The Police say more than one billion dollars is generated annually for laundering, primarily from drug and fraud offending in New Zealand.
The New Zealand Police’s Financial Intelligence Unit (FIU) has published an updated assessment of the money laundering and terrorism financing risks the country faces.
The National Risk Assessment helps businesses engaged in financial services better understand the scale and nature of the criminal threats they face.
“The major groups of crimes known to generate money laundering domestically are drug, fraud and tax offending,” the report says. “The FIU estimates that NZ$1.35 billion is generated annually for laundering, primarily from drug and fraud offending.”
However, the report also notes that the transactional value of the practice is likely to be significantly more.
It warns that: “New Zealand faces an unknown scale of money laundering generated from overseas proceeds of crime. The International Monetary Fund (IMF) estimates that approximately 2-5 % of global GDP (approximately US$2 trillion) is proceeds of crime.”
The FIU says the three key areas of known threat from offshore to New Zealand are in transnational organised crime groups linked to New Zealand, such as transnational drug distribution networks; overseas criminal organisations who may seek to move funds through New Zealand and/or New Zealand’s legal structures; and dedicated money laundering networks, which may also seek to move funds through the New Zealand’s financial system or legal structures.
FIU Manager Andrew Hill says understanding the risk is essential to building an effective national response to money laundering and terrorism financing.
“Even in a comparably safe country like ours, money laundering and terrorism financing harms communities by enabling organised crime to flourish.
“Overseas criminals seeking to mask their illicit funds are also attracted by New Zealand’s reputation as a safe and non-corrupt country.
“We need businesses and service providers to appreciate how and why risks arise. With increased awareness we can more successfully prevent and detect illicit financial activity.”