Suspicous transactions: NZ banks in global probe

Photo: NZ Herald
Photo: NZ Herald
Two New Zealand banks have been named in an international investigation into money laundering.

ASB and BNZ have been named for their involvement in processing US$1.8 million (NZ$2.7 billion) worth of transactions flagged as suspicious.

Buzzfeed on Sunday broke news of its investigation into the FinCEN documents - more than 2100 files which flag suspicious activity reports between 1999 and 2017 involving more than US$2 trillion in transactions.

The Financial Crimes Enforcement Network, or FinCEN, is the agency within the US Treasury Department charged with combating money laundering, terrorist financing, and other financial crimes.

It collects millions of these suspicious activity reports, known as SARs. It makes them available to US law enforcement agencies and other nations' financial intelligence operations.

But according to Buzzfeed it does little to force the banks to shut the money laundering down.

The files have also been shared with the International Consortium of Investigative Journalists and more than 100 news organisations in 88 countries.

The New Zealand Herald has not seen the original files but data on the ICIJ website has a country-by-country breakdown.

It shows US$196,499 was sent from ANZ to ASB in two transactions on July 27, 2016 and ASB also received US $1,540,000 from China Merchants Bank in five transactions on June 14, 2013 and June 26 2013.

In a statement ASB chief risk officer Carl Ferguson said it was responsible for reporting suspicious transactions to the New Zealand Police Financial Intelligence Unit under the Anti Money Laundering and Counter Financing of Terrorism Act 2009.

"The Police then liaise with counterparts in other jurisdictions, as required."

Ferguson said ASB had modern and effective systems in place to monitor and report activity which is potentially illegal.

"We are committed to playing our part to combat this activity and reduce money-laundering both in New Zealand and globally, and we take our reporting obligations very seriously.

"If we consider a customer's transactions or behaviour to be suspicious we report this to the Police, and in some instances we will exit customers where it is clear their transaction behaviour is inappropriate or in breach of our obligations."

A further US$78,312 was moved from the Bank of New Zealand in four transactions on November 14, 2011 and January 9, 2013 to Taiwan's E Sun Bank via British bank Standard Chartered Plc, according to the ICIJ.

A BNZ spokesman said it had reviewed these transactions between 2011 and 2013 again and had not identified any concerns in relation to its processes and how these transactions were managed at that time.

"As a highly regulated bank, we are required to be extremely vigilant on all matters relating to money laundering, sanctions and terrorist financing.

"We constantly review and strengthen our controls to manage a continuously changing regulatory and operating environment."

The Herald has also sought comment from banking regulator the Reserve Bank.

ICIJ said it was publishing a portion of the data in the public interest.

"While the transactions do not necessarily establish any criminal misconduct or other wrongdoing, the data offers an unprecedented overview of how money - flagged as suspicious, and in some cases linked to corruption, fraud, sanctions evasion or other crimes - flows around the globe via networks of correspondent banks," it said.

Money laundering is used by criminals to disguise the illegal origins of their money.

New Zealand introduced the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 in 2011 and it came into full force on June 20, 2013.

It places obligations on New Zealand's financial institutions, casinos, virtual assets service providers, accountants, lawyers, conveyancers and high-value dealers to detect and deter money laundering and terrorism financing.

The Act is designed to ensure that businesses take appropriate measures to guard against money laundering and terrorism financing.

 

 

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