BNZ warned over an AML/CFT reporting issue
The Bank of New Zealand has been issued a formal warning by the Reserve Bank of New Zealand because of anti-money laundering reporting failures.
RBNZ alleges that BNZ failed to report the correct location for around 50,000 domestic physical cash transactions in prescribed transaction reports (PTRs) between November 2018 and April 2020.
It says BNZ identified the cause of the failure to be a technical coding error, which led to it providing incorrect location information for these transactions to the Police Financial Intelligence Unit (FIU).
On being alerted to the error in its reporting, BNZ promptly remediated the matter and has fully cooperated with the RBNZ during the investigation.
RBNZ Deputy Governor Christian Hawkesby says this matter highlights the importance of reporting entities testing their compliance systems with the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009.
“We appreciate that design errors can occur. This reiterates the importance of reporting entities regularly testing and validating the coding for AML/CFT systems to ensure they are correctly designed and implemented,” says Hawkesby.
“In determining our enforcement response for this matter, we applied our recently issued Enforcement Principles and Criteria Guidelines, which are available on our website.
“The PTR regime is important for building an intelligence picture across New Zealand’s financial system. Unfortunately, these coding errors compromised the quality of the information held by the FIU."