The National Risk Assessment (NRA) has been updated and released by the Financial Intelligence Unit.

This updated NRA expands on multiple areas of vulnerability and increased risk in the AML/CFT regime in New Zealand.

Some of the key takeaways are: 

• The first risk assessment of Proliferation Financing has been undertaken. A chapter is dedicated to this, giving reporting entities a much clearer overview of what it means for New Zealand and how it could present in day-to-day transactions of a reporting entity.
• A more detailed analysis of the criminal threats to the AML/CFT regime in New Zealand has been performed, with drug trafficking still posing a high threat.
• A discussion on increases in fraud and scams, which is seen in the STRs/SARs table providing an overview of what is being filed by banks. It has been identified that victims of cybercrime, scams, and fraud are sometimes unwitting mules for money laundering.
• New trends are being identified in identity fraud, where victim’s IRD accounts are being used to request false tax refunds, advance false donation rebates, and manipulate returns. Funds are directed to a mule’s bank account for laundering and moving fraud proceeds. The IRD stopped around $230 million in incorrect or fraudulent refunds and tax deductions in 2024, though it is unclear how much of this was related to ML/TF.
• Banking remains the highest risk sector, but sectors such as VASPs are increasing in risk.
• Analysis of vulnerabilities beyond criminal activity – such as lack of information sharing in the banking sector, and the use of criminal proceeds to fund litigation through barristers and solicitors.
• A three stage process for terrorism financing has been detailed in the NRA – Raise, Move, and Use, reflective of the three stages of money laundering.

Case studies feature throughout the NRA, which will help reporting entities in seeing “real life money laundering” and give insights into the red flags most relevant for their sector.

Join us for an online workshop on 29th April, 10am – 11am, to unpack the latest National Risk Assessment and what it means for your AML/CFT compliance. Book your session today!

 

Louise Coad, Senior Consultant, MA, CAMS

Louise originally started her career in IT Managed Services and transitioned into the AML space in 2018. She has worked in other AML consultancy firms in New Zealand, and was a Senior Regulator at the Department of Internal Affairs. In her time in the AML sector, Louise has carried out consultancy for Phase 2 entities, undertaken audits and inspections, training, and written AML/CFT documentation for all types of reporting entities.

Louise undertakes audits, health checks, and development of compliance documentation, looking for pragmatic and clear ways towards compliance that bear the business’s needs in mind. She has a Master of Arts, specialising in Defence and Security, and also holds a CAMS qualification.