New Zealand Law Society - NZ money remitter convicted of AML/CFT offences

NZ money remitter convicted of AML/CFT offences

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Jiaxin Finance Ltd, a money-remitting and currency exchange business, assisted by its owner, Qiang Fu and his mother, Fuqin Che, have been sentenced for offences under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009.

Jiaxin Finance was sentenced in the High Court in Auckland on 3 March to pay a fine of $2.55 million for breaches of sections 91, 92 and 95 of the Act, Mr Fu was sentenced to pay a fine of $180,000 for breaches of sections 91, 92 and 95, and Ms Che was sentenced to pay a fine of $202,000 for breaches of sections 91, 92, 95 and 101.

The parties had been found guilty of charges under the Act on 22 November 2019 ([2019] NZHC 3058).

In her sentencing notes, R v Jiaxin Finance Ltd [2020] NZHC 366, Walker J noted there was no guideline sentencing judgment at appellate level for offending under the AML/CFT regime. She said it was the first sentencing decision for criminal offending under the AML/CFT Act.

Justice Walker said three cases have been taken in New Zealand by the Department of Internal Affairs against money remittance businesses under the civil regime. In each, significant civil pecuniary penalties had been ordered.

"While the risk of reoffending by those found guilty of these sorts of offences may be low, the community still requires a sentence which acts as a deterrent to others."

Jiaxin Finance failed to conduct customer due diligence and failed to report and keep records of suspicious transactions relating to this customer.

Ms Che also separately structured transactions to try to avoid the application of AML/CFT requirements for this customer. She did this by making 14 separate cash deposits totalling $710,772 into his New Zealand bank account. These payments were spread over a period of four days and made at different branches of the bank.