State-owned Kiwibank pulled up by RBNZ for not meeting all requirements of money laundering laws

State-owned Kiwibank pulled up by RBNZ for not meeting all requirements of money laundering laws

State-owned Kiwibank has been slapped with a formal warning from the Reserve Bank for not fully meeting all the requirements of new anti-money laundering legislation.

The specific concern is that Kiwibank did not follow customer due diligence (CDD) obligations under the legislation, which was introduced in June 2013.

The RBNZ notes that Kiwibank has since last year addressed the problems, though it is not clear why the RBNZ has therefore gone ahead and issued the warning today.

Asked about this, the RBNZ's response was: "We have asked Kiwibank to immediately rectify all areas where it is non-compliant with its obligations. Kiwibank has advised us that it is committed to doing so, and that it has taken the necessary actions to remedy the identified issues. The Reserve Bank will continue to monitor Kiwibank closely."

Kiwibank said in a statement that it accepted it did not meet some of the requirements during the period from June 2013 to June 2014 and has taken steps to remedy the issues identified.  It has comprehensive compliance programmes in place and is committed to ensure its AML programme operates effectively to prevent any attempted laundering of money, Kiwibank said.

Kiwibank spokesman Bruce Thompson said when the new rules came into effect the bank had to do such things as new identity checks on existing customers, and he conceded that in the first year Kiwibank had "not got all the boxes ticked" and as a result was now getting "public admonishment" from the RBNZ that it had to accept. "Most of it was done. We had some shortcomings," he said.

This is the statement the Reserve Bank issued today:

The Reserve Bank of New Zealand (RBNZ) has today issued a formal warning to Kiwibank Limited (Kiwibank) under section 80 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act). As the supervisor of banks for compliance with their Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) obligations, the RBNZ has reasonable grounds to believe that for various periods of time between 30 June 2013 and June 2014, Kiwibank did not fully meet all the requirements in respect to the following customer due diligence (CDD) obligations under the Act:

  • did not always conduct CDD on the beneficial owner of a new customer and any person acting on behalf of a new customer (as required under sections 14(a) and 11(1)(b) and (c));
  • did not collect addresses of customers performing occasional transactions (as required under section 15(d));
  • did not always conduct screening of politically exposed persons (as required under section 26);
  • did not always take reasonable steps to verify information relating to the source of funds or the wealth of the customer (as required under section 24(1)(b)); and
    • did not consider terminating customers’ accounts in response to its ongoing non-compliance with section 24(1)(b) (as required under section 37).

As a result Kiwibank’s AML/CFT programme did not, during the specified period, fully include adequate and effective procedures, policies, and controls for complying with its CDD requirements as required by section 57(c).

The RBNZ notes that since June 2014, Kiwibank has taken remedial action to address these matters.

This is the statement that Kiwibank issued:

Kiwibank has received a formal warning from the Reserve Bank of New Zealand (RBNZ), relating to failure to meet some of the requirements of the Anti-Money Laundering/Countering Financing of Terrorism Act which came into effect in 2013.

The RBNZ found that during the period June 2013 to June 2014, Kiwibank did not always have fully compliant procedures in relation to Customer Due Diligence requirements of the Act.

This included:

·         Requirements for some existing customers to “top up” their identification details (new or additional information) to the required standard

·         Performing of certain checks for  customers considered high risk persons

·         Verification of the source of funds for certain high risk customers

·         The collecting of address information for customers who might conduct occasional transactions in a Kiwibank branch

Kiwibank accepts that it did not meet some of the requirements during the period and has taken steps to remedy the issues identified.  It has comprehensive compliance programmes in place and is committed to ensure its AML programme operates effectively to prevent any attempted laundering of money.

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At a rough guess, it is not jut KiwiBank that has not complied with the Money Laundering process exemptions. It is most countries as well.

How else does one get so much loot from overseas interests to buy up large in all aspects of New Zealand Property. Is it a Ponzi. It cannot all be from legitimate enterprises, as it would not have dried up so fast in Awkland's heavily over priced real estate. s soon as taxation is mentioned.

It is one thing to make money by printing and coining it. But importing it willy nilly is a crime, unless I am mistaken, if no intent to repay. A ponzi is a ponzi, is a ponzi

Tax avoidance is another issue. Do banks advise their overseas clients to pump up the local real estate market to make "Legal" capital gains, to launder it again and again and sit on the proceeds.

We have had a lot of heavy duty buying in the past few years. Was duty paid, was the Bank avoiding doing their duty?.

Can we please get the "Seriously Flawed Fraud Commission" to investigate just where the buck stops. Because as far as I can see, it was a crime to import money without due process of the law.

Or are Banks still now exempt from prosecution ala 2008.

Is a derivative an import license to counterfeit and make and export money at any price and any risk?. And now leaving us high and dry and spinning in the wind, nicely laundered and shrunk in size and with substandard interest for mostly elderly deposit holders who acted in good faith and may also suffer obr into the bargain..

Because if so, then that is another crime, I would like to see investigated to the Nth degree of the law.

Some high class citizens appear to be avoiding the letter of the law, plus expenses, as they make the law changeable to suit their needs and wants.

The IRD I thought stood for Inland Revenue Department. If revenue is imported, laundered and white washed, are they too, now dazzled by the brilliance or what?.

Because as far as I can see, it is not the heavily taxed locals that are the problem, plus GST. (Plus diesel and other fuel taxes and expenses for those not able to offset them)

It is the skimmers and scammers avoiding the issue that will benefit from the undue non-due diligence.

When it smells like a turd, or smells a bit fishy, where do the politicians stand, up wind or down wind in this matter. Or are they also squeaky clean as a Bank. ?

Kiwi or not. All the same to me. Why pick on just one.?

Can we have it back dated this investigation.? Or is that exempt as well.?

Key thing here is that ALL New Zealand Banks were affected by this legislation in 2013.....so it is interesting the Kiwibank have been the only "main bank" pulled up by the RBNZ.

It also explains somewhat why some of the other banks had fielded "why do we have to provide this? Kiwibank didn't ask us to re-verify our ID and Address details!"

Ah....it all becomes clear.

Hopefully now when one of my staff ask a client to provide refreshed ID and Address Verification details I hope the person being asked accepts that this is indeed a "bank wide" request and due to legislative requirements.....not just the Bank being difficult.