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Issue #12, August 2016

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1. Introduction/welcome

Winter has arrived, and with it the AML/CFT annual reporting period. Big thanks to those of you who are already gearing up to file your annual report, and of course to those who already have! Our team is available to assist you. If you encounter any problems, contact us for help (more details below).

Most of you will know that The New Zealand Financial Intelligence Unit &  Association of Certified Anti-Money Laundering Specialists AML/CFT Seminar is being held at Te Papa in Wellington on 14/15th September 2016. We’ll be there. It would be great to catch up with those of you we’ve met before, and put more names to the faces of those we haven’t. If you’re planning to go please don’t hesitate to approach us for a chat. You can find more information on the seminar here: AML/CFT Seminar (NZ Police website)

Natasha Weight
Manager Financial Integrity

2. Annual report due, portal now open

August 31 calendar reminder

If you are a reporting entity under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (Act), your annual report is due by 31 August 2016. The report is for the period 1 July 2015 to 30 June 2016 and has to be in a prescribed form with all required content. We will be sending out reminders leading up to the submission deadline.

There have been changes to some of the annual AML/CFT report questions to help make it easier for you to complete. These changes help to clarify what information you need to provide and reduce confusion for certain questions. To see those changes and to get answers to the most frequently asked questions about annual AML/CFT reports please go to our website (PDF, 992KB)

You can also link to the annual report submit page.

If you have any questions about the annual report, please email us at: amlcft@dia.govt.nz.

3. Interesting facts from the last annual report

As an AML/CFT Supervisor one of our functions is to monitor and assess the level of risk of money laundering and the financing of terrorism across all the reporting entities we supervise. One of the ways we achieve this is by analysing the data we receive each year in the Annual Reports.

The data we receive not only assists us with our annual work plan, but helps us increase our knowledge and understanding of our reporting entities. The data collected from the annual reports is currently being applied to our Entity Risk Model.

Here are some “Snapshots” from last year’s Annual Reports.

Eight out of 10 Reporting Entities submitted their Annual Report on time in 2015

Some 84 per cent of reporting entities submitted their annual reports on time last year. To those who did, thank you very much. If you miss the deadline you can expect a follow- up from us. Please ensure you submit your report on time.

One in 10 Reporting Entities have foreign PEPs

One in 10 reporting entities reported having a Politically Exposed Person (PEP) last year. Do you have any? A PEP includes foreign politicians, public servants, judges or their immediate families. A definition of Politically Exposed Persons is in the AML/CFT Act (Legislation website).

If you do have any PEPs, remember that requirements for enhanced due diligence apply.

Man in hat

Two-thirds of Reporting Entities have completed an internal review of their Risk Assessment and AML/CFT Programme

Nearly two-thirds of reporting entities told us they have completed an internal review of their risk assessment and AML/CFT programme in the two years leading up to the end of June 2015. This is great progress. Remember that a reporting entity must review its risk assessment and AML/CFT programme to ensure the risk assessment and AML/CFT programme remain current; and identify any deficiencies in the effectiveness of the risk assessment and the AML/CFT programme; and make any changes to the risk assessment or AML/CFT programme identified as being necessary from the internal review. If you have not completed an internal review of your risk assessment and AML/CFT programme you should make this a priority as compliance with this requirement is assessed by the Department during a programme review or on-site inspection.

When there are changes to a reporting entity’s business, such as a new type of customer, product or service, or method of delivery, the risk assessment must be revisited and any potential ML/FT risk identified and analysed. From there, a reporting entity’s AML/CFT programme must be reviewed and updated to reflect any additional or amended procedures, policies or controls that are being introduced or required.

Likewise, any deficiencies in the effectiveness of a risk assessment or AML/CFT programme must be identified and changed. This may be something that is picked up in an independent audit. Or it may be something triggered by account monitoring, for example, if a ML/FT risk is identified relating to a particular customer, or a type of customer and/or their transaction behaviour. It could also be something that is identified because there has been a change in ML/FT methods or trends, whether domestically or internationally.

The non-compliance we have encountered includes reporting entities:

  • that have not updated their risk assessment or AML/CFT programmes since the Act took effect, and for whom there was no evidence that it had ever been reviewed
  • with AML/CFT procedures in practice that were significantly different from those stated in their programme
  • that cannot tell us the version of their risk assessment and AML/CFT programme that applied at what point in time.

Good record-keeping practices and version control are the key to ensuring that a risk assessment and AML/CFT programme remain current and compliant.  Every time a risk assessment and AML/CFT programme are reviewed or updated, there should be a record kept, with the reasons for it and any changes clearly documented for future reference.

4. AML/CFT Compliance Officer

Compliance (this way sign)

The role of the AML/CFT compliance officer under section 56 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (Act) is an important one. The compliance officer not only has a legal duty to administer and maintain the AML/CFT programme but is also the interface between the Department and the reporting entity.

With this in mind, if any changes are made to the person appointed as your compliance officer, or if their contact details need to be updated, please tell us. Our contact email address for this is amlcft@dia.govt.nz.