New Suspicious Activity Reporting Guidelines

On June 8, 2018, the New Zealand Police Financial Intelligence Unit (FIU) published new guidelines on suspicious activity reports (SARs) applicable to reporting entities, as defined under Section 5 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act).

The aim of these legally non-binding guidelines is to clarify the obligations imposed on the reporting entities under the AML/CFT Act, by (a) providing guidance on how such entities can comply with their SAR obligations, (b) explaining the basics of money laundering and terrorist financing (ML/TF), and (c) listing indicators and typologies that would serve as red flags raising suspicion of an activity linked to criminal offending.

The responsible person in an organisation to submit the SAR is the compliance officer; however, the suspicion may be raised by any member of the personnel working either in the frontline during on-boarding or ongoing due diligence, or during the account monitoring process.

Besides analysing the required information to be included in a SAR, the guidelines note that reporting entities must submit a SAR via the goAML interface.

The most common techniques used for ML/TF purposes (typologies), as identified in the guidelines refer, inter alia, to the following:

Use of credit cards, cheques, promissory notes etc. as instruments to access funds held in a financial institution, often in another jurisdiction.
Use of wire transfers to electronically transfer funds between financial institutions.
Investment in capital markets to obscure the source of proceeds of crime.
Use of emerging payment technologies for money laundering and terrorism financing.
A non-exhaustive list with indicators/red flag features is also included. The list is divided into two major groups, namely (a) general indicators like personal attributes or high-risk customer characteristics, and (b) industry specific indicators covering bodies such as registered banks and non-bank deposit takers, money services businesses or casinos.

The guidelines further provide for the required information to be included in a SAR, and note that reporting entities must submit a SAR online via the goAML interface. However, there is the possibility for reporting entities to submit a SAR orally in urgent situations. In this case, the reporting entity must submit an electronic version of the report to the FIU within three working days of making the oral report.

As of July 1, 2018, the new guidelines will replace the existing Suspicious Transaction Reporting Guidelines published in 2013, and a wider range of suspicious activity will need to be reported to the FIU.

The new guidelines can be accessed here