The Financial Action Task Force (FATF) has told New Zealand told to strengthen its anti-money laundering (AML) and counter terrorism financing (CTF) operations in several areas, including improving the availability of its beneficial ownership information.
In the latest Mutual Evaluation report for the country, FATF said New Zealand’s measures are addressing AML/CTF risk to a “substantial extent” but improvements do need to be made.
FATF said: “New Zealand’s measures to combat money laundering and terrorist financing are delivering good results, but the country needs to focus more on improving the availability of beneficial ownership information, strengthening supervision and implementation of targeted financial sanctions.”
It said that New Zealand has taken steps to “mitigate the money laundering and terrorist financing risks associated with legal persons and arrangements”, but these could be undermined by “loopholes” regarding beneficial ownership and nominee directors and shareholders.
FATF said that nominees can provide resident director or trustee services for oversees customers but there are currently “insufficient measures to mitigate the risks posed by these directors and shareholders”. It recommended that measures are implemented to address this, such as requiring nominees to disclose their status and the identity of their nominator be nominated.
It said: “There are insufficient mechanisms for authorities to obtain adequate, accurate and current beneficial ownership information. The absence of a trust register also limits the availability of basic and beneficial ownership information on trusts.”
FATF said however that New Zealand has “developed a robust understanding of these money laundering and terrorist financing risks.”
It said: “New Zealand has implemented an AML/CFT system that is effective in many respects.
“This includes the effective use of financial intelligence and investigation tools to support money laundering investigations, prosecutions and criminal asset recovery, with a particularly strong focus on restraint and forfeiture of criminal assets. New Zealand is also particularly effective at cooperating with its international partners to combat money laundering and terrorist financing.”
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