New Zealand Law Society - FMA warns 12 entities for anti-money laundering breaches

FMA warns 12 entities for anti-money laundering breaches

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The Financial Markets Authority (FMA) has issued formal warnings to 12 entities, which it found were non-compliant with section 80 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.

The Act currently covers financial institutions and casinos, but its definition of ‘reporting entities’ will soon be expanded to also include lawyers, accountants, real estate agents and others.

The FMA is one of three supervisors under the Act, along with the Reserve Bank of New Zealand and the Department of Internal Affairs. The FMA supervises around 800 reporting entities under the Act, most of which are financial advisers.  Each of these entities has to complete an audit of its Anti-Money Laundering and Countering of Financing (AML/CFT) programme every two years, or on request. They must also complete an annual AML/CFT report.

The FMA asked 77 entities to submit the audits of their AML/CFT risk assessment and AML/CFT programme by November 25 last year.  Twelve of those entities were found to be non-compliant with the law – nine failed to provide their audit, two did not respond to the FMA’s request and one did not submit an AML/CFT annual report.

The FMA has not released the names of the 12 entities, saying they were all either small businesses or individuals and to do so would have a “disproportionate effect”.

All of the nine entities which failed to provide an audit are now taking steps to become compliant, the FMA said. The authority said it will take further steps against the two entities that ignored its request and the single entity that failed to provide an annual AML/CFT report if they fail to respond to the warnings.