Anti-money laundering monitoring starts this month
New Zealand regulators will this month start monitoring financial institutions to stamp out money laundering that could be worth up to $1.5 billion.
As part of a new anti-money laundering regulatory regime starting June 30, the Reserve Bank, the Department of Internal Affairs and the Financial Markets Authority will start monitoring financial institutions in an attempt to prevent criminals from disguising the illegal origins of their money.
"New Zealand cannot afford to be seen as a weak link in the chain of international efforts to tackle money laundering and the financing of terrorism," Reserve Bank anti-money laundering manager Rob Edwards told a seminar on the issue in Wellington.
"New Zealand has comparatively low rates of crime and corruption, but we are not immune."
Regulators will initially focus on monitoring and compliance to ensure financial institutions can detect and report suspicious activity as the new regime beds in, Mr Edwards said. Financial institutions that breach the rules but are deemed to have made a genuine effort will likely face supervision at this stage rather than enforcement.
New Zealand needs to secure a favourable review of its anti-money laundering regime from the international Financial Action Task Force in 2016 to enhance its business reputation, Mr Edwards said.
"A weak AML regime and an unfavourable assessment by FATF would damage New Zealand's international reputation and the prospects of New Zealand businesses on the international stage. It would also increase the likelihood that organised criminal groups and financiers of terrorism will try to exploit New Zealand's financial system."
The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 aims to prevent money-laundering by criminals and funding of terrorist attacks as well as enhance New Zealand's international business reputation.