Govt announces changes
A costly anti-money laundering system that catches billions in illicit financial activity will be both relaxed and strengthened by the Government.
Justice Minister Kiri Allan said yesterday the Government would first be grabbing ‘‘lowhanging fruit’’ and simplifying obligations what were ‘‘onerous’’, particularly for rural businesses, after a Ministry of Justice report into the system made 215 recommendations.
Also being discussed was remedying the ‘‘substantive underfunding’’ described in the report. ‘‘We’re renowned at the moment for leading the world in terms of our settings in this area. We want to maintain that. But we also do want to make sure that we acknowledge that the users can use the system effectively,’’ Allan said.
The anti-money laundering system under existing law has been in place for five years, requiring banks, accountants, lawyers and other businesses dealing in high-value transactions to meet certain requirements and obligations to prevent and help authorities detect laundering, and the financing of terrorism.
A Ministry of Justice review of the system found that it was overall a ‘‘sound regulatory regime’’, though there needed to be a more flexible ‘‘risk-based’’ approach and the government agencies involved were ‘‘not sufficiently resourced’’.
The system as a whole cost $260 million each year, the report said, much of the cost, $246m, being paid by the private sector organisations required to adhere to the rules. The regime had, within 10 years, disrupted $1.7 billion in illegal drugs and fraud, and $5b in ‘‘broader criminal activity’’.
The ministry made 215 recommendations, most of which were technical. Legislative changes recommended included raising the penalties for bringing undeclared cash into the country.