Wednesday, February 28, 2024

Real estate agency issued with money laundering warning

Te Tari Taiwhenua, Department of Internal Affairs (DIA), has issued a formal warning to real estate agent Hills Real Estate Limited (Hills) under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act).

The Department says Hills failed to meet its AML/CFT obligations relating to the establishment, implementation, and maintenance of an AML/CFT programme.

Further, DIA found that Hills failed to conduct ongoing customer due diligence, monitoring and reviews to identify grounds for reporting suspicious activity, as well as failure to keep records in accordance with the requirements of the AML/CFT Act.

Hills are required to take immediate action to rectify all areas of non-compliance and will continue to be closely monitored by DIA officials, the Department said in a statement.

This is DIA’s second formal warning issued to a real estate agent in the last two months.

“When non-compliance is identified, DIA has a range of regulatory tools it can use ranging from educational guidance and formal warnings through to prosecution depending on the scale and severity of the breaches.” says Mike Stone, Director, AML/CFT Group, DIA.

“Real estate agencies should take note of the two recent warnings and expect stronger action in the future from DIA for serious breaches of the AML/CFT Act.”

He said there is evidence that New Zealand real estate is used by criminals to launder large sums of illicit capital. For example, in the financial year ending June 2021, 100 properties totalling NZD 73.7 million were seized by NZ Police, which was an increase from the previous year where 51 properties totalling NZD 55.7 million were seized.

By purchasing property through legitimate processes criminals can hide illegal money and it can enter the market. Real estate agents have a key role to play in stopping this by complying with AML/CFT regulations, Mr Stone said.

“DIA’s AML/CFT Group is committed to ensuring New Zealanders can trust the integrity of the real estate sector by regulating and monitoring compliance of real estate agents under the AML/CFT Act,” he said.

The AML/CFT Act established a system to detect and deter money laundering and the financing of terrorism, and to maintain and enhance New Zealand’s international reputation while growing public confidence in the financial system.

Latest Articles