Cracking down on money laundering is part of a global response to serious crime and terrorism. New Zealand banks are playing their part by implementing a new law which comes into force on 30 June 2013.
Under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 all New Zealand banks have additional obligations to check customer identity and, in some cases, account activity.
This will contribute to public confidence in the New Zealand financial system and bring New Zealand into line with international best practice. The enhanced regime applies to all banks, and other financial institutions, and builds on existing customer identification processes.
Money laundering is the process of disguising the illegal origin of criminal profits. A number of serious crimes drive money laundering globally. These include drug trafficking, fraud, robbery, illegal prostitution and gambling, arms trafficking, bribery and corruption. Combating money laundering makes it harder for criminals to profit from these activities.
Terrorist groups also launder money to hide the origin and purpose of their funds.
“The recently foiled terrorist plot in Toronto is an example of the kind of activity that the law is targeting,” said New Zealand Bankers’ Association chief executive Kirk Hope.
“We all have a role to play in the new anti-money laundering regime. Banks will be asking customers to provide more information about themselves. It’s important to bear in mind the bigger picture here. This is about New Zealand’s international reputation and fighting very serious crime.”
All banks are required to comply with the new law by 30 June 2013. Some banks are implementing the changes earlier to help ensure a smooth transition to the new requirements.
Chief executive Kirk Hope said house prices were not being spurred along by looser credit conditions as the Reserve Bank claimed. Credit growth was running at about 3 per cent. “This isn’t a credit-driven price issue, it’s a supply-driven price issue,” he said.
Reserve Bank of New Zealand
Kirk Hope talks to Patrick O’Meara about the Reserve Bank’s macro-prudential tools.
Kirk Hope talks to Susan Wood about Bitcoin.
New Zealand Banker’s Association chief executive Kirk Hope said banks were now asking tougher questions of customers, particularly concerning their identity, and closing accounts if necessary.
This week’s sentencing of two Romanian fraudsters provides a useful reminder to be on guard when using your bank card.
The convicted men were planning to set up skimming devices on ATMs in New Zealand, have been fined $1000 each and will be deported from the country.
“While we would like to have seen a higher penalty applied to send a stronger signal to criminals targeting New Zealand bank customers, the good news is they were caught before they managed to access people’s bank accounts. This means our fraud protection systems are working,” said New Zealand Bankers’ Association chief executive Kirk Hope.
Customer security is a major priority for New Zealand banks which work hard to prevent their customers from becoming victims of any kind of financial crime. While banks take care to protect bank accounts from misuse and fraud, customers also have an important role in protecting themselves and their money.
Safety tips when using your card include:
- Guard your card. Treat it like cash. Don’t leave it lying around. Make sure you know where your card is at all times.
- Protect your PIN. Never tell anyone your PINs or passwords – not even the police, bank staff, friends or family.
- Cover up. When entering your PIN number at ATMs and EFTPOS terminals, shield the PIN pad with your other hand. Criminals may ‘skim’ your card details by attaching a device to the card reader, and then ‘shoulder surf’ or use hidden cameras to record your PIN.
- Check your statements. Advise your bank immediately of any unauthorised transactions.
The Reserve Bank’s use of so-called macro-prudential tools to dampen a credit boom or bubble would ultimately see borrowers paying their banks higher loan rates, analysis commissioned by the New Zealand Bankers’ Association says.
Bankers’ association chief executive Kirk Hope said banks were never the target of the measures contained in the bill, which was aimed at reining in abusive loan sharks and dodgy debt collectors. “The most vulnerable consumers could be protected by enforcing the existing laws,” he said.
“Banks have worked really hard and have involved people like Writemark in the development of their product material,” Hope said. They also all have programmes to lift financial literacy among customers, and people in the community.