New Zealand Remains Compliant with FATF Guidelines Despite Global Updates
The Financial Action Task Force (FATF) has recently released its latest update of “high risk and other monitored jurisdictions” on October 18, with New Zealand maintaining its compliance status.
International Efforts to Combat Money Laundering and Terrorist Financing
Established in 1989, the FATF aims to establish standards and promote the effective implementation of measures to combat money laundering, terrorist financing, and other related threats. The international body works closely with countries to identify and address deficiencies in their Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT) systems.
Latest Updates
In its latest update, FATF has added four new jurisdictions to the list: Iceland, Mongolia, New Zealand, and Zimbabwe. These countries have been identified as having strategic AML/CFT deficiencies and have developed action plans with FATF to address these shortcomings.
On the other hand, Ethiopia, Sri Lanka, and Tunisia have been removed from the list, no longer subject to FATF’s ongoing monitoring process.
Enhanced Customer Due Diligence Requirements
The update serves as a timely reminder for reporting entities in New Zealand to conduct an enhanced level of customer due diligence on non-resident customers from countries with insufficient AML/CFT systems or measures. This includes:
- Additional requirements to monitor and examine business relationships
- Examination of transactions involving these countries
- Necessary restrictions on dealing with them
Country Risk Requirements
It’s crucial to note that the level of money laundering and terrorist financing risk associated with a country extends beyond its AML/CFT measures. Factors such as high levels of organized crime, bribery or corruption, borders with conflict zones, or association with illicit drug production and transnational shipment can also contribute to elevated risk.
For further information on country risk requirements under the AML/ CFT Act, please refer to the AML/ CFT supervisors’ Countries Assessment Guideline.