New Zealand Law Society - Another AML/CFT formal warning from DIA

Another AML/CFT formal warning from DIA

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The Department of Internal Affairs says it has issued a formal warning under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 to seven reporting entities within the Regus Management Ltd designated business group. The formal warning to RNZML was issued on 13 June 2019. 

The department says RNZML provides a range of office, co-working and meeting spaces in 24 centres throughout New Zealand, among them, 13 provide virtual office services for customers in New Zealand and overseas. It says RNZML started as a trust and company service provider in 2014 and has since transitioned to a designated non-financial business or profession under the AML/CFT Act.

Internal Affairs says RNZML failed to meet AML/CFT Act requirements that include failing to conduct customer and enhanced due diligence, failing to keep records and failing to establish, implement and maintain a current risk assessment and AML/CFT programme. It says it is not alleged that RNZML was involved in money laundering or the financing of terrorism. 

“Criminals may choose to use virtual offices based in New Zealand to trade on our clean reputation no matter where they are in the world,” says Mike Stone, Director of the department’s AML Group. 

“Reporting entities, in particular virtual office service providers that have overseas customers need to hold detailed records on their customers and keep those records up to date. This was the focus of the department’s regulatory inspection of RNZML over an extended period and we have continually worked with them to improve their AML/CFT compliance.”

The department says it required RNZML to take immediate action to rectify all areas where it was non-compliant with its AML/CFT obligations. It will continue to monitor the company and consider further enforcement action if it engages in conduct that does not comply with the AML/CFT Act.

Internal Affairs says this is the first formal warning issued to a designated non-financial business or profession and eighth formal warning to be published as a summary.

"Since the AML/CFT Act came into force on 30 June 2013, the department has issued 30 non-public formal warnings, either for failure to meet particular risk assessment or AML/CFT programme obligations or for failing to submit an annual AML/CFT report."

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