New Zealand – Know Your Customer (KYC) Rules

 

 

New Zealand is not a major regional or offshore financial center. Money laundering cases are infrequent in New Zealand. However, authorities note that it is difficult to estimate the extent of money laundering activities, since every serious crime that generates proceeds could lead to a money laundering offense.

Money laundering generally occurs through the financial system, but the purchase of real estate and other high value assets as well as the use of foreign exchange dealers have become increasingly popular methods of laundering money. Narcotics proceeds (mostly from methamphetamine and cannabis sales) and fraud-associated activity (primarily Internet-banking fraud) are the primary sources of illicit funds. International organized criminal elements, mostly from Asia, are known to operate in New Zealand, but not to a wide extent. New Zealand is a low threat environment for terrorist finance.

New Zealand has a small number of casinos, which operate gaming machines and a variety of table games.

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KNOW-YOUR-CUSTOMER (KYC) RULES:

 

Enhanced due diligence procedures for PEPs:

 

PEP is an abbreviation for Politically Exposed Person, a term that describes a person who has been entrusted with a prominent public function, or an individual who is closely related to such a person. The terms PEP, Politically Exposed Person and Senior Foreign Political Figure are often used interchangeably

    • Foreign PEP: YES
    • Domestic PEP: YES

New Zealand – KYC covered entities

 

The following is a list of Know Your Customer entities covered by New Zealand Law:

    • Banks exchange offices, and money service businesses
    • Credit card companies
    • Mortgage lenders
    • Casinos
    • Securities brokers/dealers
    • Safekeeping providers
    • Asset and individual or collective portfolio managers
    • Life insurance or other investment related insurance

New Zealand – Suspicious Transaction Reporting (STR) Requirements:

 

Number of STRs received and time frame: 4,357 in 2010

Number of CTRs received and time frame: Not available

The following is a list of STR covered entities covered by New Zealand Law:

    • Banks exchange offices, and money service businesses
    • Credit card companies
    • Mortgage lenders
    • Casinos
    • Securities brokers/dealers
    • Safekeeping providers
    • Asset and individual or collective portfolio managers
    • Life insurance or other investment related insurance

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

 

Prosecutions: 156 in 2009
Convictions: 55 in 2009

 

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of New Zealand (GONZ) is actively taking measures to comply with international standards and strengthening its ability to detect and deter money laundering and terrorist financing. New Zealand‘s Anti-Money Laundering/Counter-Terrorist Financing Act of 2009 sets reporting requirements for financial service providers and casinos and establishes a risk-based approach to tracking potential money laundering and terrorism financing activities. However, while the Act is in force, the Ministry of Justice is still finalizing regulations, and enforcement will not begin until 2013, in part to give covered entities more time to accommodate the changes. The New Zealand FIU anticipates an increase in reporting in 2014, and has hired additional personnel to manage the workload.

The GONZ is considering proposed amendments to the Companies Act, which will address the vulnerabilities created by foreign-owned shell companies.

New Zealand and the United States do not require a bilateral mutual legal assistance treaty (MLAT) to enter into a mutual assistance relationship. The United States has been designated as a ―prescribed foreign country‖ in New Zealand‘s Mutual Assistance in Criminal Matters Act 1992, enabling New Zealand to process requests for assistance from the United States on a reciprocal basis. In practice, New Zealand and U.S. authorities have a good record of cooperation and information sharing in this area. New Zealand regularly cooperates in international money laundering and terrorist financing initiatives and investigations.