Produced in conjunction with the Asia-Pacific Group on Money Laundering, this Mutual Evaluation Report analyses the effectiveness of New Zealand’s AML/CFT regime, as well as its technical compliance with FATF’s 40 recommendations. It was produced after FATF’s onsite visit from 26 February to 15 March 2020.

While it found NZ has implemented a system that is “effective in many respects” it set out several priority actions aimed at improving the availability of beneficial ownership information relating to legal persons and domestic trusts; strengthening supervision; and implementing targeted financial sanctions (TFS).

The last report in 2009 prompted substantial reform to New Zealand’s AML/CFT law, regulation, and enforcement system and we anticipate there will be more changes in store.

Key areas we anticipate change include:

• improving supervision by ensuring adequate resources are allocated to the AML/CFT supervisors (particularly the Reserve Bank of New Zealand);
• taking steps to refine laws and regulations to address current gaps and vulnerabilities and to sustain the recent increase in money laundering prosecutions.
• deepening designated non-financial business and profession’s (DNFBPs) understanding of risks and obligations, and requiring them to register with the Financial Intelligence Unit’s goAML platform to submit suspicious transaction and other reports;
• supervisors strengthening large financial institution’s understanding and controls in relation to customer due diligence on existing customers, politically exposed persons and sanction screening, as well as groupwide risk management;
• taking further steps to ensure competent authorities can have accurate and timely access to beneficial ownership information for legal persons and domestic trusts;
• strengthening the licensing and registration process of DNFBPs and financial institutions; and
• greater focus on ensuring compliance with TFS obligations through proportionate and dissuasive sanctions for non-compliance with AML/CFT requirements.

FATF’s executive summary of the 2021 FATF Mutual Evaluation Report on New Zealand contains the key findings, ratings and priorities.