Terrorism Financing Laws in New Zealand Get Thumbs Up, But Room for Improvement
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A comprehensive review by the Financial Action Task Force (FATF) and the Asia-Pacific Group on Money Laundering (APG) has assessed New Zealand’s anti-money laundering and counter-terrorist financing system. The report highlights that the country is delivering good results in combating money laundering and terrorist financing, but there are areas that require attention.
Good Results, But Room for Improvement
New Zealand faces significant money laundering threats from both domestic and international sources. However, the country has implemented a robust AML/CFT system, which includes the effective use of financial intelligence and investigation tools to support money laundering investigations and prosecutions.
The report notes that New Zealand’s three AML/CFT supervisors have a good understanding of the money laundering and terrorist financing risk profiles of their respective sectors. However, there is scope for improvement in the use of sanctions. The banking sector requires greater resourcing to ensure effective supervision.
Challenges Ahead
While New Zealand has taken steps to mitigate the risks associated with legal persons and arrangements, loopholes regarding beneficial ownership and nominee directors and shareholders could undermine these efforts.
The report highlights that New Zealand’s authorities remain vigilant following the Christchurch attack in 2019. They have conducted thorough, quick, and well-coordinated investigations into terrorist financing. However, there are gaps in the implementation of targeted financial sanctions.
Recommendations for Improvement
To further improve its system and prevent the misuse of funds for illegal activities, New Zealand must focus on addressing the following areas:
- Improving the availability of beneficial ownership information
- Strengthening supervision, particularly in the banking sector
- Implementing targeted financial sanctions more effectively
By addressing these areas, New Zealand can continue to deliver good results in combating money laundering and terrorist financing, while also ensuring that its system is robust and effective.
Conclusion
In conclusion, while New Zealand’s anti-money laundering and counter-terrorist financing efforts are delivering good results, the country must focus on addressing the challenges ahead to further improve its system. By doing so, it can prevent the misuse of funds for illegal activities and continue to be a leader in combating terrorism financing.