Date posted: 21/04/2021

NZ AML regulatory findings - the importance of the risk-based approach

The DIA in NZ has released its second AML Regulatory Findings report and IFAC and ICAEW have released three more guides to help accountants navigate AML risks

In brief

  • The DIA has released its second Regulatory Findings Report on AML/CFT Act 2009 compliance.
  • The report highlights the importance of a tailored risk assessment.
  • Three new guides have been released by IFAC and ICAEW to help accountants enhance their understanding of money laundering.

Regulatory Findings Report

The Regulatory Findings Report (the Report) provides an insight into the Department of Internal Affairs' (DIA) findings around Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT) compliance for the 12 months ended 30 June 2020.

Similar to the previous iteration, desk-based reviews and onsite inspections provided the basis for the findings presented in the Report. In carrying out these processes, the DIA has found that in total, over one-third of all the assessments required no further action by the reporting entity. However, that two-thirds of all the assessments identified non-compliance that required some form of remediation.

As such, the DIA considers that improvements can be made in the following areas:

  • More consistent implementation of AML/CFT programmes
  • The use of tailored documentation (ie. not generic templates)
  • Registration with goAML, which is the central repository of reports (by reporting entities) of suspicious activities and transactions used by the Financial Intelligence Unit
  • Deeper understanding of money laundering risks and sources of wealth

In its Report, the DIA highlighted the importance of a risk assessment that is tailored to the particular organisation at hand. That is, compliance is driven inherently by a strong business understanding of possible money laundering and terrorism financing risks and vulnerabilities arising in that organisation's specific environment.

AML Regulatory Findings Report year ended 30 June 2020

To read the Report and find out more, click on the below

Read more

International guides

'Anti-Money Laundering: The Basics' is a series of guides designed to help accountants enhance their understanding of how money laundering works, the risks they face, and what they can do to mitigate these risks and make a positive contribution in the public interest.

The series has been developed and released jointly by the International Federation of Accountants (IFAC) and the Institute of Chartered Accountants in England and Wales (ICAEW). The first three in the series provided a basic overview of money laundering, the risk-based approach and the risks arising in company formation activities.

Installment Four provides an overview of the use of asset transfers and how money launders seek to integrate criminal proceeds into the legitimate economy.

Installment Five covers the ways in which tax services may be vulnerable to money laundering.

Installment Six illustrates the risks that are present with respect to businesses in difficulty – as these types of businesses are particularly vulnerable to falling victim to financial crime.

To access the guides, please click on the below link.

Anti-Money Laundering: The Basics

To access the entire series, click on the below

Read more

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