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Assessment of money laundering and terrorism financing risks

Latest assessment of money laundering and terrorism financing risks published

This week the New Zealand Police Financial Intelligence Unit (the FIU) published an updated assessment of the money laundering and terrorism financing risks that the country faces, called the National Risk Assessment.

This replaces the National Risk Assessment from 2010, and along with Sector Risk Assessments published by the Reserve Bank, the Department of Internal Affairs and the Financial Market Authority, forms part of a comprehensive package of public risk assessments.

The report helps businesses engaged in financial services better understand the scale and nature of the criminal threats they face and how criminals seek to abuse their day-to-day operations.

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.”

The updated National Risk Assessment report released this week recognises changes and the achievements which have been made in the area since the 2010 report.

“Recognising risk and not being complacent helps protect New Zealand’s reputation and presents us as a good place to do lawful business.”

New Zealand’s Money Laundering and Terrorism Financing Risks

Criminals involved in drug, fraud and tax offending commit crime as business enterprises, which need money laundering to avoid detection while making profits available and to fund reoffending.

They seek to obscure the origin of proceeds of crime by moving them through the financial sector, the cash economy, and professional service providers and often by moving funds internationally.

Overseas-based criminal enterprises attempt to capitalise on the good reputation of countries like New Zealand.

They do this by moving funds through international payments or exchanging illicit funds for trade goods.

New Zealand’s reputation can also be abused by using companies or trusts to give overseas transactions an air of respectability, often without funds actually moving through New Zealand.

The threat of terrorism in New Zealand is lower than many of our partners.

However, given the level of international scrutiny on terrorism financing, it is possible that overseas terrorism financers may seek to abuse New Zealand structures using similar methods as international money launderers.

The National Risk Assessment full report can be found here


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