Welcome to Compliance News
December 2021

In this edition we will give you an overview of the year that has been.

In this issue:

• A message from our director Paul Graham
• Our engagement with reporting entities
• 2021 AML/CFT Annual Survey
• Our compliance assessments
• Assessments Undertaken
• What you may have missed

A message from our director Paul Graham 

Kia ora and welcome to the last issue of Compliance News for 2021.

Living through the second year of COVID-19 has for many of us been more difficult than the first. Our resilience continues to be tested, yet we continue to thrive as we evolve to this ‘new normal’ and adapt to an even more complex and dynamic environment.

As we head toward the end of the year, I’ve been looking back since commencing in the Acting Director role and 2021 has been a fantastic year for the Department’s AML/CFT function. Together we've delivered important māhi that helps achieve our goal of reducing harm by minimising money laundering in New Zealand.

DIA’s AML Group will continue to connect, partner and collaborate with sector partners, stakeholders and with businesses to ensure appropriate measures are in place to guard against money laundering and terrorism financing.

I would like to thank you all for your support and take this opportunity to wish all the AML/CFT network a safe and refreshing break over Christmas and a successful New Year in 2022.

Kia hari, kia koa i te wā whakatā! Happy holidays!

Paul Graham, Director (Acting) AML Group, Regulatory Services

Our engagement with reporting entities

Education and engagement are key parts of our work to help reporting entities understand and implement effective practices to counter money laundering and terrorism financing. Our approach to regulation recognises that reporting entities are important partners in the AML/CFT system and we continually seek to support and build your capability and effectiveness.

Over the 12-month period ending 30 June 2021, our regulators and engagement team had a total of 8,312 interactions with our reporting entities. These interactions fell under one of 15 categories (shown below), all with the purpose of supporting our reporting entities to comply with, or understand, their obligations under the AML/CFT Act.

2021 AML/CFT Annual Survey

We also undertook the 2021 AML/CFT Annual Survey. This was a great opportunity to understand the effectiveness of our engagement approach, what was working well for you and where we can add more value.

We appreciate everyone who participated and provided feedback and suggestions. The results of this survey have helped inform our engagement approach for the year ahead and we look forward to the engagement and education approach we can bring to you in 2022

Our compliance assessments

Over the 12 months to 30 June 2021, most of our compliance assessments were completed on medium-high to high risk (as stated in the sector risk assessments) reporting entities. Of the 295 assessments completed in this period, 270 were completed on reporting entities within these two risk profiles. Most of these compliance assessments were undertaken on accountants, law firms and real estate agents, reflecting that these are the largest sectors that we supervise.

Assessments Undertaken

We completed 227 desk-based reviews and 68 on-site inspections. Over two-thirds of all assessments focused on newer sectors in the AML/CFT system – Accounting, Legal and Real Estate.

Desk-based reviews accounted for nearly 77% of our assessments, with over one-third of all these assessments being on law firms.

On-site inspections predominantly focused on reporting entities in the legal, real estate, accounting and remittance sectors.

What you may have missed

• The Department and FMA recently released a joint reminder regarding the outsourcing of Customer Due Diligence.

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