March 2020

In this issue:

• New Zealand money remitter convicted for anti-money laundering failures  ​
• Regulatory Findings Report
• Understanding our regulatory approach 
• Customer Due Diligence webinar 
• Keeping New Zealand in Business for Good videos
• Guidance updates: Sector Risk Assessments 
• FATF high risk and other monitored jurisdiction update

New Zealand money remitter convicted for anti-money laundering failures  

Jiaxin Finance Limited, assisted by its owner, Qiang Fu and his mother, Fuqin Che, have been convicted of offences under the AML/CFT Act. This is the first time criminal action has been taken under the Act by any of the AML/CFT supervisors.

Between April 2015 and May 2016, Jiaxin Finance and its brokers were responsible for remitting over $53 million into New Zealand for an international customer.  

On 3rd March 2020 in the Auckland High Court, Jiaxin Finance has been sentenced to pay a fine of $2.55m, Mr Fu has been sentenced to pay a fine of $180,000, and Ms Che has been sentenced to pay a fine of $202,000.

Regulatory Findings Report

We’re pleased to provide a report on our regulatory findings for the 12 months ended 30 June 2019, a period of significant growth in our supervisory responsibilities. It’s intended to help the businesses we supervise understand our expectations, and how they can improve their systems and processes to comply with their AML/CFT obligations.

We will publish a webinar on our regulatory findings towards the end of March. To help us add value to the content of the report we welcome questions and feedback through this 5 minute survey.

Understanding our regulatory approach 

In response to feedback and suggestions from businesses we have developed this framework document that summarises the Departments approach to AML/CFT supervision. This one-page document outlines our purpose and provides an overview of our approach to education, engagement, monitoring and enforcement.

Customer Due Diligence (CDD) webinar 

Knowing your customer is a cornerstone of the AML/CFT Act as criminals seeking to launder money or finance terrorism will often try to avoid attracting attention by masking their identity and where their money has come from. We have created this webinar to help businesses understand their customer due diligence obligation, and what information must be collected.

Keeping New Zealand in Business for Good videos

We’ve published a series of videos to help businesses and their employees understand the AML/CFT Act and what is required to protect businesses, and New Zealanders, from the social and economic harm caused by money laundering and terrorism financing.

These AML/CFT videos can be shared with front line staff, other employees or anyone else that could use help understanding what they need to do and why it’s important.

Guidance updates: Sector Risk Assessments 

Two new Sector Risk Assessments (SRAS) were recently published which replace the previous Phase 1 and Phase 2 SRAs. As well as a change in names, there have been changes to the content. Businesses should consider whether they need to review and update their own risk assessments and AML/CFT programme.

FATF high risk and other monitored jurisdiction update

The Financial Action Task Force (FATF), of which New Zealand is part of, updated its list of ‘high risk and other monitored jurisdictions’ on 21 February 2020. The additional countries on the FATF list are Albania, Barbados, Jamaica, Mauritius, Myanmar, Nicaragua and Uganda. Trinidad and Tobago have come off the list so are no longer subject to FATF’s ongoing monitoring process.

The Democratic People’s Republic of Korea and Iran remain on the FATF list of High Risk jurisdictions and are subject to a Call for Action.

This is a timely reminder that businesses are required to conduct an enhanced level of customer due diligence on all non-resident customers from countries that have insufficient AML/CFT systems or measures in place. There are additional requirements to monitor and examine business relationship and transactions involving these countries, and where necessary, have additional measures or restrictions on dealing with them.

Further information relating to the requirements of the AML/CFT Act in relation to country risk is in the AML/CFT supervisors’ Countries Assessment Guideline.

We encourage everyone to refer to our website dia.govt.nz/amlcft regularly for updates on our guidance, information and advice.

The team are ready to assist either by phone - 0800 25 78 87 or email AMLCFT@dia.govt.nz.