Every year, an estimated $1.35 billion from fraud and illegal drugs is laundered through legitimate New Zealand businesses.

The AML Group

As a regulator, the Department of Internal Affairs (DIA) Anti-Money Laundering and Countering Financing of Terrorism Group exists to supervise and support reporting entities to comply with New Zealand’s AML/CFT Act.

The Report

Just recently, the AML/CFT Group released their regulatory findings report, which provides insight into the key findings emerging from compliance assessments undertaken during the 12 months prior to June 30, 2020.

In preparing the report, the AML/CFT group completed desk-based reviews and on-site inspections to determine the effectiveness of the development and implementation of reporting entities AML/CFT policies, procedures and controls.

By sharing the findings of these assessments, as well as common areas of compliance and non-compliance, the report aims to help reporting entities (RE’s) maintain good practices and identify areas where they can improve systems and procedures to effectively meet their obligations.

Key Findings

Within this report, the following areas of good practice were identified:

  • Written documentation: Written documentation should be complete, kept up to date (and with version control), and cover all relevant obligations specific to each, to ensure maximum effectiveness.

  • Generic content: This documentation should not be generic in nature. While generic content is useful as a starting point, risk assessments and AML/CFT programmes must be specific to each RE and their unique risks.

  • Compliance Officers: A Compliance Officer is a person responsible for administering and maintaining the AML/CFT programme. This Officer should have a sufficient understanding of their businesses’ ML/TF risks and obligations, as well as the required level of influence in the business to escalate issues and ensure governance level support for the programme.

  • Training and Vetting: All staff, Compliance Officers, senior managers and other employees with AML/CFT related duties must be effectively trained and vetted, to ensure ML/TF risks and red flags are understood, and the programme is implemented properly. Registers should be used to track training, and this training should be relevant to, and aligned with the RE’s own ML/TF risks and business processes.

  • CDD: While most RE’s have clear customer due diligence policies and procedures, some do not follow this strictly in practice, and are instead taking various shortcuts. Adhering to these policies, and completing Identity Verification Code of Practice (IVCOP) for individuals assessed at low-medium risk is vital.

The DIA encourages and welcomes feedback, and is currently developing a webinar to share additional insights from the Report.

We can help

In the meantime, if you would like help understanding what these key findings mean, and how you can integrate these good practices into your own AML/CFT programme, get in touch with our team of specialists today.