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Government agencies such as the Reserve Bank and the Securities Commission may take on a greater role in ensuring New Zealand is not being used by terror groups to launder money.
The Government is preparing legislation to ensure this country meets its obligations as a member of the Financial Action Task Force on Money Laundering (FATF).
New Zealand is overdue for an audit by the 34-country group, and Associate Justice Minister Clayton Cosgrove has just returned from the United States after briefings on America's systems to counter money laundering and terror financing.
"My assessment is that we're pretty clean," Mr Cosgrove said. "Of course, with crime there is money laundering in New Zealand, but more of the domestic crime nature. Nobody is pointing at us and saying there is any terrorist activity. I don't believe that there is, but what we have to be mindful of is that you can never say never."
Security officials have raised concerns that banks in Pacific nations could be used by terror groups to shift money around the world, and in 2001 FATF declared Niue, Nauru, the Cook Islands and the Marshall Islands as "non-co-operative" in the global fight against money laundering - a designation that has since been lifted.
"The Asia-Pacific region is looking pretty good, but in saying that you can't say, 'Great, there's no problem, let's move on'. You have to have the systems in place and keep it stable and keep it clean," Mr Cosgrove said.
The Government has consulted local businesses on the issue and new laws are likely to be passed before the FATF audit of New Zealand, expected in 2009.
Mr Cosgrove said his main concern was to ensure businesses were not hit with high added costs as part of ensuring terror money was kept out of New Zealand.
"I believe we can use our existing agencies like the Reserve Bank and the Securities Commission and others, which cuts down compliance and bureaucracy."
Under current law banks are required to prove to the Reserve Bank that they have adequate measures in place to detect money laundering and are obliged to report any suspicious transactions.
New laws would also have to cover transactions through banks, casinos, businesses and firms such as jewellers that might be seen as "soft touches".
