Quarterly Typology Report First Quarter (Q1) 2014/2015

Aim: Present the first Quarterly Typology Report of 2014/15 produced by the FIU, focussing in particular on ML and TF through the abuse of trusts.

Outcome: At the end of this module the reader will understand how a trust structure can be used for ML and TF, and the typology indicators to watch for.

Abstract: New Zealand is known to have a very high ratio of trusts per capita, reflecting a national predilection for arranging financial affairs using trusts. Trusts can be used to facilitate laundering transactions at all stages of laundering. Trusts are used to obscure beneficial ownership and hinder law enforcement agencies’ and financial institutions’ efforts to detect and track transactions involving criminal proceeds. New Zealand’s foreign trusts are also attractive for money launderers and financiers of terrorism because their use tends to make a transaction appear benign by trading on New Zealand’s reputation. New Zealand and overseas case studies are described to illustrate the use of trusts in money laundering.

[Note: Reference is made in the typology report about the plan to include accountants, and lawyers in the second tranche of the AML/CFT Act reform. The AML/CFT Act 2009 was amended on 10 August 2017 to bring lawyers, and conveyancers into the existing AML/CFT regime from 1 July 2018, accountants from 1 October 2018, real estate agents from 1 January 2019, and high-value goods dealers and the New Zealand racing Board from 1 August 2019.]