Entities urged to test their AML/CFT compliance systems
The Reserve Bank of New Zealand has issued a formal warning to Bank of New Zealand (BNZ) after it failed to report the location for thousands of cash transactions between November 2018 and April 2020.
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The warning was released under section 80 of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009 for BNZ’s failure to report the correct location for around 50,000 domestic physical cash transactions in prescribed transaction reports (PTRs).
BNZ said a technical coding error led to the bank providing incorrect location information for these transactions to the Police Financial Intelligence Unit (FIU). Once alerted of the reporting error, BNZ self-reported the issue to RBNZ, and has fully cooperated with the central bank during the investigation.
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“We appreciate that design errors can occur,” RBNZ Deputy Governor Christian Hawkesby said. “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.”
RBNZ applied its recently issued Enforcement Principles and Criteria Guidelines to determine its enforcement response for this matter. The guidelines can be accessed on the RBNZ website.
“The PTR regime is important for building an intelligence picture across New Zealand’s financial system,” Hawkesby said. “Unfortunately, these coding errors compromised the quality of the information held by the FIU.”
