Tough money laundering rules proposed

Rob Hosking

Directors, managers and major shareholders in the financial sector may have to meet new “fit and proper person” standards in proposed changes to money laundering rules.

Almost unnoticed in the heat of the election campaign. Justice Minister Phil Goff on Monday released proposals for tighter laws on money laundering in the post-September 11 world and says that “some re-regulation will be required” to meet stricter international standards.

Goff is not mincing words about this; “The sector will not necessarily welcome greater regulation as it imposes administrative costs. But I expect it to recognise that New Zealand must take action to comply with international standards.”

New Zealand is the first country to volunteer for an evaluation of the sector by the international Financial Action Task Force and Goff’s announcement follows that group’s recommendations.

Apart from possible ‘fit and proper person’ evaluations, changes proposed include:

• A comprehensive monitoring framework to ensure all financial institutions meet standards for countering money laundering and terrorist financing;
• Registration for all people providing money transfer or currency change services;
• Statutory requirements for financial institutions to comply with customer due diligence, and to implement internal anti-money laundering systems and procedures. These will be outlined in an enforceable code of practice
• A requirement that financial institutions obtain, verify and retain information concerning the identity of the originator of wire transfers.

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