Published by: Asia Pacific AML |
Fighting financial crime and the evil that follows it, such as distribution of illegal substances and gang wars, is not the responsibility of law enforcement alone. Many countries have laws that enforce the requirement for businesses to identify and report unusual or suspicious client activity. This includes New Zealand where a terrorist act has occurred in the last 24 hours,
In New Zealand this law is found in the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the AML/CFT Act). Business communities, such as lawyers, accountants and real estate agents, are required to make effort so that should a client be linked to money laundering or financing of terrorism, their systems have a reasonable probability of detecting it.
The law has been phased in across New Zealand’s finance and business sector from 1 July 2013 with the most recent phase occurring on 1 January 2019.
The beefed-up power of the AML/CFT Act requires businesses to undertake a business risk assessment and measure their risks on the likelihood of their business unwittingly engaging in money laundering (ML) or financing of terrorism (FT).
Once they have ascertained their inherent weaknesses, they must put in place policies, procedures and controls for identifying, managing and reporting client activity that is considered to be unusual or suspicious. The context is in relation to a crime under the Crimes Act.
For the most recent terrorist event in New Zealand that occurred less than 24 hours ago, it will be necessary for law enforcement to act quick in order to determine was the terrorist linked to an organisation with known tendencies of violence, and if so, what size?
Did he have any relationships formed with accountants or lawyers that would assist to understand his cash flows and how he financed such a large stash of automatic weapons?
If he had a firearms licence, was it not known that he was a white supremist? If he held a firearms licence it gets the question ‘How thorough are police checks on persons who are firearms licence holders?’ Do they only visit referees nominated by the licence applicant or do they undertake more extensive enquiries to look at issues that may indicate tendencies to violent behaviour?
If he was accessing his firearms from illegal sources – how, where, who?
Hopefully the Christchurch terrorist falls under the more common description of being a lone wolf, European descent, male, aged mid 20s to mid 30s with a chip on their shoulder about life in general. From what we know of the New Zealand terrorist so far, the description seems to be fairly accurate.
It is noted this act in New Zealand has many similarities to the act carried out in Norway in 2010. Coincidentally, both wrote lengthy research reports about their beliefs of their disturbed minds.
Hopefully we have learnt from the Norway event to prohibit publication of the judicial process that will follow for the terrorist. Because a terrorist act is commonly about glorifying themselves, having international media to film, capture photos and record every piece of the process only adds to what the terrorist considers a success. Giving him publication would obviously also increase the country’s security risk.
So to the business professionals in New Zealand – when you return to your offices on Monday and if you have not yet carried out a business risk assessment – get one done for free.
Get a business risk assessment so you can start to be part of your business community by protecting your community against acts of criminals such as distribution of illegal substances, promoting underage prostitution and terrorism to name a few.
When going about your business and dealing with clients, if you know the risk of your clients and you are managing your risks adequately and effectively, you are on the right path for meeting obligations. If you do not know your client’s risk and your business is subject to the AML/CFT Act, make it a priority to do so.
If you do not know where to start, ask for assistance from an AML consultant or seek a free demonstration of technology that does this for you.