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$4 million penalty for repeated non-compliance

Jin Yuan Finance Ltd (Jin Yuan), an Auckland based money remitter, has been fined $4 million plus costs for repeated non-compliance under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. The High Court judgment for the penalty was delivered on 3 October 2019 following a penalty hearing on 24 July 2019.

Jin Yuan was monitored closely by the Department of Internal Affairs as it had a history of non-compliance since 2014 and was issued a formal warning for compliance failures in 2015. Jin Yuan had repeatedly breached requirements to conduct customer due diligence, adequately monitor accounts and transactions, keep records, establish, implement, and maintain an AML/CFT programme, and ensure that its branches and subsidiaries complied with the AML/CFT Act.

Mike Stone, Director AML Group, Department of Internal Affairs said, “This result highlights the severity of the offending for businesses that persistently fail to comply with the AML/CFT Act – the cost of non-compliance is high.”

“This judgment demonstrates the use of effective, proportionate and dissuasive sanctions against businesses that don’t comply with their AML/CFT obligations.”

Despite numerous engagements with the Department, Jin Yuan repeatedly failed to meet their obligations under the Act and didn’t action remediation plans that were put in place to help them meet their compliance requirements.

"When there are serious breaches and systemic non-compliance, we are willing to take strong regulatory action. It is important that we take regulatory action when there is a risk that criminals are exploiting New Zealand businesses to launder the proceeds of crime,” says Mr Stone.

Every year about $1.35 billion from the proceeds of crime is laundered through New Zealand businesses causing harm to communities and damaging the reputation of New Zealand businesses.

“Our role is to educate businesses on their compliance requirements, and we work closely to help them understand their AML/CFT obligations. By detecting and deterring money laundering and terrorism financing, they are doing their bit to protect New Zealand’s financial system and its reputation as a good place to do business,” says Mr Stone.

The Department supervises a range of businesses who must comply with the AML/CFT Act, including financial institutions, trust and company service providers, lawyers and conveyancers, accountants, real estate agents, high value dealers and the Racing Industry Transition Agency.

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