Wellington, July 18, 2019
The Department of Internal Affairs (DIA) has issued a formal warning to seven reporting entities within the Regus Management Limited (RNZML) designated business group under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act).
The formal warning to RNZML was issued on June 13, 2019.
RNZML company number 3409672, provides a range of office, co-working and meeting spaces in 24 centres throughout New Zealand, among them, 13 provide virtual office services for customers in New Zealand and overseas.
RNZML started as a trust and company service provider in 2014 and has since transitioned to a designated non-financial business or profession under the AML/CFT Act.
RNZML failed to meet AML/CFT Act requirements that include failing to conduct customer and enhanced due diligence, failing to keep records and failing to establish, implement and maintain a current risk assessment and AML/CFT programme.
DIA’s AML Group Director Mike Stone said that it was not alleged that RNZML was involved in money laundering or the financing of terrorism.
“Criminals may choose to use virtual offices based in New Zealand to trade on our clean reputation no matter where they are in the world. Reporting entities, in particular virtual office service providers that have overseas customers need to hold detailed records on their customers and keep those records up to date. This was the focus of the Department’s regulatory inspection of RNZML over an extended period and we have continually worked with them to improve their AML/CFT compliance,” he said.
Monitoring to continue
The Department required RNZML to take immediate action to rectify all areas where it was non-compliant with its AML/CFT obligations.
The Department will continue to monitor the company and consider further enforcement action if it engages in conduct that does not comply with the AML/CFT Act.
This is the first formal warning issued to a designated non-financial business or profession and eighth formal warning to be published as a summary.
Since the AML/CFT Act came into force on 30 June 2013, the Department has issued 30 non-public formal warnings, either for failure to meet particular risk assessment or AML/CFT programme obligations or for failing to submit an annual AML/CFT report.
About Formal Warnings
Formal warnings can be issued when a supervisory agency has reasonable grounds to believe that a reporting entity has engaged in conduct that constitutes a civil liability act. These civil liability acts are specified in section 78 of the Act.
The formal warning has been issued to RNZML on the basis that the Department has reasonable grounds to believe that Regus New Zealand Management Limited has (a) failed to conduct customer due diligence as required by subpart 1 of Part 2 of the Act (section 78(a) of the Act) (b) Failed to keep records in accordance with the requirements of subpart 3 of Part 2 of the Act (section 78(e) of the Act) (c) Failed to establish, implement, or maintain an AML/CFT programme (section 78(f) of the Act).