Financial Crime World

New Zealand Must Step Up Efforts to Prevent Financial Crime, Report Says

A recent review by the Financial Action Task Force (FATF) and the Asia-Pacific Group on Money Laundering (APG) has found that New Zealand’s anti-money laundering and counter-terrorism financing system is delivering good results but still needs improvement. The report highlights several areas where the country can do more to strengthen its AML/CFT system.

Key Findings

  • New Zealand faces significant money laundering threats from proceeds of crime generated both domestically and internationally.
  • The country’s large-scale terrorist financing risks are mainly related to overseas-based groups, but it has developed a robust understanding of these risks through a comprehensive multi-tiered risk assessment process.
  • Measures to stop money laundering in the non-financial sector are new and businesses need to better understand and mitigate their risks.

Improvement Areas

  • Improving the availability of beneficial ownership information
  • Strengthening supervision
  • Implementing targeted financial sanctions more effectively

Effective Use of Financial Intelligence and Investigation Tools

The report praises New Zealand for its effective use of financial intelligence and investigation tools to support money laundering investigations, prosecutions, and criminal asset recovery. It also commends the country’s cooperation with international partners to combat money laundering and terrorist financing.

Gaps in Implementation of Targeted Financial Sanction Measures

  • The report highlights gaps in New Zealand’s implementation of targeted financial sanction measures, which are essential to preventing funds from being used for domestic terrorist attacks.
  • The country has taken steps to mitigate money laundering risks associated with legal persons and arrangements but could be undermined by loopholes regarding beneficial ownership and nominee directors and shareholders.

Conclusion

The FATF report provides a comprehensive assessment of New Zealand’s AML/CFT system and highlights areas where the country can improve to prevent financial crime. By addressing these gaps, New Zealand can further strengthen its efforts to combat money laundering and terrorist financing.