New Zealand’s compliance with new international anti-money-laundering regulations aimed at combatting terrorism must come at “absolutely minimum cost” to local business, according to Associate Justice Minister Clayton Cosgrove.
The new regulations aim to both detect and prevent money being diverted to terrorism and other illegal operations. They were drafted by an intergovernmental body, the Financial Action Taskforce (FATF). However, New Zealand financial institutions, notably Kiwibank, are concerned about both the cost and effectiveness of the precautions. They require extensive tracking of large-scale money transfers and so involve a lot of extra work, particularly in ICT. Kiwibank’s chief executive, Sam Knowles, is a particularly outspoken critic (Computerworld, May 12).
Minimising costs means “to the greatest extent, using existing agencies and relationships, both external and internal”, so as little extra apparatus as possible need be set up to comply with FATF requirements, says the minister’s representative.
A report on the likely cost of compliance has been commissioned, but was incomplete when Computerworld spoke to Deloitte, which was commissioned to produce it.
Compliance will be assessed in April 2009, by FATF and the Asia-Pacific Group on Money Laundering. Forty recommendations and nine special recommendations have been drawn up by FATF, including requirements which “ensure that [national] financial institution secrecy laws do not inhibit implementation of the FATF recommendations” and that “financial institutions should not keep anonymous accounts or accounts in obviously fictitious names”.
Institutions should also maintain, for at least five years, all necessary records on transactions, domestic or international, to enable them to comply with information requests from authorities.