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Parliament passes law on money laundering

A bill that boosts measures to counter money laundering by criminal gangs and organised crime, and which counters the financing of terrorism, was passed into law today.

Justice Minister Simon Power said the Anti-Money Laundering and Countering Financing of Terrorism Act will help tackle financial and drug-related crime by assisting Police to detect and trace profits of organised crime groups.

"This Act enhances our ability to investigate organised crime, by following the illegal money trail through financial systems, and goes hand-in-hand with the Criminal Proceeds (Recovery) Act, passed by the Government in April, which can be used to attack criminal profits.

"This is also another weapon in the fight against methamphetamine, in that it will be an impediment to the laundering of money from such activities by the criminal gangs.

"The Act will also ensure that New Zealand's financial sector continues to be attractive to legitimate international investors, and is not seen as a safe haven for organised criminals and tax evaders.

"New Zealand cannot be seen as a weak link for organised criminals and terrorists.

"This Act will allow us to better contribute to the international fight against money laundering, tax evasion, and terrorism financing.

"It implements measures established by the Financial Action Task Force (FATF) - an inter-governmental body that sets international standards for combating money laundering and terrorist financing.

"Most of New Zealand's trading partners are included in the task force, and not implementing its measures puts our reputation and access to international financial markets at risk."

Mr Power said the legislation provided for a lead-in time for financial service providers and casinos to make sure they have measures in place to, for example, check their customers are who they say they are, and systems that can identify and report suspicious activity. 

"As far as possible, the Act enables businesses to focus their resources on those customers or products that represent the most risk," Mr Power said. 

"It recognises that effective control of money laundering requires a collaborative approach between industry and government.

"The Reserve Bank, the Securities Commission, and the Department of Internal Affairs are tasked with supervisory roles and will support the new regime as it is phased in.

"The legislation brings this aspect of our financial sector regulation into line with those countries to whom we might like to compare ourselves, such as Australia."

For more information about Anti-Money Laundering and Countering Financing of Terrorism Act 2009.