Financial Crime World

New Zealand’s Anti-Money Laundering and Counter-Terrorism Financing Regime Under Scrutiny

The Financial Action Task Force (FATF) has released its Mutual Evaluation report on New Zealand, highlighting areas of improvement in the country’s anti-money laundering (AML) and counter-terrorism financing (CFT) regime. The report provides recommendations for improvement to strengthen New Zealand’s AML/CFT regime and prevent the misuse of financial systems.

The report identifies gaps in New Zealand’s legal framework, particularly with regards to:

  • Beneficial ownership information: Lack of a central source of beneficial ownership information makes it difficult for reporting entities to conduct enhanced customer due diligence (CDD) processes.
  • Nominee directors and shareholders: Measures have been implemented to mitigate the potential for misuse, but there are still areas where improvement is needed.

Recommendations

The FATF recommends that New Zealand:

  • Introduce measures to improve the availability of accurate and up-to-date beneficial ownership information on legal persons and domestic express trusts.
  • Review and strengthen its mutual legal assistance and extradition regime to improve efficiency.
  • Maintain better statistics on mutual legal assistance, extradition, and exchanging basic and beneficial ownership information of legal persons and arrangements.

International Cooperation

The FATF highlighted the importance of international cooperation in combating money laundering and terrorist financing. New Zealand was commended for:

  • Constructive and timely mutual legal assistance and extradition requests
  • Effective informal international cooperation with other jurisdictions

However, the report recommends that New Zealand review its mutual legal assistance and extradition regime to improve efficiency.

Timeline for Implementation

New Zealand has until June 2022 to implement the recommended improvements to its AML/CFT regime. The FATF’s Mutual Evaluation process assesses a country’s AML/CFT regime against international standards set by the organization, providing recommendations for improvement to help countries strengthen their regimes.

Conclusion

The FATF’s Mutual Evaluation report highlights areas of improvement in New Zealand’s anti-money laundering and counter-terrorism financing regime. By implementing the recommended improvements, New Zealand can strengthen its AML/CFT regime and prevent the misuse of financial systems.