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Financial Action Task Force Guidelines in New Zealand Under Scrutiny

New Zealand has recently released its Follow-Up Report 2024, detailing the country’s progress in implementing the technical requirements of the Financial Action Task Force (FATF) Recommendations. The report assesses New Zealand’s compliance with FATF guidelines, which aim to combat money laundering and terrorist financing.

Compliance Progress

According to the report, New Zealand has made significant strides in implementing FATF standards. Of the 40 recommendations:

  • 14 are compliant, indicating that they fully meet international requirements.
  • 8 are largely compliant, meaning that while there may be some minor issues, overall implementation is satisfactory.
  • 16 are partially compliant, with some areas requiring improvement.

Key Areas of Strength

New Zealand has shown strong compliance in several key areas:

  • Risk Assessment and Risk-Based Approach (R.1): The country has demonstrated effective risk assessment and application of a risk-based approach.
  • National Cooperation and Coordination (R.2): New Zealand has implemented national cooperation and coordination mechanisms to combat money laundering and terrorist financing.
  • Confiscation and Provisional Measures (R.4): The country has shown good progress in implementing confiscation and provisional measures to prevent the misuse of funds.

Areas for Improvement

The report highlights concerns regarding:

  • Regulation and Supervision of Financial Institutions (R.26): New Zealand needs to improve its regulation and supervision of financial institutions.
  • Powers of Supervisors (R.27): The country requires improvement in the powers of supervisors to combat money laundering and terrorist financing.
  • Mutual Legal Assistance (R.37): New Zealand needs to strengthen its mutual legal assistance mechanisms.

Additionally, some recommendations have been rated “non-compliant” or “partially compliant”, including:

  • Reporting of Suspicious Transactions (R.20): The country requires improvement in reporting suspicious transactions.
  • Tipping-Off and Confidentiality (R.21): New Zealand needs to improve its tipping-off and confidentiality measures.

Conclusion

The Follow-Up Report 2024 provides a comprehensive assessment of New Zealand’s progress in implementing FATF guidelines and identifies areas for improvement. The report is expected to inform the country’s future efforts to combat money laundering and terrorist financing, as well as its engagement with international partners and authorities.