Battle builds over dirty dollars

Justice Minister Amy Adams says preliminary work considering a second stage of reform is underway. Photo / NZME.

Govt eyeing expansion of anti-laundering rules, including to lawyers and accountants.

Lawyers, accountants and real estate agents could soon be required to comply with more robust anti-money laundering rules, according to Justice Minister Amy Adams.

Adams, addressing the Asia/Pacific Group on Money Laundering meeting in Auckland yesterday, said money laundering was "an insidious crime".

"Criminals and their networks abuse financial systems in order to legitimise the profits and proceeds of their criminal activities," she said.

New rules came into effect in 2013 to try to combat money-laundering that require the likes of financial institutions and casinos to report suspicious transactions and undertake risk-based due-diligence on customers and account monitoring.

A second phase of the law would consider introducing anti-money laundering obligations for people such as lawyers, accountants, conveyancing practitioners, real estate agents and businesses that deal in high-value goods, such as auctioneers and bullion dealers.

Adams told the audience that the Ministry of Justice had begun preliminary policy work considering that second stage of reform but her spokesman could not give an indication of what was to happen next.

Chapman Tripp partner Penny Sheerin said the possible extension of the regime to the likes of lawyers and accountants was well flagged and didn't come as a shock.

While these businesses and professions already have to comply with the Financial Transactions Reporting Act, the possible change would see them subject to "more robust" anti-money laundering obligations, Adams said.

Since the anti-money laundering rules came into force, 1760 financial institutions now regularly reported suspicious activity to authorities, the minister said.

The number of such reports to the police's Financial Intelligence Unit was up threefold to more than 12,000 in the 2013/14 year.

"Suspicious transaction reports are an invaluable tool for law enforcement agencies to 'follow the money trail' in detecting serious crime and reduce the harmful effects of their offending," Adams said.

"As an example, in the period between December, 2013 and May, 2015, suspicious transaction reports contributed to four major police operations in New Zealand that led to 30 people being arrested with over $220 million worth of drugs and assets being seized."

Suspicious activity

• 2012/13: almost 12,000 transactions worth $545 million reported.

• 2013/14: 86,500 transactions worth $3.5 billion reported.

• Dec 13 to May 15: transaction reports contributed to police operations where 30 people were arrested and over $220 million worth of drugs and assets seized.