Banker's Academy AML Training by Country

Anti Money Laundering (AML) By Country: New Zealand

Anti Money Laundering (AML) in New Zealand

Money laundering in New Zealand is a not a pervasive problem. New Zealand maintains a strong Anti Money Laundering (AML) system in an effort to protect against the potential for money laundering and terrorist financing. New Zealand is among one of the many countries committed to combating money laundering and terrorist financing by implementing the FATF’s standards. Article 7 of the UN Convention Against Transnational Organized Crime, which New Zealand ratified in 2002, requires institutions to establish robust AML/CFT regulatory and supervisory regimes for the banking and non-banking sector.

In October 2003, New Zealand underwent an assessment of its compliance with the FATF Recommendations. A summary of the findings from the evaluation is publicly available: New Zealand: Report on Observations of Standards and Codes, FATF Recommendations for Anti Money Laundering and Combating the Financing of Terrorism (ROSC).

The legislative measures New Zealand has in place for combating money laundering and terrorist financing are sound. Over time, the country has effectively enhanced and improved those measures. Although evaluators have identified some changes that would enhance the system, a number of these changes have already been made while others are being considered by the government.

In December 2003, New Zealand also signed the United Nations Convention Against Corruption. Article 14 of that Convention requires State Parties to implement comprehensive AML measures and to use the standards established by international and regional AML bodies (such as the FATF) as a guideline. Recently, the United Nations Security Council strongly urged UN member states to comply with FATF standards (Security Council Resolution No. 1617, 29 July 2005).

The Economy of New Zealand

Historically, New Zealand's economy has been based on a foundation of agricultural exports including dairy, fruit, vegetables and meats. In addition, the economy has benefitted by maintaining strong economic relations with Australia. Currently, the countries are partners in Closer Economic Relations (CER), which promotes free trade between New Zealand and Australia. This dynamic partnership has enhanced business and manufacturing services operations throughout both regions.

Over the past 20 years, the Government of New Zealand has successfully transitioned the country from an agrarian economy to a more industrialized, free market economy. As a result, the country per capita income has increased for eight consecutive years and topped off in 2007 at US $27,300 in purchasing power parity terms. The unemployment rate dropped drastically from 7.8% in 1999 to 3.2% in December 2007 further demonstrating the resiliency of New Zealand’s economy.

Banking In New Zealand

All banks operating in New Zealand are required to register with the Reserve Bank of New Zealand. Established in 1934, the Reserve Bank of New Zealand is the central bank of New Zealand and upholds its role as a predominantly policy driven organization. According to the Reserve Bank of New Zealand Act 1989, the purpose of the central bank is to:

Operate monetary policy to maintain price stability.
Promote the maintenance of a sound and efficient financial system.
Meet the currency needs of the public.

Currently, there are 18 banks registered with Reserve Bank of New Zealand, including the Bank of New Zealand (BNZ), which is one of the largest and oldest banks in the country. The first branch of BNZ opened in 1861 and has enjoyed over 150 years of banking in the region with more than 192 branches to its name. In October of 2008, the Bank of New Zealand responded to changes in the New Zealand way of life and officially changed its name to BNZ, updating its logo and advertising efforts.

Currency in New Zealand

New Zealand’s currency is the New Zealand Dollar (NZD). In addition to circulating throughout New Zealand, it is also employed in the Niue, Tokelau, Pitcairn and Cook Islands. The NZD distinguishes itself as being one of the sixteen most traded currencies in the world.

The NZD is generally written with the dollar sign $, or NZ$. The NZD is commonly referred to as the "Kiwi" by the public. Like the United States dollar, the NZD is divided into 100 cents.