Tough measures to shut down money launderers

A number of ministries and government agencies are pooling their resources to tackle the rising menace of money laundering with progressive measures in place over the next two years.

The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 will come fully into force on June 30, 2013 but the Reserve Bank of New Zealand (RBNZ) notification said financial institutions, casinos and other outlets where money is exchanged or transferred would apply stringent identify checks.

The legislation aims to detect and deter money laundering and terrorism financing. A September 1, 2011 Gazette Notification launched ‘An Identity Verification Code of Practice’ applicable to all entities coming under the supervision of RBNZ, the Financial Markets Authority and the Internal Affairs Department.

“The code sets out an acceptable practice for verifying the name and date of birth of customers (people, not corporations) whom the reporting entities have assessed as low to medium risk. The code details acceptable forms of identification, and outlines when secondary or supporting identification is required – for example, a passport on its own, or a New Zealand Driver License with an Eftpos card,” the notification said.

The code is not mandatory but entities that opt out of it must “adopt practices that are equally effective” so as not to risk non-compliance.

The Code covers a number of financial activities including accepting deposits or other repayable funds from the public, making a loan to or for a customer, issuing a debit or credit card, managing the means of payment, supplying goods through a finance lease (other than for consumer products), providing remittance services which transfer money or property, issuing or accepting liability under life insurance policies, issuing or selling securities and derivatives , safekeeping or administering cash or liquid securities on behalf of other persons exchanging foreign currency.

According to experts, money laundering is the method followed by criminals to disguise the illegal origins of their money. Financers of terrorism use similar techniques to money launderers to avoid detection by authorities and to protect the identity of those providing and receiving the funds.

An expert will analyse various aspects of money laundering in an ensuing issue.

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