AML/CFT Sector Risk Assessment 2017

Aim: To:

  • Identify and communicate the money laundering/terrorism financing (ML/TF) risks faced by reporting entities (REs) in the nine sectors supervised by the FMA; and
  • Inform those reporting entities, of the key changes to the risk ratings between the sector risk assessment (SRA) undertaken by the FMA in 2011 and 2017.

Outcome: Completing the module may help REs to:

  • Understand the updated ML/TF risks faced by the sector they belong to;
  • Review and update the individual Risk Assessment with a view to incorporating any new risks identified in the SRA and changes in sector risk ratings; and
  • Review the policies, procedures, and controls to manage and monitor ML/TF risks more effectively.

Abstract: Under section 131 of the AML/CFT Act 2009 (Act), each AML/CFT supervisor is required to assess the level of ML/TF risk across all of the REs it supervises. In 2011, the FMA undertook the first risk assessment of the sectors (SRA) it supervises, based on the limited information at the time. In 2017, the FMA updated the risk assessment taking into account information from the Financial Intelligence Unit’s National Risk Assessment and the SRAs of the other supervisors of the Act – the Reserve Bank of New Zealand and the Department of Internal Affairs. The FMA also considered national and international guidance documentation and typology reports. The SRA 2017 describes the FMA methodology and findings of the risk assessment of the nine sectors it supervises, highlights, for each sector, the changes to the risk rating between 2011, and 2017, and describes the expectations of the REs on using the information contained in the updated SRA.