The NEW ZEALAND ANTI-MONEY LAUNDERING AND COUNTERING FINANCING OF TERRORISM module informs any reporting entity required to establish and maintain a framework and program intended to detect and deter instances of money laundering and the financing of terrorism through or via their organisation.
A reporting entity can be a financial institution, a designated non-financial business or profession, a high value dealer, a casino, or any entity that is declared to be a reporting entity.
The NEW ZEALAND ANTI-MONEY LAUNDERING AND COUNTERING FINANCING OF TERRORISM module covers the obligations imposed on New Zealand organisations by the Anti-Money Laundering and Countering Finance of Terrorism Act 2009 (NZ) and the AML/CFT guidelines as well as implementation by reporting entities and regulation by authorised bodies.
The purposes of the act and guidelines are to;
- Detect and deter money laundering and the financing of terrorism;
- Maintain and enhance New Zealand’s international reputation by adopting, where appropriate in the New Zealand context, recommendations issued by the Financial Action Task Force; and
- Contribute to public confidence in the New Zealand financial system.
The module covers how organisations are obligated to co-ordinate with reporting entities, AML/CFT supervisors, and various government agencies such as law enforcement and regulatory bodies to achieve these purposes by ensuring compliance with the act and the guidelines.
The module covers the core obligations that organisations are required to comply with and practical guidance as to how organisations can achieve compliance. The core obligations are;
- Conducting customer due diligence; There are 3 types of customer due diligence – standard, simplified and enhanced. Customer due diligence is conducted both initially and on a continuing bases by way of account monitoring.
- Suspicious activity reports; The reporting entity must report information to the Commissioner of Police about suspicious transactions or activity.
- Prescribed transaction reports; Prescribed transactions must be reported to the Commissioner of Police via the New Zealand Financial Intelligence Unit. They are an important information source on the movement of funds across borders and the movement of physical cash within New Zealand.
- Record keeping; The organisation is to create and retain certain records for periods of time as directed by the AML/CFT supervisor and the Commissioner of Police.
- Risk assessment; The organisation must undertake a risk assessment in relation to money laundering and terrorism financing and apply it to risk ratings of resourcing and decision making.
- Cross-border transportation of cash; The organisation is required to report, in the prescribed form, any movements of physical currency equal to or above $10,000, into or out of New Zealand.
To comply with these core obligations an organisation is obligated to establish, implement and maintain an AML/CFT program. The module details how an organisation will comply with this obligation. The program must be implemented in accordance with the act and guidelines, particularly with regard to;
- Outlining the policies, procedures and controls in place to detect money laundering and financing of terrorism;
- Managing and mitigating the risk of the reporting entity facilitating money laundering and terrorism financing;
- Adequacy and effectiveness which is assessed by the AML/CFT supervisor against a stated criteria;
- Staff compliance and training;
- The documentation of day-to-day operations from a practical viewpoint;
- Effective controls to monitor compliance with the policies and procedures.
The consequences to an organisation found to have breached express anti-money laundering obligations, as covered in the module, can include;
- The issue of a formal warning;
- Acceptance of an enforceable undertaking, and an order in the court for breach of that undertaking;
- Seeking an injunction from the High Court for restraint or performance;
- Applying to the court for a pecuniary penalty;
- A term of imprisonment for an individual.
The NEW ZEALAND ANTI-MONEY LAUNDERING AND COUNTERING FINANCING OF TERRORISM module covers the obligations of organisations or reporting entities. The module does not focus on the obligations of individuals or employees of organisations or reporting entities.