Transnational criminals observed in TBML activities in New Zealand but customs sharpening focus says FATF

Transnational organised crime groups have been detected in trade-based money laundering (TBML) activities in New Zealand while customs operations are gearing up to focus more sharply on TBML operations according to the Financial Action Task Force (FATF).

In its newly released Mutual Evaluation Report New Zealand-2021, FATF concludes that while the country’s measures to combat money laundering and terrorist financing are delivering good results, the country needs to focus more on improving the availability of beneficial ownership information, strengthen bank supervision and implement targeted financial sanctions

Organised crime

Transnational criminal organisations may seek to exploit New Zealand as a conduit for funds to capitalise on the country’s reputation for high integrity and stability, and the country has seen a rise in the presence of gang members establishing themselves there according to the evaluation.

It says this has provided a setting for a range of organised criminal activities using various money laundering techniques. The New Zealand Police Financial Intelligence Unit (NZPFIU) has observed instances of TBML, the use of wire transfers, the use of shell companies, and investment in real estate.

Anti-TBML collaboration

The evaluation found that customs is working to build more international connections with New Zealand’s major trading partners and undertaking comprehensive matching of import and export records relating to the same transaction to identify where TBML may be occurring.

The NZPFIU meanwhile is working closely with customs for detection and investigation of TBML, smuggling and other criminal offences.

Customs also identifies potentially suspicious activities to pass to its partners overseas. These types of joint investigations, particularly around TBML, are likely to increase as customs expands its financial investigation capability and as more integrated data sharing mechanisms come online.

Banking supervision under resourced

Supervision of the banking sector in particular needs greater resourcing according to the evaluation.

It highlights that measures to stop money laundering in the non-financial sector are new and businesses need to better understand and mitigate their risks and there is scope to improve the use of effective, proportionate and dissuasive sanctions.

FATF’s Mutual Evaluation Report New Zealand-2021 can be found here.


Categories: Trade Based Financial crimes News

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