervisory Measures

  • Effective licensing and registration measures for FIs and VASPs
  • Some technical deficiencies were identified in the licensing process

Remedial Actions

Supervisors generally apply remedial actions in an effective manner. However, the range of sanctions powers available to supervisors under the AML/CFT Act is inadequate.

Sanctions Powers

  • Low range of pecuniary penalties available
  • Lack of administrative penalties