RBNZ Reminder Re Economic Sanctions

The Reserve Bank has written to banks and financial institutions reminding them of their obligations in regard to United Nations sanctions that apply in New Zealand.

This step has been taken as a consequence of the terror attacks in the United States.

On 16 March 2001 regulations came into force in regard to Afghanistan, terror suspect Osama bin Laden and the organisation known as al Qaeda, which forbid any financial transactions with them.

Thus today's letter is not taking any additional steps but reminds banks and other financial institutions of what is required of them, given New Zealand's international commitments.

The letter and an accompanying table are attached.

For further information contact
Paul Jackman
Corporate Affairs Manager
Jackmanp@rbnz.govt.nz

25 September 2001

[name]

Dear [name]

UNITED NATIONS SANCTIONS REGULATIONS

1. It is the responsibility of the Reserve Bank of New Zealand to administer the financial aspects of the United Nations Sanctions regulations in New Zealand.

2. As you will be aware, the Government has made regulations that prohibit economic contacts with particular states in order to uphold resolutions of the United Nations Security Council. Attached to this letter is an updated table to inform you of the current status of financial aspects of New Zealand¡¦s United Nations sanctions regulations. We remind you of the need for vigilance and caution in relation to any transactions that may potentially be subject to the prohibitions in the regulations.

3. In light of recent world events, I draw your attention to the financial regulations involving Afghanistan, which came into force on 16 March 2001. The effect of these regulations is included in the attached table.

4. Moreover, while we do not expect that there will be any known assets of terrorists held within New Zealand financial institutions, please ensure you notify the Reserve Bank if your institution becomes aware of any such assets.

5. Further, your vigilance may trigger you to suspect that a transaction is relevant to the investigation or prosecution of any person for money laundering or to the enforcement of the Proceeds of Crime Act 1991. I remind you that, in those circumstances, you must report your suspicion to the Financial Intelligence Unit within the New Zealand Police. In addition, in case you are not already aware, the Financial Action Task Force (FATF) has published a list of jurisdictions whose regulatory frameworks have been assessed as potentially facilitating money laundering. The FATF pronouncements on these ¡§Non-Cooperative Countries and Territories¡¨ is available at www.oecd.org/fatf. The FATF recommends that financial institutions give special attention to business relations and transactions with persons from the non-cooperative countries and territories it lists, taking into account the particular weaknesses identified in the relevant FATF report. Giving special attention to transactions to or from such jurisdictions may also help your organisation to minimise any risk of it breaching, inadvertently, the United Nations sanctions regulations.

6. We expect to include the updated table on the Reserve Bank website in the near future. If you have any questions regarding the contents of, or your organisation¡¦s obligations under, the regulations, please do not hesitate to contact Susan Ivory, Legal Analyst on (04) 471 3713.

Yours sincerely

Stephen Dawe
Legal Adviser
Reserve Bank of New Zealand

UNITED NATIONS SANCTIONS REGULATIONS

Prohibitions Relating to Money, Securities and Assets1
The following prohibitions will not apply where the relevant Minister grants consent to any transaction or has granted a general consent to exceptions to the financial prohibitions. Bosnia and Herzegovina
1994/281
Comm Date 09/12/19945 Iraq
1991/092
Comm Date 07/06/1991 Libya
1993/377
Comm Date 03/12/1993 Yugoslavia (Serbia
and Montenegro)
1992/160
Comm Date 24/12/19924 Afghani
stan
2001/26
Comm Date
16/03/2001 Angola
1998/395
Comm Date 9/10/1998
a Prohibits the transfer of money or securities by any person in New Zealand, or a New Zealand citizen to, or for the benefit of:
i that country's Government; or „Ï „Ï3 4
ii any commercial, industrial or public utility undertaking in that country; or „Ï „Ï3 4
iii any person in that country, or business carried on in that country.
iv In the case of Afghanistan, the Taliban or any Taliban entity (including Usama bin Ladin, the Al-Qaida and Ariana Afghan Airlines). „Ï 4
„Ï
b Prohibits dealing in assets, money, or securities held in New Zealand by:
i that Government, or by any agencies or bodies controlled by that Government; or „Ï 4
ii that Government, any public authority or undertaking of that country; or „Ï 4
iii any person in, or resident in, or any entity including any commercial, industrial or public utility undertaking in, those areas of the Republic of Bosnia and Herzegovina that are under the control of the Bosnia Serb forces, or any entity incorporated in or constituted under the law of those areas in the Republic of Bosnia and Herzegovina that are under the control of Bosnian Serb forces.
iv UNITA (a militarised political grouping in control of large areas of Angola), it¡¦s senior officials and their adult family members.
v The Taliban or any Taliban entity (including Usama bin Ladin, the Al-Qaida and Ariana Afghan Airlines). 2/5

„Ï

„Ï
c Prohibits payments of money comprising income from shares, interest bonds, sale of assets. 2/5
d Prohibits involvement in any economic activities in New Zealand. 2/5

1 In addition, the following regulations do not contain any prohibitions relating to money, securities and assets:
¡P Liberia (1992/381, comm date 24/12/1992)
¡P Sierra Leone (1997/281, comm date 07/11/1997)
¡P Yugoslavia (1991/237, comm date 08/11/1993)
¡P Rwanda (1994/114, comm date 08/11/1993)
¡P Somalia (1992/042, comm date 20/03/1992)
2 These regulations apply to, or are for the benefit of the list in biii.
3 This regulation does not apply to money or securities derived from the sale or supply of petroleum, natural gas products, agricultural products, or commodities exported or originating in Libya after 3 December 1993, provided that the money or securities are paid into a separate bank account, or bank accounts, exclusively for those funds.
4 These sanctions have been suspended since December 1995 in cases where it is clear that the assets, money and securities are not subject to any claim or interest on the part of the successor states, of the former socialist Federal Republic of Yugoslavia other than Serbia and Montenegro. Accordingly, the Minister has granted a general consent to exceptions to these financial prohibitions.
5 These sanctions have been suspended since March 1996. Accordingly, the Minister has granted a general consent to exceptions to these financial prohibitions.

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