New Zealand's measures to combat money laundering and terrorist financing

Publication details

Language

English

Country

New Zealand

Mutual Evaluation Report New Zealand-2021

Filename
Mutual-Evaluation-Report-New-Zealand-2021.pdf
Size
3 MB
Format
application/pdf
Download
  

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 (AML/CFT) system. The report is a comprehensive review of the effectiveness of New Zealand’s measures and their compliance with the FATF Recommendations. This includes an assessment of New Zealand’s actions to address the risks emanating from UN and domestically designated terrorists and terrorist organisations. The report does not address the justification that led to the domestic designation of an entity as a terrorist or terrorist group or organisation.

Paris, 29 April 2021 – New Zealand’s measures to combat money laundering and terrorist financing are delivering good results, but the country needs to focus more on improving the availability of beneficial ownership information, strengthening supervision and implementation of targeted financial sanctions.

New Zealand faces money laundering threats from proceeds of crime generated both domestically and internationally. The country’s large scale terrorist financing risks are mainly in relation to overseas-based groups. Using a comprehensive multi-tiered risk assessment process, the country has developed a robust understanding of these money laundering and terrorist financing risks. New Zealand has implemented an AML/CFT system that is effective in many respects.

This includes the effective use of financial intelligence and investigation tools to support money laundering investigations, prosecutions and criminal asset recovery, with a particularly strong focus on restraint and forfeiture of criminal assets. New Zealand is also particularly effective at cooperating with its international partners to combat money laundering and terrorist financing.

National AML/CFT policies and activities address New Zealand’s money laundering and terrorist financing risks to a substantial extent. However, measures to stop money laundering in the non-financial sector are new and businesses need to better understand and mitigate their risks. New Zealand’s three AML/CFT supervisors have a good understanding of the money laundering and terrorist financing risk profiles of their respective sectors, but there is scope to improve the use of effective, proportionate and dissuasive sanctions. Supervision of the banking sector in particular needs greater resourcing.
New Zealand has taken steps to mitigate the money laundering and terrorist financing risks associated with legal persons and arrangements, but those could be undermined by loopholes regarding beneficial ownership and nominee directors and shareholders.

New Zealand’s authorities remain alert to funds being used for domestic terrorist attacks following the Christchurch attack on March 2019. New Zealand’s investigations of terrorist financing have been thorough, quick, and well-coordinated. But there are gaps in New Zealand’s implementation of targeted financial sanction measures.

The FATF adopted this report at its February 2021 Plenary meeting.

Executive Summary-MER New Zealand 2021

APG

More information:  

The FATF Recommendations

FATF Methodology for assessing compliance with the FATF Recommendations and the effectiveness of AML/CFT systems

Consolidated table of assessment ratings - pdf format

Technical Compliance

Ratings which reflect the extent to which a country has implemented the technical requirements of the FATF Recommendations.

New Zealand Mutual Evaluation 2021

R.1 - Assessing risk & applying risk-based approach
LC
R.2 - National cooperation and coordination
C
R.3 - Money laundering offence
C
R.4 - Confiscation and provisional measures
C
R.5 - Terrorist financing offence
LC
R.6 - Targeted financial sanctions related to terrorism & terrorist financing
LC
R.7 - Targeted financial sanctions related to proliferation
PC
R.8 - Non-profit organisations
LC
R.9 - Financial institution secrecy laws
C
R.10 - Customer due diligence
LC
R.11 - Record keeping
LC
R.12 - Politically exposed persons
PC
R.13 - Correspondent banking
LC
R.14 - Money or value transfer services
PC
R.15 - New technologies
LC
R.16 - Wire transfers
PC
R.17 - Reliance on third parties
LC
R.18 - Internal controls and foreign branches and subsidiaries
PC
R.19 - Higher-risk countries
PC
R.20 - Reporting of suspicious transactions
C
R.21 - Tipping-off and confidentiality
C
R.22 - DNFBPs: Customer due diligence
PC
R.23 - DNFBPs: Other measures
PC
R.24 - Transparency and beneficial ownership of legal persons
PC
R.25 - Transparency and beneficial ownership of legal arrangements
PC
R.26 - Regulation and supervision of financial institutions
PC
R.27 - Powers of supervisors
LC
R.28 - Regulation and supervision of DNFBPs
PC
R.29 - Financial intelligence units
C
R.30 - Responsibilities of law enforcement and investigative authorities
C
R.31 - Powers of law enforcement and investigative authorities
LC
R.32 - Cash couriers
LC
R.33 - Statistics
LC
R.34 - Guidance and feedback
LC
R.35- Sanctions
LC
R.36 - International instruments
LC
R.37 - Mutual legal assistance
LC
R.38 - Mutual legal assistance: freezing and confiscation
LC
R.39 - Extradition
LC
R.40 - Other forms of international cooperation
LC

C = compliant   |   LC = largely compliant     |   PC = partially compliant   |   NC = non-compliant

Effectiveness

Ratings that reflect the extent to which a country's measures are effective. The assessment is conducted on the basis of 11 immediate outcomes, which represent key goals that an effective AML/CFT system should achieve.

Ratings that reflect the extent to which a country's measures are effective. The assessment is conducted on the basis of 11 immediate outcomes, which represent key goals that an effective AML/CFT system should achieve.

New Zealand Mutual Evaluation 2021

IO1
SE
IO2
HE
IO3
ME
IO4
ME
IO5
ME
IO6
SE
IO7
SE
IO8
HE
IO9
SE
IO10
ME
IO11
ME

HE = high level of effectiveness   |   SE = substantial level of effectiveness    |   ME = moderate level of effectiveness   |   LE = low level of effectiveness