Final discussion document released on proposals to prevent money laundering and terrorist financing

Associate Justice Minister Clayton Cosgrove has released the third and final discussion document on proposals to prevent money laundering and terrorist financing.

The discussion documents outline proposed regulatory changes to enable New Zealand to meet its Financial Action Task Force (FATF) obligations.

FATF's 33 members include New Zealand, the United States, Great Britain, Canada and Australia.

Mr Cosgrove stated that "New Zealand's stable financial system makes it attractive for international criminals to deposit funds here and then move the money to other jurisdictions, so we must not be a weak target. Money laundering also occurs here, primarily by drug dealers, so these measures are important for making our communities safer".

The third discussion document seeks comment on the proposed framework for monitoring and enforcing businesses' compliance with the FATF compliance requirements.

Mr Cosgrove said that the Government is proposing the most cost-effective, business-friendly option, noting "our aim is to minimise costs by using existing regulatory arrangements rather than creating a new agency to carry out this vital work. For example, it is proposed that the Reserve Bank, the Securities Commission and the Department of Internal Affairs supervise the businesses they already regulate for other purposes".

The Government plans to introduce the proposed framework in two stages to allow more time to consult with industry over the supervisory requirements. Mr Cosgrove said the approach is broadly consistent with the Australian reform process currently underway.

Financial institutions and casinos will be the first group of businesses covered by the new requirements. Other businesses, including lawyers, accountants, and real estate agents, will be not be covered until the second stage, although they will remain subject to their existing legal obligations to prevent money laundering and terrorist financing.

The document Anti-Money Laundering And Countering The Financing Of Terrorism: Supervisory Framework is available on the Ministry of Justice's website at www.justice.govt.nz.

Submissions close on 30 November 2006.

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