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New Zealand Mutual Evaluation Ratings Slide 1 New Zealand Mutual Evaluation Ratings Slide 2 New Zealand Mutual Evaluation Ratings Slide 3 New Zealand Mutual Evaluation Ratings Slide 4 New Zealand Mutual Evaluation Ratings Slide 5 New Zealand Mutual Evaluation Ratings Slide 6 New Zealand Mutual Evaluation Ratings Slide 7 New Zealand Mutual Evaluation Ratings Slide 8 New Zealand Mutual Evaluation Ratings Slide 9 New Zealand Mutual Evaluation Ratings Slide 10 New Zealand Mutual Evaluation Ratings Slide 11 New Zealand Mutual Evaluation Ratings Slide 12 New Zealand Mutual Evaluation Ratings Slide 13 New Zealand Mutual Evaluation Ratings Slide 14 New Zealand Mutual Evaluation Ratings Slide 15 New Zealand Mutual Evaluation Ratings Slide 16 New Zealand Mutual Evaluation Ratings Slide 17 New Zealand Mutual Evaluation Ratings Slide 18 New Zealand Mutual Evaluation Ratings Slide 19
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New Zealand Mutual Evaluation Ratings

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Ratings of Mutual Evaluation Report of New Zealand - 2021

New Zealand Mutual Evaluation Ratings

  1. 1. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 1 Anti-money laundering and counter- terrorist financing (AML/CFT) measures in New Zealand Fourth Round Mutual Evaluation Key findings, ratings and priority actions April 2021 http://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-new-zealand-2021.html
  2. 2. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 Ratings – Effectiveness (1/3) 2 Immediate outcome of an effective system to combat money laundering (ML) and terrorist financing (TF) Extent to which New Zealand has achieved this objective 1. ML and TF risks are understood and, where appropriate, actions co-ordinated domestically to combat ML and TF Substantial 2. International co-operation delivers appropriate information, financial intelligence, and evidence, and facilitates action against criminals and their assets High 3. Supervisors appropriately supervise, monitor and regulate financial institutions and designated non-financial businesses and professions (DNFBPs) for compliance with AML/CFT requirements commensurate with their risks. Moderate 4. Financial institutions and DNFBPs adequately apply AML/CFT preventive measures commensurate with their risks, and report suspicious transactions. Moderate
  3. 3. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 3 Immediate outcome of an effective system to combat money laundering (ML) and terrorist financing (TF) Extent to which New Zealand has achieved this objective 5. Legal persons and arrangements are prevented from misuse for money laundering or terrorist financing, and information on their beneficial ownership is available to competent authorities without impediments Moderate 6. Financial intelligence and all other relevant information are appropriately used by competent authorities for money laundering and terrorist financing investigations. Substantial 7. Money laundering offences and activities are investigated and offenders are prosecuted and subject to effective, proportionate and dissuasive sanctions Substantial 8. Proceeds and instrumentalities of crime are confiscated. High Ratings – Effectiveness (2/3)
  4. 4. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 4 Immediate outcome of an effective system to combat money laundering (ML) and terrorist financing (TF) Extent to which New Zealand has achieved this objective 9. Terrorist financing offences and activities are investigated and persons who finance terrorism are prosecuted and subject to effective, proportionate and dissuasive sanctions. Substantial 10. Terrorists, terrorist organisations and terrorist financiers are prevented from raising, moving and using funds, and from abusing the non-profit sector. Moderate 11. Persons and entities involved in the proliferation of weapons of mass destruction are prevented from raising, moving and using funds, consistent with the relevant United Nations Security Council Resolutions. Moderate Ratings – Effectiveness (3/3)
  5. 5. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 5 Ratings – Effectiveness April 2021 2 4 5 0 High Substantial Moderate Low
  6. 6. 27-Apr-21 6 Ratings – technical compliance (1/5) AML/CFT POLICIES AND COORDINATION 1. Assessing risks & applying a risk-based approach LargLarLarLar Largely compliant 2. National cooperation and coordination ComCo Co Co Compliant MONEY LAUNDERING AND CONFISCATION 3. Money laundering offence ComCo Co Co Compliant 4. Confiscation and provisional measures ComCo Co Co Compliant TERRORIST FINANCING AND FINANCING OF PROLIFERATION 5. Terrorist financing offence LargLarLarLar Largely Compliant 6. Targeted financial sanctions related to terrorism & terrorist financing LargLarLarLar Largely Compliant 7. Targeted financial sanctions related to proliferation PartiParParPar Partially compliant 8. Non-profit organisations LargLarLarLar Largely compliant
  7. 7. 27-Apr-21 7 Ratings – technical compliance (2/5) PREVENTIVE MEASURES 9. Financial institution secrecy laws ComCo Co Co Compliant Customer due diligence and record keeping 10. Customer due diligence LargLarLarLar Largely compliant 11. Record keeping LargLarLarLar Largely compliant Additional measures for specific customers and activities 12. Politically exposed persons Part ParParPar Partially compliant 13. Correspondent banking LargLarLarLar Largely compliant 14. Money or value transfer services Part ParParPar Partially compliant 15. New technologies LargLarLarLar Largely compliant 16. Wire transfers Part ParParPar Partially compliant
