All reporting entities supervised by the Financial Markets Authority (FMA) must regularly carry out an individual risk assessment of their business under section 58 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act).
The latest FMA Sector Risk Assessment report is important because it helps reporting entities understand the most up-to-date risks of money laundering and terrorism financing and how they apply to each of the sectors supervised by the FMA. The last report was published in 2017 so there are a few changes to note.
The FMA has expectations that their reporting entities will familiarise themselves with the updated sector risks and then review their own risk assessments accordingly (including updating documentation and training staff on any new risks and findings).
The FMA looks after reporting entities in ten sectors under the AML/CFT Act. Each has its own overall risk rating, which is an assessment of the inherent money laundering and terrorist financing risk in that sector, these ratings range from Low, to Medium-Low, to Medium-High, to High.
Looking at the risk ratings for the ten sectors, there have been no changes from the 2017 report but there is plenty of helpful information including updated red flags.
It’s interesting to note that the FMA has now included Virtual Asset Service Providers (VASPs) in this report. These are entities dealing in cryptocurrency and while there aren’t many in New Zealand at the moment, it’s a growing market and one to watch.
While this report is aimed at the ten sectors that the FMA supervise, there is value in other sectors having a look through the document as many of the risks certainly are cross-sector.
We’ve included a link to the report below and as always get in touch if you have any questions – we’re here to help.