Financial Crime World

New Zealand’s Anti-Terrorist Financing Measures Receive Thumbs Up from International Watchdogs

A comprehensive review by two leading international organizations has praised New Zealand’s efforts to prevent terrorist financing, but also highlighted areas that require improvement. The Financial Action Task Force (FATF) and the Asia-Pacific Group on Money Laundering (APG) assessed New Zealand’s anti-money laundering and counter-terrorist financing system, finding that it is generally effective in combating money laundering and terrorist financing.

Overview of the Review

The review notes that New Zealand faces significant money laundering threats from both domestic and international sources, with large-scale terrorist financing risks emanating from overseas-based groups. However, the country has implemented a robust AML/CFT system that includes the effective use of financial intelligence and investigation tools to support money laundering investigations and prosecutions.

Key Findings

  • New Zealand’s authorities have demonstrated strong cooperation with international partners in combating money laundering and terrorist financing.
  • The country has taken steps to mitigate the risks associated with legal persons and arrangements.
  • However, there are several areas where improvement is needed:

Beneficial Ownership Information

  • Loopholes regarding nominee directors and shareholders could undermine the availability of beneficial ownership information.

Targeted Financial Sanctions

  • Gaps in New Zealand’s implementation of targeted financial sanction measures, particularly following the Christchurch attack in March 2019.

Supervision of the Banking Sector

  • Greater resourcing is needed to address the risks associated with supervising the banking sector.

Non-Financial Sector

  • While new AML/CFT measures have been implemented, businesses need to better understand and mitigate their own money laundering and terrorist financing risks.

Conclusion

Overall, while New Zealand’s anti-terrorist financing measures have delivered good results, there is still work to be done to address the remaining gaps and ensure that the country remains vigilant in its efforts to prevent terrorist financing.