WELLINGTON Dec 13 The New Zealand government
rejected on Tuesday a proposal for industries to police new
money-laundering rules themselves, and will instead leave one
government department in charge of supervising thousands more
The Department of Internal Affairs (DIA) would scrutinise
the new professions covered by the rules, including lawyers,
real estate agents, accountants and car dealers, according to a
proposal released by the Ministry of Justice on Tuesday.
The new rules will be introduced next year.
The government has come under pressure to tackle money
laundering since the release in April of the Panama Papers,
which showed how offshore companies often use New Zealand trusts
as a way to create a secretive un-taxed vehicle in the South
The Ministry of Justice said "self-regulating bodies" had no
experience in tackling money-laundering and the financing of
"Having multiple agency supervision by self-regulatory
bodies isn't considered appropriate in New Zealand," the
Money-laundering experts had called for a dedicated
supervisory body similar to Australia's Austrac to streamline
operations for New Zealand's limited number of compliance
experts and ensure consistency in applying the rules.
Professional industry groups for the law and real estate
sectors had asked to be allowed to enforce the rules, but
experts said that could lead to watered down compliance.
Though the Financial Markets Authority and the Reserve Bank
would still oversee banks and some financial institutions, the
majority of businesses covered by money-laundering rules would
be supervised by one agency.
"Overall this will be positive for the
(anti-money-laundering) industry because the concentration of
supervision means a more cohesive direction," said Claire Piper,
director of compliance company Fiducia.
"A disadvantage could be the Department of Internal Affairs'
lack of expertise in some of the niche industries they will be
working with. The legal industry in particular is concerned that
the DIA will not understand the intricacies."
The government will introduce a bill in Parliament to update
the rules in the new year and expects it to pass mid-2017.
Lawyers will then have six months to comply, while
accountants and real estate agents will get 12 months and 18
Former Prime Minister John Key promised in May to speed up
the extension of anti-money laundering rules, which now only
cover financial institutions and casinos.
The change will bring New Zealand into line with standards
already in force in countries such as Canada and Britain.
(Reporting by Charlotte Greenfield; Editing by Robert Birsel)