BNZ Issued Formal Warning Under AML/CFT Act

The Reserve Bank of New Zealand – Te Pūtea Matua is reminding reporting entities of their AML/CFT reporting obligations following the issuance of a formal warning to the Bank of New Zealand (BNZ).

BNZ was issued a formal warning under section 80 of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009 for failing to report the correct location for around 50,000 domestic physical cash transactions in prescribed transaction reports (PTRs) between November 2018 and April 2020.

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). Upon being alerted to the error in its reporting, BNZ promptly remediated the matter, and has fully cooperated with the Reserve Bank during the investigation.

This matter highlights the importance of reporting entities testing their AML/CFT compliance systems, Deputy Governor Christian Hawkesby says.

“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,” Mr Hawkesby says.

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. We note that BNZ self-reported this issue to us, and has worked hard to remediate the issue and provide the FIU with the corrected information. BNZ’s ongoing cooperation is appreciated,” Mr Hawkesby says.

More information

• RBNZ strengthening enforcement framework, May 2022
• Enforcement Principles and Criteria Guidelines (PDF 1MB)

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