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AML/CFT monitoring report highlights concerns, sets focus
The Financial Markets Authority (FMA) has published an
Anti-Money Laundering and Countering the financing of
terrorism (AML/CFT) monitoring report setting out the areas
requiring further attention by the management and boards of
the reporting entities it supervises.
The FMA is one of three supervisors for AML/CFT in New Zealand, alongside the Reserve Bank of New Zealand and the Department of Internal Affairs. The FMA supervises approximately 800 reporting entities.
The report covers the period from 1st July 2016 to 30 June 2018. During this period, the FMA issued 18 formal warnings, including one public warning.
The report highlights a number of issues that should be addressed by boards and management:
•
AML/CFT programmes that have not been reviewed or updated to
align with the current businesses’ current
practices
• AML/CFT risk assessments that are
not updated when changes in risks occur
•
Customer due diligence including enhanced and ongoing
account monitoring remains problematic for reporting
entities. An increasing number of entities are using
electronic identify verification, but the FMA noted a number
of deficiencies with their AML/CFT programmes in this
regard.
Details of the FMA’s future monitoring focus are also set out. They include:
• An
increased focus on reviewing independent audit
reports
• More in-depth reviews of client
on-boarding and account monitoring processes
•
When undertaking operational reviews, the FMA will focus
more on front-line staff who perform tasks such as client
on-boarding, to assess their understanding of the
obligations.
Liam Mason, FMA Director of Regulation, said: “The laws surrounding anti-money laundering and countering the financing of terrorism have now been in place for more than five years. We expect to see more mature policies, procedures and controls in place.”
“The FMA is requiring more entities to take remedial action following its monitoring. This is more likely now to be accompanied by formal enforcement action, as we expect reporting entities to understand and meet their obligations. Entities have had enough time to prepare now, and it is only fair to the vast majority of organisations we supervise who meet the legal requirements.”
The FMA identified 89 issues requiring remedial action in the period to end of June 2017. This rose to 175 issues for the same period in 2018.
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