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MEDIA RELEASE

PO Box 10123
The Terrace
Wellington, 6143
New Zealand

Transparency International New Zealand
18 March 2018
Patron, Sir Don McKinnon

Report on Money Laundering and Financing Terrorism warns against complacency

In its updated assessment the New Zealand Police Financial Intelligence Unit (FIU) said $1.35 billion of domestic criminal proceeds is generated for laundering in New Zealand each year.

This week the FIU released the National Risk Assessment an updated assessment of the money laundering and terrorism financing risks that the country faces.

FIU Manager Andrew Hill says “Even in a comparably safe country like ours, money laundering and terrorism financing harms communities by enabling organised crime to flourish.”

“Overseas criminals seeking to mask their illicit funds are also attracted by New Zealand’s reputation as a safe and non-corrupt country.”

This report describes the vulnerabilities of the  New Zealand  financial system to money laundering and terrorism financing and provides an awareness to more successfully prevent and detect illicit financial activity.

The channels that currently offer opportunities to money launderers in New Zealand are those financial, legal, accounting, real estate, and retail or dealer services that

  • offer anonymity to the offenders,
  • are available for moving large values and volumes of legitimate funds and which provide a screen for illicit transactions,
  • are widely available internationally and also have poor AML/CFT controls internationally, and /or
  • are cash intensive, which are particularly used to disguise drugs proceeds.

“The Police FIU report also highlights the high potential economic and reputational cost associated with money laundering and financing of terrorism,” adds Hill.

“This report is further supports the  need for complete transparency of ownership of  New Zealand companies and trusts,” Says Suzanne Snively, Chair of Transparency International New Zealand. “We know of  trusts set up In New Zealand used as instruments of crime for corrupt people and regimes overseas. This may well include terrorists; New Zealand should not consider itself immune from being used by organisations like ISAL. Opacity of ownership under current law encourages these activities and obscures our ability to prevent them.”

While the new requirement under the anti money laundering and counter terrorism act to be implemented in July will further assist the prevention of money laundering for terrorist and other criminal  purposes financial transactions are not the only identifier of criminal intent. The Government  needs to pass with urgency the bill that will identify beneficial ownership of trusts followed quickly with an amendment to cover all legal entities used by overseas sources and with the register fully transparent.

Background information for journalists

  1. Media Contact

    Suzanne Snively
    Chair
    Transparency International New Zealandv +64 21 925 689
    suzanne.snively@tinz.org.nz
    Transparency International

  2. Transparency International

    Transparency International is a global civil society coalition 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 TINZ

    Transparency International New Zealand (TINZ) is the local chapter of the global organisation – http://www.transparency.org.nz/. TINZ 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.

    Transparency International New Zealand provides a free Anti-Corruption Training Tool (transparency.org.nz/Anti-Corruption-Training) designed by leading experts in the field, and enables organisations to provide training for their personnel. This was developed in partnership with the Serious Fraud Office and BusinessNZ

    Transparency International New Zealand published the Integrity Plus 2013 New Zealand National Integrity System Assessment and is actively engaged in the implementation of its recommendations.

  4. About the Report

    The New Zealand Police Financial Intelligence Unit (the FIU) published an updated assessment of the money laundering and terrorism financing risks that the country faces, called the National Risk Assessment.

    The National Risk Assessment full report can be found here; follow this link to the FIU media release.

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