ASB and BNZ named in international investigation into leakage of money laundering documents

Two New Zealand banks have been named in an international investigation into global money laundering and banks around the world.

ASB and BNZ have been named for their involvement in the processing of transactions worth US $ 1.8 million identified as suspicious.

In response, ASB said it was committed to fighting money laundering and reporting suspicious transactions. The BNZ said it had re-reviewed the transactions in question, made between 2011 and 2013, and had not identified any concerns with the way they were being handled at the time.

Buzzfeed released the news on Sunday of its investigation into the FinCEN documents: more than 2,100 files pointing to reports of suspicious activity between 1999 and 2017 involving more than $ 2 trillion in transactions.

The Financial Crimes Enforcement Network, or FinCEN, is the agency within the United States Department of the Treasury charged with combating money laundering, terrorist financing, and other financial crimes.

Collects millions of these suspicious activity reports, known as SARs. It makes them available to law enforcement agencies in the United States and the financial intelligence operations of other nations.

But according to Buzzfeed, it does little to force banks to shut down money laundering.

The files have also been shared with the International Consortium of Investigative Journalists and more than 100 news organizations in 88 countries.

The Herald has not seen the original files, but the data on the ICIJ website is broken down by country.

It shows that US $ 196,499 was sent from ANZ to ASB in two transactions on July 27, 2016 and ASB also received US $ 1,540,000 from China Merchants Bank in five transactions on June 14, 2013 and June 26, 2013.

In a statement, ASB Chief Risk Officer Carl Ferguson said he was responsible for reporting suspicious transactions to the New Zealand Police’s Financial Intelligence Unit under the Anti-Money Laundering and Terrorist Financing Act. from 2009.

“The police then communicate with their counterparts in other jurisdictions, as needed.”

Ferguson said that ASB had modern and effective systems to monitor and report activities that are potentially illegal.

“We are committed to playing our role in combating this activity and reducing money laundering both in New Zealand and globally, and we take our reporting obligations very seriously. If we consider a customer’s transactions or behavior to be suspicious We report this to the police and in some cases we will exit customers when it is clear that their transaction behavior is inappropriate or violates our obligations. “

Another $ 78,312 was moved from the Bank of New Zealand in four transactions on November 14, 2011 and January 9, 2013, to Taiwan’s E Sun Bank through British bank Standard Chartered Plc, according to the ICIJ.

A BNZ spokesperson said it had reviewed these transactions between 2011 and 2013 again and had not identified any concerns regarding its processes and how these transactions were being managed at the time.

“As a highly regulated bank, we must be extremely vigilant on all matters related to money laundering, sanctions, and terrorist financing.

“We constantly review and strengthen our controls to manage an ever-changing regulatory and operational environment.”

The Herald also requested comment from the banking regulator, the Reserve Bank.

ICIJ said it was publishing some of the data in the public interest.

“While the transactions do not necessarily establish criminal misconduct or other crime, the data provides an unprecedented overview of how money, flagged as suspicious and, in some cases, linked to corruption, fraud, penalty evasion or other crime flows around the world through correspondent banking networks, “he said.

Criminals use money laundering to disguise the illegal origin of their money.

New Zealand introduced the Anti-Money Laundering and Terrorism Financing Act of 2009 in 2011 and it came into full force on June 20, 2013.

It imposes obligations on New Zealand’s high-value financial institutions, casinos, virtual asset service providers, accountants, lawyers, transmitters and distributors to detect and deter money laundering and terrorist financing.

The Act is designed to ensure that companies take adequate measures to protect themselves against money laundering and terrorist financing.