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FREQUENTLY ASKED QUESTIONS

What is Money Laundering?


Money laundering describes the process by which criminals make money obtained from their criminal activities (“dirty”) look legitimate ("clean").
They aim to introduce their "dirty money" into the financial system without detection or arousing suspicion. Once their "dirty money" is in the financial system, it can be transferred between different bank accounts or financial products in New Zealand or abroad, or used to purchase goods and services.
The aim of money laundering is to make this "dirty money" look like it has come from a legitimate source, and therefore difficult to connect the money with its criminal past.




What is Counter Terrorist Financing?


Terrorist Financing is the financial support of terrorists, or those who encourage, plan or engage in terrorism. Terrorist financing may involve funds raised from legitimate sources, such as personal donations and profits from businesses and charitable organizations. It may also be drawn from criminal sources, such as the drug trade, the smuggling of weapons and other goods, fraud, kidnapping or extortion. People who finance terrorism often use similar methods and tools to those used in money laundering.




Are Money Laundering and Terrorist Financing really an issue in New Zealand?


Money laundering is happening every day across the country. It’s estimated about $1.35 billion from fraud and illegal drugs is laundered through legitimate businesses in New Zealand each year. However, the true cost and impact is many times that figure when you factor in all the crimes that generate “dirty” money and the suffering they cause. For example, tax evaders and international criminals try to take advantage of our clean reputation to launder funds through New Zealand businesses. Crimes like fraud and illegal drug dealing take a human toll on victims, their families and the wider community. New Zealand is also exposed to threats relating to financing of terrorism, including the potential for financiers of overseas groups within New Zealand, and overseas based groups who may seek to use New Zealand as a channel for funds. While the frequency of terrorism financing is low, the potential consequences are significant. It is important for businesses to watch for ‘red flags’ that may indicate terrorism financing activity.




When did the new AML/CFT laws take effect?


The Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT Act) was passed in 2009. The Act and regulations came fully into effect on 30 June 2013. From here multiple phases have been rolled out to capture different industries into the scheme, for instance the AML/CFT regime applies to real estate agents from 1st January 2019.




How do criminals Launder Money?


Criminals exploit weak points in the financial network. For example, they target businesses or professions that don’t confirm customers’ identities, or don’t have the right checks and balances in place to detect suspicious activity, activities, behaviour or financial arrangements (the financing of terrorism uses similar techniques). Criminals use different methods to launder the proceeds of their crimes. They may buy and sell assets like property and expensive goods like cars or jewellery, or channel funds through financial structures such as companies or trusts. Money laundering often involves complex series of transactions. By moving funds around different parts of the financial system, they disguise who and where it came from – making their illegally earned ‘dirty’ money appear legitimate or ‘clean.’ Criminals may:

  • try to hide their identity by using companies and trusts to own or buy assets
  • carry out a series of transactions with a bank or business that are below the monetary thresholds that trigger money laundering ‘red flags’
  • buy foreign currency or send money overseas to move it through accounts and financial products, which makes it hard to trace
  • pay cash for a house or car, then sell it and use or bank the money
  • buy gambling chips then redeem them in different currencies or denominations.




What are the repercussions for not meeting the obligations of the AML/CFT Act?


If supervisors have any concerns about a reporting entities’ systems and processes or if Reporting Entities ("REs") don’t comply with the law, they will be expected to fix issues that need attention. REs might be given a warning, which may be made public in some circumstances. There are penalties if REs seriously breach the law. For breaches of civil offences, individuals can be fined up to $200,000 and companies can be fined up to $2 million. Repeated failure to comply with AML/CFT obligations, providing false or misleading information and other criminal offences can result in fines up to $5 million for businesses, while individuals can be fined up to $300,000 or sentenced to up to 2 years in prison.




Where can I learn more about AML/CFT and TICC?


To learn more about TICC and our services, you can visit the TICC website here. To learn more about AML/CFT regulations, you can visit the DIA website here.




How will ATTIC researching AML/CFT Obligations impact the AML industry?


There are many new and emerging entities operating within the AML and CFT sector, and substantial knowledge gaps are being identified. It has become apparent that the lack of research and reliable data creates the risk that the AML/CFT industry is headed in the wrong direction. ATTIC seeks to balance the commercial elements of the business with 'doing the right thing', with a view to utilising research, education and training as valuable tools in driving correct behaviours. By relying on the strength of our research outputs and collaborations’, we will contribute to maximise the extent and significance of our research. In turn, this will help TICC to positively shape local, regional, national and international social and economic development. The research being undertaken by the Institute will inform the training and education activities of ATTIC and assist us in constantly improving our own CDD policies, procedures and controls. By using the research conducted and ATTIC’s real-world experience to inform training and education products and services, we are able to effect change whilst benefiting culture, the economy, society, public policy or services, attitudes, awareness and understanding, beyond academia.




How will the Training & Education branch provide training?


ATTIC will integrate a bespoke learning environment using Appinium products with our existing Salesforce platform. This will allow for a combination of education and training tools to be utilised to extend the level of engagement with existing and potential clients. The ATTIC Research Institute will apply varying methods, including:

  • Podcasts
  • Blogs
  • Videos
  • Webinars
  • Instructor-Led training
  • Gamification
ATTIC wants to support tertiary education facilities, professional industry bodies, AML/CFT reporting entities and regulators in New Zealand to better understand and develop the fields of AML and CFT as this is a fast-paced sector, which TICC is leading in, both nationally and internationally. There are many emerging entities operating within the AML and CFT sector, and substantial knowledge gaps are being identified. It has become apparent that the lack of research and reliable data creates the risk that the AML/CFT industry is headed in the wrong direction. ATTIC seeks to balance the commercial elements of our business with 'doing the right thing', with a view to utilising education and training as valuable tools in driving correct behaviours.




Who are some of ATTIC's research partners?


We are currently establishing relationships with the University of Auckland (UoA) and Uniservices to create a commercial relationship with UoA’s Cyber Security Foundry Laboratory, Data Science, Social Sciences, Criminology and Law Departments. We are also currently establishing a relationship with Massey University's Centre for Defence and Security Studies. For more information on our research, please see our Research page.




Can I submit a partnership proposal to ATTIC?


Absolutely! Please feel free to contact us with any questions at info@attic.nz.




I am a student and I am interested in ATTIC, what does ATTIC have to offer for students?


TICC is dedicated to ensure that contributions to study and learning are available to all students, including those that are completing their studies via distance learning programmes. We will have the potential to collaborate with the partners mentioned above (and others) and bring in new students through the Data Science Programme to TICC. These students will largely have a commercial relationship with TICC and will be able to get research work completed. Additionally, the ATTIC team would be able to attend and hold presentations during monthly forums and give guest lectures with UoA. This gives students an opportunity to gain work and research experience within ATTIC. Furthermore, this allows them to complete their assignments and gain practical experience to be able to graduate, while also maintaining a professional working relationship with TICC beyond this and into the future. Visit Student Opportunities for more information. If you are interested in joining our team, upload your CV here or email us directly at i nfo@attic.nz.





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