Govt starts work on extending anti-money laundering provisions to professions

The government has started work on expanding anti-money laundering obligations to professionals including lawyers and accountants. That comes as the number of suspicious transactions reported to law enforcement agencies has more than tripled since legislation came into effect.

Ministry of Justice officials have started early work on considering a second tranche of legislative reform that would extend anti-money laundering requirements to professions and businesses dealing in high-value goods, such as lawyers, accountants, conveyancing practitioners and real estate agents, Justice Minister Amy Adams said at the Asia/Pacific Group on Money Laundering annual meeting in Auckland.

"These are currently covered under the Financial Transactions Reporting Act but a next stage would see them subject to the more robust AML obligations under the AML/CFT [Anti-Money Laundering and Countering Financing of Terrorism] Act," she said. "You can expect more of an update on this work as it progresses."

The AML/CFT law 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.

Ms Adams today told the conference the workload of the police's financial intelligence unit has soared since the legislation's introduction, with the division receiving more than 12,000 reports of suspicious transactions in the 2013/14 financial year compared to 3500 a year earlier. The unit, which provides financial intelligence relating to suspicious transactions, money laundering, the financing of terrorism and other serious offences, accepted 3423 reports of suspicious transactions in the March quarter, up from 3199 a year earlier, according to its latest quarterly typology report published in April.

"Suspicious transactions reports are an invaluable tool for law enforcement agencies to 'follow the money trail' in detecting serious crime and reduce the harmful effects of their offending," Ms Adams said.

In its April update, the police unit said only a small number of suspicious transaction reports related to dealers of high-value assets, and New Zealand's exposure to those forms of money-laundering had traditionally been low, with cars "a popular choice for the integration and layering of illicitly derived funds."

"However, the growth of e-commerce is facilitating transnational purchases of various high value asset types online, including very high value assets such as gemstones," the report said.

The government is also in the process of amending the money-laundering offence and increasing reporting requirements as part of the Organised Crime and Anti-corruption Legislation Bill. The legislation, which has passed its second reading, will remove the need for money-laundering proceeds to be generated from offending punishable by more than five years in jail, and removes the need for the Crown to prove a defendant had a specific intent to conceal the proceeds of a crime, Ms Adams said.

The bill will also require financial institutions to report wire transactions of more than $1000 and all physical cash transactions of $10,000 and up.

"The amendment will improve our ability to detect and investigate money-laundering and align New Zealand with international best practice for combating money-laundering," Ms Adams said. "It also brings us into greater alignment with our closest partners in the region, which will make it easier for law enforcement to share information."

(BusinessDesk)