Money laundering agencies merger suggested

MPs have been told that millions of dollars of criminal proceeds were laundered through New Zealand last year, including $120 million which was transferred from Australia to Vanuatu via New Zealand.

Consideration should be given to merging anti-money laundering agencies, a parliamentary committee said today.

The foreign affairs select committee said Australia had one agency - the Australian Transactions Reports and Analysis Centre (AUSTRAC)- to combat money laundering and financing terrorism.

In comparison New Zealand had four entities, the Reserve Bank, Securities Commission, Internal Affairs and the police, which was "administratively untidy".

"Consideration should be given to consolidating supervision arrangements in one body which has a close relationship with AUSTRAC," the committee said.

The recommendation comes in a report on the Anti-Money Laundering and Countering Financing of Terrorism Bill.

The bill sets out to bring New Zealand into line with international standards in areas such as customer due diligence, record keeping standards and the supervision of suspected money laundering and terrorism financing.

The committee said as Australia and New Zealand moved toward a single market it made sense to provide for the exchange of intelligence between agencies in both countries.

"The Government might consider evaluating the possible benefits that would accrue from adopting a national transaction database, similar to that supporting the Australian regulatory environment."

The bill brings in new rules covering identification of customers and records kept on cross-border and domestic wire transfers.

Because of the complexity and the need for detailed regulations the committee said the new law should be phased in over two years.

During the hearing process banks described the original legislation as archaic and responding to old threats at a cost of $350 million a year to the sector.

MPs were also told that millions of dollars of criminal proceeds were laundered through New Zealand last year, including $120 million which was transferred from Australia to Vanuatu via New Zealand.

Banks and others dealing with large amounts of money such as casinos said they already had systems in place to deal with risky or suspicious activity.

The committee said in its report it had moved to a more risk-based system.

- NZPA