NZ central bank warns Kiwibank over anti-money laundering lapses
Oct 28 New Zealand’s central bank issued a formal warning to state-owned Kiwibank Ltd on Wednesday for failing to meet anti-money laundering requirements, in the wake of criticism that the country’s regulatory regime is too lax.
Legal experts have raised concerns about the flow of possibly illegal money into New Zealand, with a relaxed company regime putting the country at risk as a safe haven for money laundering.
In 2012, the European Union removed New Zealand, along with Russia, from its banking and corporate white list for not having strong enough controls against money-laundering.
Kiwibank, which accounts for around 10 percent of New Zealand’s retail banking market, did not fully comply with anti-money laundering procedures in the year ending June 2014, the Reserve Bank of New Zealand (RBNZ) said in a statement.
The failures included not checking the sources of funds brought in by high-risk customers and not conducting due diligence on the ultimate beneficial owners of new customer accounts, the RBNZ said.
Kiwibank had since taken action to fix these problems, it said.
Banks globally have recently faced pressure from regulators to meet tighter anti-money laundering and counter-terrorism rules, prompting some banks to exit sectors that present compliance headaches, such as remittance payments.
Kiwibank, which is owned by the state mail operator New Zealand Post, said in a statement that it accepted it did not meet some of the requirements and had taken steps to remedy the issues identified.