  8. 8. 27-Apr-21 8 Ratings – technical compliance (3/5) PREVENTIVE MEASURES (continued) Reliance, Controls and Financial Groups 17. Reliance on third parties LargLarLarLar Largely compliant 18. Internal controls and foreign branches and subsidiaries Part ParParPar Partially compliant 19. Higher-risk countries Part ParParPar Partially compliant Reporting of suspicious transactions 20. Reporting of suspicious transactions ComCo Co Co Compliant 21. Tipping-off and confidentiality ComCo Co Co Compliant Designated non-financial Businesses and Professions (DNFBPs) 22. DNFBPs: Customer due diligence Part ParParPar Partially compliant 23. DNFBPs: Other measures Part ParParPar Partially compliant
  9. 9. 27-Apr-21 9 Ratings – technical compliance (4/5) TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL PERSONS AND ARRANGEMENTS 24. Transparency and beneficial ownership of legal persons Part ParParPar Partially compliant 25. Transparency and beneficial ownership of legal arrangements Part ParParPar Partially compliant POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES AND OTHER INSTITUTIONAL MEASURES Regulation and Supervision 26. Regulation and supervision of financial institutions Part ParParPar Partially compliant 27. Powers of supervisors LargLarLarLar Largely compliant 28. Regulation and supervision of DNFBPs Part ParParPar Partially compliant Operational and Law Enforcement 29. Financial intelligence units ComCo Co Co Compliant 30. Responsibilities of law enforcement and investigative authorities ComCo Co Co Compliant 31. Powers of law enforcement and investigative authorities LargLarLarLar Largely compliant 32. Cash couriers LargLarLarLar Largely compliant
  10. 10. 27-Apr-21 10 Ratings – technical compliance (5/5) POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES AND OTHER INSTITUTIONAL MEASURES (continued) General Requirements 33. Statistics LargLarLarLar Largely compliant 34. Guidance and feedback LargLarLarLar Largely compliant Sanctions 35. Sanctions LargLarLarLar Largely compliant INTERNATIONAL COOPERATION 36. International instruments LargLarLarLar Largely compliant 37. Mutual legal assistance LargLarLarLar Largely compliant 38. Mutual legal assistance: freezing and confiscation LargLarLarLar Largely compliant 39. Extradition LargLarLarLar Largely compliant 40. Other forms of international cooperation LargLarLarLar Largely compliant
  11. 11. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 11 Ratings – technical compliance 1 April 202 8 20 12 0 Compliant Largely compliant Partially compliant Non compliant
  12. 12. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 Key findings  New Zealand has a robust understanding of its money laundering and terrorist financing (ML/TF) risks. It has established a comprehensive multi-tiered risk assessment process, with its national risk assessment (NRA) undergoing two full cycles. National AML/CFT policies and activities address identified ML/TF risks to a substantial extent. Authorities have taken action to respond to emerging TF risks in the context of a lower overall risk profile. Domestic co-ordination and co- operation are strengths of New Zealand’s AML/CFT system.  New Zealand’s law enforcement agencies (LEAs) regularly use financial intelligence. The New Zealand Police Financial Intelligence Unit (FIU) produces and disseminates a wide range of financial intelligence products, which generally support the operational needs of competent authorities. However, New Zealand authorities could benefit from better exploiting the potential of financial intelligence to detect criminal activity by persons not already known to law enforcement. 12 1 April 202
  13. 13. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 Key findings  New Zealand identifies and pursues parallel money laundering investigations alongside investigations of significant proceeds- generating. Its authorities are adequately skilled and trained to conduct financial investigations with a wide range of investigative tools are available to them. Financial investigations are increasingly being used to support prosecution on money laundering charges and the number of prosecutions into ML have increased since 2018.  New Zealand Police has a strong focus on confiscation of proceeds of crime, backed by a top-level target for the volume of criminal assets to be restrained (NZD 500 million by 2021). The skilled Asset Recovery Unit (ARU) works in co-operation with investigative authorities to initiate parallel restraint and forfeiture proceedings in response to identified crime and financial intelligence. New Zealand has pursued international asset recovery cases that involve significant volumes of inbound and outbound proceeds. April 2021 13
  14. 14. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 Key findings  There is sound co-operation and co-ordination between New Zealand Police’s National Security Group (NSG), Financial Crime Group (FCG) (including the NZPFIU) and other relevant agencies on monitoring possible Terrorist Financing. Following the 2019 Christchurch attacks, New Zealand demonstrated its capacity and effectiveness in undertaking and supporting terrorism financing investigations. New Zealand has not prosecuted any terrorism financing cases, which is consistent with its generally low TF risk profile.  There is a strong legislative framework for the implementation of targeted financial sanctions (TFS) without delay. However, reporting entities have a variable understanding of TFS, due to limited guidance and outreach by relevant authorities, as well as the lack of a mandate for supervisors to undertake supervision of TFS implementation. No assets have been frozen in New Zealand pursuant to TFS regimes. While this may be consistent with New Zealand’s risk profile, it could also reflect the limited TFS guidance, and the lack of outreach and supervision on TFS. New Zealand authorities have prosecuted a contravention of export restrictions under UNSC DPRK sanctions. 14 1 April 202
