Kiwibank has received a formal warning from the Reserve Bank of New Zealand (RBNZ), relating to failure to meet some of the requirements of the Anti-Money Laundering/Countering Financing of Terrorism Act which came into effect in 2013.
The RBNZ found that during the period June 2013 to June 2014, Kiwibank did not always have fully compliant procedures in relation to Customer Due Diligence requirements of the Act.
- Requirements for some existing customers to “top up” their identification details (new or additional information) to the required standard
- Performing of certain checks for customers considered high risk persons
- Verification of the source of funds for certain high risk customers
- The collecting of address information for customers who might conduct occasional transactions in a Kiwibank branch
Kiwibank accepts that it did not meet some of the requirements during the period and has taken steps to remedy the issues identified. It has comprehensive compliance programmes in place and is committed to ensure its AML programme operates effectively to prevent any attempted laundering of money.
The following is the notification from the Reserve Bank:
Enforcement action under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act)
The Reserve Bank of New Zealand (RBNZ) has today issued a formal warning to Kiwibank Limited (Kiwibank) under section 80 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act). As the supervisor of banks for compliance with their Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) obligations, the RBNZ has reasonable grounds to believe that for various periods of time between 30 June 2013 and June 2014, Kiwibank did not fully meet all the requirements in respect to the following customer due diligence (CDD) obligations under the Act:
- did not always conduct CDD on the beneficial owner of a new customer and any person acting on behalf of a new customer (as required under sections 14(a) and 11(1)(b) and (c));
- did not collect addresses of customers performing occasional transactions (as required under section 15(d));
- did not always conduct screening of politically exposed persons (as required under section 26);
- did not always take reasonable steps to verify information relating to the source of funds or the wealth of the customer (as required under section 24(1)(b)); and
- did not consider terminating customers’ accounts in response to its ongoing non-compliance with section 24(1)(b) (as required under section 37).
As a result Kiwibank’s AML/CFT programme did not, during the specified period, fully include adequate and effective procedures, policies, and controls for complying with its CDD requirements as required by section 57(c).
The RBNZ notes that since June 2014, Kiwibank has taken remedial action to address these matters.
For further information: Bruce Thompson, Communications Manager (04) 460 6831