Ministry of Justice releases first National AML/CFT Strategy
On Monday 9 December, the Ministry of Justice (Ministry) proactively released a draft of the first National Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Strategy (National Strategy) for New Zealand. The Ministry's media release and the bundle of documents containing the National Strategy can be found online.
Who needs to read it? Why?
The implementation plan sets out a number of ways in which the National Strategy may be used by different people. In particular, it could be used by:
- Those working in AML/CFT or interacting with the system as a customer to:
– support consistency in messaging
– raise public awareness
– strengthen people's connection to the system, and
– build confidence at a system level
- Those working in operational roles to:
– provide a framework for team discussions
– understand and explain how the different roles in the system help and support each other and contribute to achieving the overall goals
– help raise awareness among customers around why there are compliance obligations, and
– communicate the benefits AML/CFT brings
- Those working in strategic or managerial roles to:
– engage with boards or senior executives to explain the reasoning behind the regime
– clarify what parts of the system are not up for debate
– emphasise that engagement in AML/CFT is ongoing with ongoing costs
– support efforts to improve professionalism and build confidence in industries included in the AML/CFT regime
– align AML/CFT system goals to other strategic frameworks, and
– support engagement with New Zealand’s international partners, and
- Those developing or delivering AML/CFT training to:
– develop accessible training resources, and
– provide content for online induction modules
What does it cover?
The bundle of documents released by the Ministry begins with Cabinet documents describing background information such as:
- the impacts of money laundering and the financing of terrorism (ML/FT)
- the New Zealand AML/CFT regime
- New Zealand's involvement in the Financial Action Task Force (FATF), and
- the stages and timeline of the FATF Mutual Evaluation of New Zealand.
The AML/CFT regime impacts a large range of individuals and organisations, and the National Strategy is considered to be an important factor in preventing measures against ML/FT from being disjointed. It is intended to reaffirm the purpose and benefits of the regime, support coordination and cooperation between parties to the regime and guide the prioritisation of their work.
The National Strategy itself consists of a series of interlinked layers, being:
- a vision where “New Zealand communities are free from all forms of money laundering and financing of terrorism and their impacts”
- a strategic aim to “maintain the integrity and stability of the financial system and in doing so contribute to a safe, healthy and prosperous New Zealand and a strong international reputation”
- three goals that tie directly to the purposes of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, being to:
– “detect and deter money laundering and terrorism financing”
– “maintain and enhance New Zealand's global citizenship”
– “provide confidence that our financial system has integrity and is stable”
- four strategic priorities to provide direction and support alignment, being to:
– “understand” by expanding our evidence base, creating reporting processes, learning from the global AML/CFT system and supporting innovation
– “work together” to establish systems, governance, engagement approach and processes and build a capable, informed and engaged workforce at both operational and strategic levels
– “prevent” by reducing the risk of ML/FT becoming embedded in our financial systems and communities and educating to raise awareness of and capability to respond to ML/FT risks and threats
– “respond” by investing in and leveraging cross-sectional capability, efficiently and effectively recovering assets and targeting responsive interventions when ML/FT is detected
- principles to drive a continuous cycle of learning and improvement, being to have a system that is:
– “risk-based and proportional”
– “agile and adaptive”
– “culturally respectful”
– “fair and impartial”
– “globally aware and engaged”
– “well-aligned and connected”
- enablers to help achieve the goals, being the people, systems and tools that our AML/CFT culture is made up of, and
- a high-level implementation plan to bring together both a range of government agencies and the private sector to work towards achieving the goals set out above, including twelve short-term actions for the next twelve months and eight more actions for the following two years that the government agencies have already committed to.
The National Strategy provides a useful insight into what those at the forefront of designing our AML/CFT regime are intending for it to confront and achieve. The associated Cabinet paper makes clear that one of the drivers for publishing the National Strategy is the FATF Mutual Evaluation due in 2020.
If you have any questions on the National Strategy itself, or on the AML/CFT regime more generally, please contact one of our experts.