New Zealand Money laundering regulations needed

The financial sector needs new regulations to safeguard against money laundering and terrorist financing, Justice Minister Phil Goff said yesterday.

"A discussion paper is in the process of being circulated to the financial sector outlining the new proposals," Mr Goff said.

"The sector will not necessarily welcome greater regulation as it imposes administrative costs, but I expect it to recognise that New Zealand must take action to comply with international standards."

Mr Goff said the financial sector was extensively deregulated in the 1980s and 1990s, and an international evaluation had confirmed that some re-regulation was needed.

Mr Goff said in February that re-regulation was likely to be needed.

Yesterday he said there was no specific evidence that New Zealand was being used by international crime or terrorist groups to launder money or finance terrorism, but it could not be complacent.

He said the proposed regulations would include:
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# a comprehensive monitoring framework to ensure all financial institutions meet standards for countering money laundering and terrorist financing;

# people providing money transfer or currency change services would be subject to a registration regime;

# statutory requirements for financial institutions to comply with customer due diligence, and the implementation of internal anti-money laundering systems and procedures;

# financial institutions will be required to obtain, verify and retain information concerning the identity of the originator of wire transfers; and

# consideration of the practicability of directors and senior managers in the insurance and securities sectors being evaluated to ensure they meet "fit and proper persons" criteria.

The United States Embassy welcomed Mr Goff's announcement.

"New Zealand demonstrates a clear understanding of the importance of international co-operation in the areas of money laundering and terrorist financing, and recognises that it is in our shared interests to work together to combat such criminal activities, Charge d'Affaire's David Burnett said.

"New Zealand's continued technical and training assistance in the Pacific region is also deeply valued by the United States and other members of the international community."

New Zealand's source for business, stock market & currency news on Stuff.co.nz: Money laundering regulations needed - Goff