New Zealand’s Financial Markets Authority issues  AML/CFT monitoring report

New Zealand’s FMA (Financial Markets Authority) has published an AML/CFT monitoring report setting out the areas requiring further attention by the management and boards of reporting entities.

This report covers the two year period from 1 July 2016 to 30 June 2018, during which the FMA examined 145 independent AML/CFT audit reports, carried out 44 onsite visits and 24 desk-based reviews, and issued 18 formal warnings including one public warning. 89 issues requiring remedial action were identified in the one year ending June 2017, up to 175 for the same period in 2018.

During the FMA’s interactions with reporting entities, a number of issues were highlighted, which the regulator said should be addressed by management and boards:

  • AML/CFT programmes that have not been reviewed or updated to align with current business practices ;
  • AML/CFT risk assessments that are not updated when changes in risks occur ( for instance country risk changes or additions in client databases) ;
  • Customer due diligence, including enhanced and ongoing account monitoring, remains problematic for reporting entities as an increasing number of them are using electronic identity verification, but the FMA noted a number of deficiencies with their AML/CFT programmes in this regard.

Reporting entities are expected to update their AML/CFT policies, procedures and controls where required to ensure compliance, according to the regulator. Liam Mason, FMA Director of Regulation, said: “The FMA is requiring more entities to take remedial action following its monitoring. This is more likely now to be accompanied by formal enforcement action as we expect reporting entities to understand and meet their obligations.”

Date: April 1st 2019

To read the full report, please click here.

 

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