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MEDIA RELEASE

PO Box 10123
The Terrace
Wellington, 6143
New Zealand

Transparency International New Zealand
30 October 2019
Patron, Lyn Provost

Crackdown on Money Laundering Applauded

Transparency International New Zealand (TINZ) congratulates the Department of Internal Affairs (DIA) for demonstrating that money-laundering is unacceptable.

Jin Yuan Finance Limited, a Money Transfer Company, was ordered  to pay a penalty of over $4 million in a recent High Court judgment. According to the DIA the company, Jin Yuan,  was prosecuted  for repeated non-compliance with Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation.

The DIA accused the company of failing to conduct due diligence, monitor accounts and transactions, and comply with the requirement to report suspicious transactions. Jin Yuan Finance Ltd also claimed it dealt through only one bank account when there were multiple secret accounts. According to DIA there were 55,097 transactions through its accounts with a total of $278.5 million of business. It also failed to action a remediation plan that the DIA had put in place.

The prosecution is a result of increased effort on the part of DIA to monitor and prosecute violators of anti-money laundering laws since the strengthening of the AML/CFT regime in 2017.

It is essential to New Zealand’s reputation and wellbeing that serious effort is made to prevent money laundering activities within our financial, corporate and trust systems. TINZ is encouraged about the increased spotlight on AML/CFT compliance in New Zealand and internationally. It is reassuring to see that the DIA has strengthened its AML supervisory team, demonstrating a commitment to being effective.

TINZ is extremely concerned about how much more work remains to be done to improve registration of beneficial ownership.

Suzanne Snively, TINZ Chair observes, “We had high hopes that the Coalition Government would lead an initiative for New Zealand to be the first country in the world to have a central public register of beneficial ownership. This central register would have reduced duplication, enabled deeper scrutiny of the data provided by beneficial owners and would have enhanced the ease of doing business.

“Instead, New Zealand has moved further behind other countries. It’s time for the Ministers of Justice, Commerce and Police to push harder to bring  New Zealand  in line with the United Kingdom and Europe Union countries who are implementing beneficial ownership registers for companies and trusts.”

Even with a robust register of beneficial ownership, diligence is still required to enforce anti-money laundering laws. A recent report  by Transparency International UK highlights that dirty money has spread throughout the UK economy. Corrupt individuals have found innovative ways of laundering the proceeds of corruption, reaching as far as private schools and interior designers. (See report and this article.) A recent report claims that a complete lack of surveillance within UK’s Companies House registration and monitoring procedures is undermining their attempts to track beneficial owners. (See this article.)

As the world continues to become more connected and moving money increasingly sophisticated, we must add resources and tools to thwart the movement of corrupt funds.

 


Background information for journalists

  1. Media Contacts

    Suzanne Snively

    Chair

    Transparency International New Zealand

    +64 21 925 689

    suzanne.snively@tinz.org.nz

  2. About Transparency International

    Transparency International is a global civil society coalition based in Berlin, leading the fight against corruption. It compiles a number of measures of different aspects of corruption including the Corruption Perceptions Index, the Global Corruption Barometer, and the Bribe Payers Index. Information on Transparency International can be found at www.transparency.org.

  3. About the New Zealand chapter of Transparency International

    The local chapter of Transparency International works to actively promote the highest levels of transparency, accountability, integrity and public participation in government and civil society in New Zealand and the Pacific Islands. Find TINZ at www.transparency.org.nz.

    Transparency International New Zealand has several projects designed to support greater integrity.  These can be viewed in our Annual Report, and include:

    • National Integrity System Assessment, a risk assessment of the pillars of democracy
    • Development of a Financial Integrity Systems Assessment Tool, for use with the financial sector;
    • Leaders Integrity forums for senior public leaders
    • Submissions and advocacy
    • Thought leadership through communications and events.

    Chief Executive Officer

    Julie Haggie

    Transparency International New Zealand

    +64 27 498 9126

    Julie.haggie@tinz.org.nz

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