August 13, 2022

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New Zealand central bank warns NAB unit on money laundering

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Reserve Bank of New Zealand says bank did not report accurate locations for 50,000 transactions between 2018 and 2020.

New Zealand’s central bank on Friday issued a formal warning to National Australia Bank Ltd’s local unit for failing to report approximately 50,000 transactions as required by anti-money laundering and counterterrorism laws.

The Reserve Bank of New Zealand said NAB’s Bank of New Zealand (BNZ) did not report accurate locations for about 50,000 local and physical cash transactions between November 2018 and April 2020.

However, BNZ promptly rectified the issue and identified the problem as a “technical coding error”, it added.

Under New Zealand’s anti-money laundering and counterterrorism laws, companies are required to report transactions such as international wire transfers to the police’s financial intelligence unit.

BNZ, in a statement, said it had reported the error to the Reserve Bank after becoming aware of the issue in August 2020 and set about fixing it immediately.

“BNZ takes its focus on Anti-Money Laundering and Countering Financing of Terrorism compliance very seriously. We are continuously reviewing our processes and procedures, working with regulators and other authorities, and investing heavily in this area,” it added.

Last year, Westpac Banking Corp’s local unit also received a formal warning for failing to report about 8,000 transactions. New Zealand-owned TSB Bank was fined $3.5 million New Zealand dollars ($2.16m) after the bank accepted it had not complied with the requirements of the Act.

Westpac and Commonwealth Bank of Australia have both received hefty fines in recent years in Australia after admitting to breaches of the regulatory framework put in place following revelations of widespread misconduct.

The Reserve Bank of New Zealand highlighted its formal warning to BNZ as an example to other organisations of their obligation to meet regulations for anti-money laundering and countering the financing of terrorism.

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