Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Kiwibank blocked from closing money remitter's accounts

Kiwibank blocks from closing money remitter's accounts


By Paul McBeth

July 1 (BusinessDesk) - Kiwibank has been blocked from closing E-Trans International Finance's bank accounts after the money remitter challenged the state-owned lender's move in the High Court.

In March, the Wellington-based bank told E-Trans it was going to close the firm's accounts because its business as a remitter posed too great a risk and burden to Kiwibank under the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT), which places stricter controls on cash flows. E-Trans opposed the decision, saying it breached the Code of Banking Practice, and sought a court order to keep the accounts open pending a full hearing in the High Court in Auckland.

In a June 23 judgment published on the Ministry of Justice's website, Justice Mary Peters sided with E-Trans, restraining Kiwibank from closing any and all accounts and facilities with the company until the outcome of the money remitter's proceedings. The company sends money mainly to Asian countries on behalf of its New Zealand clients.

Justice Peters said the balance of convenience fell in E-Trans' favour because the legislation was in effect when E-Trans opened its most recent account, and because the company would probably have to close without an account at a major trading bank.

"That outcome should be avoided if E-Trans establishes a serious issue to be tried, as it has," the judge said. "I have considered whether damages would provide an adequate remedy to E-Trans. I am not satisfied that they would, given the consequences to which I have referred."

The AML/CFT legislation came into effect in mid-2013, increasing the monitoring of financial firms in a bid to stamp out as much as $1.5 billion of money laundering. Lenders bear the cost of increased compliance.

E-Trans shareholder and director Xiaohua Sun told the court in evidence that eight of 15 specialist money remittance and currency exchange providers trading in Auckland had their bank accounts closed, forcing them to scale back their operations.

"On the evidence before me there is no prospect of E-Trans opening an account or accounts with another major trading bank if Kiwibank closes the accounts," the judge said.

Kiwibank argued that the burden and risk under the legislation arising from E-Trans' custom was disproportionate to the return, though the money remitter disputes the lender's analysis of the business and burden imposed by the act.

"Moreover, E-Trans has previously expressed a willingness to compensate the bank for additional costs if needs be," Justice Peters said.

The matter was scheduled to be called today where the parties were to file papers setting out the directions sought from the court.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Science Media Centre: Funding For R&D In New Zealand – Expert Reaction

Research, Science and Innovation Minister Dr Megan Woods has today announced $401.3 million funding for research and development through Budget 2020 and the COVID Response and Recovery Fund. The fund includes $150 million for an R&D loan scheme, ... More>>

ALSO:

Maritime NZ: NZ Joins Global Initiative Keeping Ports Open And Freight Moving

New Zealand has joined an international port authorities’ global initiative for safe and efficient movement of goods and shipping during the COVID-19 crisis. World-wide, 56 port authorities have agreed how they will work together facilitating maritime ... More>>

ALSO:

National: National Backs Businesses With $10k JobStart

National will provide a $10,000 cash payment to businesses that hire additional staff as part of our commitment to keeping New Zealanders in jobs, National Party Leader Todd Muller and Finance spokesperson Paul Goldsmith have announced. Our JobStart ... More>>

ALSO:

DIY Law: Government Exempts Some Home Improvements From Costly Consents

Homeowners, builders and DIYers will soon have an easier time making basic home improvements as the Government scraps the need for consents for low-risk building work such as sleep-outs, sheds and carports – allowing the construction sector ... More>>

ALSO:

Media Awards: The New Zealand Herald Named Newspaper Of The Year, Website Of The Year At Voyager Media Awards

The New Zealand Herald has been labelled a “powerhouse news operation” as it claims the two biggest prizes – Newspaper of the Year and Website of the Year – along with many individual awards at the 2020 Voyager Media Awards Website of the ... More>>

ALSO:

ASB Bank: ASB Takes The Lead Again With New Low Home Loan Interest Rate

ASB has moved again to support its customers, cutting a number of home loan rates, including the two-year special rate to a new low of 2.69% p.a. Craig Sims, ASB executive general manager Retail Banking says the reduced rate will be welcome news for many ... More>>

ALSO:

Nathan Hoturoa Gray: The Problems With Testing And Case Statistics For Covid-19

To begin to understand disease transmission in a country requires adequate testing of your population with properly vetted, accurate tests. As the world struggles to find what 'adequate percentage' of the population is necessary, (estimates predict ... More>>

ALSO:

RNZ: Fletcher Building To Lay Off 1000 Staff In New Zealand

The construction company will cut around 10 percent of its workforce as it struggles with the fallout from Covid-19. More>>

ALSO:

Can Pay, Won't Pay: Cashflow Moves Urged

Government Ministers are asking significant private enterprises to adopt prompt payment practices in line with the state sector, as a way to improve cashflow for small businesses. More>>

ALSO:

Gordon Campbell: On Why We Should Legally Protect The Right To Work From Home

For understandable reasons, the media messaging around Level Two has been all about “freedom” and “celebration”, but this is not necessarily going to be a universal experience. When it comes to workplace relations, Level Two is just as likely to ... More>>

ALSO:



New Zealand Government: Supporting Kiwi Businesses To Resolve Rent Disputes

The Government will legislate to ensure businesses that suffered as a result of the COVID-19 response will get help to resolve disputes over commercial rent issues, Justice Minister Andrew Little announced today. More>>

ALSO:


Science Media Centre: Understanding 5G Concerns – Expert Q&A


Recent attacks on cell phone towers have brought concerns over the rollout of 5G technology into sharp relief.
While scientific research has consistently shown that the technology does not adversely affect human health, public concerns about its impact have spread around the world, fueled in part by growing misinformation online. The SMC asked experts to comment... More>>

ALSO:


Trade: Record Monthly Surplus As Imports Dive

Imports in April 2020 had their biggest fall since October 2009, resulting in a monthly trade surplus of $1.3 billion, Stats NZ said today. “This is the largest monthly trade surplus on record and the annual goods trade deficit is the lowest ... More>>

ALSO:


Media Blues: Stuff Chief Executive Buys Company For $1

Stuff chief executive Sinead Boucher has purchased Stuff from its Australian owners Nine Entertainment for $1.
The chief executive was returning the company to New Zealand ownership, with the sale is expected to be completed by 31 May.
"Our plan is to transition the ownership of Stuff to give staff a direct stake in the business as shareholders," Boucher said in a statement.... More>>

ALSO:

RNZ: Bar Reopening Night 'much, Much Quieter'

Pubs and bars are reporting a sluggish first day back after the lockdown, with the fear of going out, or perhaps the joy of staying home, thought to be a reason for the low numbers. More>>

ALSO:

Stats NZ: New Zealand’s Population Passes 5 Million

New Zealand's resident population provisionally reached 5 million in March 2020, Stats NZ said today. More>>

NIWA: Seven Weeks Of Clearing The Air Provides Huge Benefits: Scientist

Seven weeks of lockdown has provided evidence of how pollution can vanish overnight with benefits for the environment and individuals, says NIWA air quality scientist Dr Ian Longley. Dr Longley has been monitoring air quality in Auckland, Wellington ... More>>

ALSO:

Government: Milestone In Cash Flow Support To SMEs

A significant package of tax reforms will be pushed through all stages in Parliament today to throw a cash flow lifeline to small businesses. More>>

ALSO: