The Reserve Bank has issued a formal warning to Westpac New Zealand for non-compliance with anti-money laundering regulations.
File photo.
Photo: 123rf
The central bank said that Westpac’s internal systems failed to recognize and report to foreign recipients nearly 8,000 corporate transactions between July 2018 and February 2019.
The law requires financial service providers to report all foreign transactions worth more than $ 1,000 to the police and the Reserve Bank.
Reserve Bank Deputy Governor Geoff Bascand said the formal warning reflected the importance of the reporting system in building an intelligence picture about New Zealand’s financial system and reiterated the seriousness with which it is anti-money laundering and anti-funding non-compliance of terrorism see law.
There is no evidence that Westpac was involved in any money laundering activity.
A Westpac spokesman said the problem had been reported to the RBNZ and the situation was taken very seriously.
“This problem was caused by an accidental bug in our reporting system that has now been fixed,” said the spokesman.
This is not the first time the Reserve Bank has disciplined Westpac for violating banking rules.
In March, she was instructed to commission two independent appraisals over liquidity compliance concerns.
In 2017, Westpac was instructed to increase its capital amount and conduct an independent review of the models it uses to assess risk.
The Reserve Bank’s warning to Westpac came when it released its results from a survey of all registered banks in the country for transaction reporting and monitoring.
It all turned out to have adequate processes and controls in place.
Westpac New Zealand was assessed separately and, despite failing to disclose the mandatory transactions, showed that it had satisfactory procedures in place.
The Reserve Bank said the survey found that the effectiveness of these anti-money laundering measures could not be determined by survey alone and would now cover this as part of their on-site inspections.
