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New Zealand’s anti-money laundering and counter-terrorism financing measures have been marked as adequate but a review has identified some gaps.
The latest report from the Financial Action Task Force, the global watchdog for money laundering and terrorist financing, assesses the risks New Zealand faces and looks at what laws and measures are in place and how well they are working.
It praised New Zealand for its work in recovering the proceeds of crime and for agencies’ ability to work together to use intelligence to investigate suspected crimes and trace and seize illicit assets.
“The New Zealand Police Financial Intelligence Unit (FIU) produces and disseminates a wide range of financial intelligence products, which generally support the operational needs of competent authorities,” the report said.
“However, New Zealand authorities could benefit from better exploiting the potential of financial intelligence to detect criminal activity by persons not already known to law enforcement.”
It found New Zealand could improve transparency around the true owners of companies, for example, shell companies and trusts which could be used to launder money.
Awareness among organisations responsible for carrying out money laundering checks also varied.
“Reporting entities’ understanding and implementation of their AML/CFT (anti-money laundering and countering financing of terrorism) obligations are mixed, with a better understanding and implementation in larger and more sophisticated reporting entities.”
It recommends better supervision of financial institutions, lawyers and accountants’ efforts to detect money laundering which have only been captured by AML/CFT legislation since 2018.
The task force also noted that New Zealand’s laws around targeted financial sanctions (TFS) – which usually involves the freezing of assets – were strong, but suggested ensuring supervisors have adequate powers and that there is good awareness of those powers.
“No assets have been frozen in New Zealand pursuant to TFS regimes,” said the report.
“While this may be consistent with New Zealand’s risk profile, it could also reflect the limited TFS guidance, and the lack of outreach and supervision on TFS.”
It also recommended New Zealand push to sustain the recent increase in money laundering prosecutions, by monitoring trends and outcomes through better data and statistics and considering the development of money laundering prosecution guidelines.
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