  15. 15. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 Key findings 15 1 April 202  New Zealand covers financial institutions (FIs), designated non-financial businesses and professions (DNFBPs) and most virtual asset service providers (VASPs) as reporting entities under the Anti-Money Laundering and Countering the Financing of Terrorism Act 2009 (AML/CFT Act). There remain some gaps in the AML/CFT Act, which impact New Zealand’s overall effectiveness. Reporting entities’ understanding and implementation of their AML/CFT obligations is mixed, with a better understanding and implementation in larger and more sophisticated reporting entities.  New Zealand’s three AML/CFT supervisors have a good understanding of the inherent ML/TF risk profiles of their respective sectors. The scope and depth of supervision for each financial sector are broadly commensurate with their respective risk levels, except for the banking sector, where the scope and depth of inspections does not adequately reflect the risk and complexity of the banks inspected. There is scope to improve the range of sanction powers available to the supervisors and for the supervisors to impose sanctions that are more effective, proportionate and dissuasive.
  16. 16. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 Key findings 16 April 2021  Most DNFBPs were only brought within the scope of AML/CFT regulation in 2018 as part of New Zealand’s ‘Phase 2’. The newly supervised Phase 2 reporting entities and VASPs are still developing their understanding of their ML/TF risks and how AML/CFT obligations apply to their business. The level of suspicious transaction report (STR) and suspicious activity report (SAR) reporting by some DNFBPs remains low. AML/CFT supervision for Phase 2 sectors is at an early stage but the rollout of new obligations has been conducted in an effective and well-managed way so far.  New Zealand’s legal system provides for a wide range of legal persons and arrangements, and authorities have a comprehensive understanding of the ML/TF risks associated with them. In recent years, New Zealand has implemented measures to mitigate the ML/TF risks of misuse of legal persons and arrangements, including the creation of a register of New Zealand Foreign Trusts, and residency requirements for company directors. However substantial gaps remain in relation to ensuring the availability of adequate, accurate and current beneficial ownership information, and in relation to nominee directors and shareholders.
  17. 17. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 Key findings 17 April 2021  Authorities actively respond to formal and informal international co-operation requests. New Zealand has a sound legal basis to provide and seek MLA and extradition. Several different competent authorities are involved in handling extradition requests and there is no clear authority with primary responsibility. New Zealand has received positive feedback from counterparts concerning the quality and timeliness of assistance provided. LEAs and supervisors also engage in various forms of international co-operation with counterparts.
  18. 18. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 Priority Actions for New Zealand to strengthen its AML/CFT System  Improve the availability of accurate and up-to-date beneficial ownership information on legal persons, particularly limited liability companies and partnerships, and domestic trusts, and take steps to mitigate the ML/TF risks of nominee shareholders and directors.  Ensure that supervisors have a sufficient range of proportionate and dissuasive sanctions available, and that RBNZ has adequate resources to apply the appropriate scope and depth of supervision to banks.  Give clear powers and mandates to appropriate agencies to supervise and enforce TFS obligations, supported by outreach to reporting entities, a point of contact for TFS-related queries, and enhanced dissemination of updates to sanctions lists.  Consolidate implementation of Phase 2 of the AML/CFT Act, including by further developing DNFBPs’ understanding of their risks and obligations; ensuring that they are registered with the FIU reporting system and submit reports; and progressing towards a mature supervision regime for these sectors. 18 April 2021
  19. 19. Anti-money laundering and counter-terrorist financing measures in New Zealand - Mutual Evaluation Report – April 2021 Priority Actions for New Zealand to strengthen its AML/CFT System  Improve the FIU’s tools for prioritisation, database integration and analysis of financial intelligence to enhance its ability to directly identify new targets and trends. Conduct outreach to enable LEAs to make more use of FIU proactive financial intelligence products to launch investigations into new targets.  Update New Zealand’s laws and regulations to address gaps and vulnerabilities including: shortcomings relating to licensing and registration of FIs and DNFBPs; gaps in preventive measures (particularly for MVTS); and the authorisation of essential human needs for sanctioned individuals.  Take steps to sustain the recent increase in money laundering prosecutions, by monitoring trends and outcomes through better data and statistics and considering development of ML prosecution guidelines. 19 April 2021
  • AnnaAbramovic1

    Jul. 14, 2021

Ratings of Mutual Evaluation Report of New Zealand - 2021

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