Warning over AML/CFT obligations
08 Feb 2017
NOTE The AML/CFT legislation was introduced three years ago and at the time IBANZ circulated details on how it applied to insurance brokers:
- FMA Media release - Wednesday 8 February 2017
As we highlighted in our latest AML/CFT monitoring report, the FMA is adopting a stronger position where it sees a failure by reporting entities (REs) to meet their AML/CFT obligations.
All REs must obtain an independent AML/CFT audit every two years. This must be provided to your supervisor on request.
As part of our monitoring last year, we requested a large number of REs to submit a copy of their independent AML/CFT audit report, which some failed to do. Nine REs breached their obligations to carry out an independent AML/CFT audit and two REs failed to comply with the request to submit their audit report. These are serious breaches of sections 59(2) and 59(7) of the AML/CFT Act.
One further warning was issued for failure to submit an annual AML/CFT report as per section 60(3) of the AML/CFT Act.
As a result, we have issued 12 formal warnings to various types of companies and individuals for failure to comply with our request.
While we have not published the names of the 12 companies and individuals, most of these REs took steps to comply promptly and provided us with their report in a specified timeframe.
We consider this a timely reminder that where REs fail to meet their obligations, the FMA will take action.
The legal obligations on REs under the Act have been in place now for three years; therefore failure to have your AML/CFT affairs in order is not acceptable.
In addition to formal warnings we do have powers to impose other sanctions, imprisonment and/or fines of up to $300,000 for individuals and $5 million for companies.
We strongly encourage REs to review their AML/CFT obligations and refer to the guidance and other information available on our website to ensure full compliance.
Useful guidelines and information
• Getting the best outcome from your AML/CFT audit guide
• Guideline for audits of risk assessments and AML/CFT programmes
• FMA's AML/CFT monitoring reports
• Guide for small financial advisers businesses
If you have any questions, please contact us at email@example.com for general AML/CFT queries. For any specific legal enquiries please consult your legal adviser.
Financial Markets Authority
Level 5, Ernst & Young Building
2 Takutai Square