Financial Crime World

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Anti-Money Laundering and Counter-Terrorist Financing Measures in New Zealand

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The Financial Action Task Force (FATF) and the Asia-Pacific Group (APG) have assessed the anti-money laundering (AML) and counter-terrorist financing (CFT) measures in New Zealand, providing an overview of the country’s framework and highlighting both strengths and weaknesses.

Key Findings

Some key points from the report include:

Comprehensive Risk Assessment

  • New Zealand has a comprehensive understanding of money laundering/terrorist financing (ML/TF) risks associated with legal persons and arrangements.

Regulatory Frameworks

  • New Zealand has implemented specific measures to mitigate identified ML/TF risks, including creation of a register of foreign trusts and an Integrity and Enforcement Team.

International Cooperation

  • New Zealand has a sound legal basis for providing and seeking mutual legal assistance (MLA) and extradition in relation to ML/TF and associated predicate offenses.

Weaknesses

The report identifies several weaknesses, including:

  • Insufficient Measures: Nominee directors and shareholders have not been adequately addressed.
  • Inadequate Mechanisms: Authorities do not have sufficient mechanisms to obtain accurate beneficial ownership information for legal persons.
  • Lack of Sanctions: Sufficient sanctions are not applied to individuals and breaches of information requirements for certain structures (e.g., partnerships, trusts).

Recommendations

The report provides recommendations for improvement, including:

  • Improving Beneficial Ownership Information: Ensuring the availability of accurate beneficial ownership information on legal persons and domestic trusts.
  • Enhancing Sanctions: Ensuring supervisors have a sufficient range of proportionate sanctions available.
  • Consolidating Implementation: Consolidating implementation of Phase 2 of the AML/CFT Act.

Technical Compliance Ratings

The report also includes technical compliance ratings, which assess New Zealand’s compliance with specific requirements related to AML/CFT measures. The effectiveness and technical compliance ratings are provided in two tables:

Effectiveness Ratings

This table provides a level of effectiveness for each of the 11 International Obligations (IO), ranging from High (HE) to Low (LE).

Technical Compliance Ratings

This table assesses New Zealand’s technical compliance with specific requirements, such as assessing risk and applying a risk-based approach (R.1), national cooperation and coordination (R.2), money laundering investigation and prosecution (R.7), and others.

Conclusion

The report concludes that while New Zealand has made progress in implementing AML/CFT measures, there are still areas for improvement to strengthen its framework.