Government to crack down on money laundering

Measures to track and trace large money transactions may be on the cards. Photo / Thinkstock

The Government wants to keep tabs on large money transfers, monitor all money heading offshore and review privacy laws to help cripple gangs.

The strategies are part of an all-of-government approach, released yesterday, outlined in a Ministry of Justice report called Strengthening New Zealand's Resistance to Organised Crime.

Gangs are involved in activities that impact on communities, including the sale of illegal drugs, cyber crimes and burglary.

The National Drug Intelligence Bureau estimates the sale of illegal drugs to be worth between $1.4 billion and $2.2 billion each year.

Among measures to be implemented over the next three years is an increase in domestic and international information sharing, and a review of privacy and serious fraud legislation.

Tracking and tracing large money transactions is also on the cards.

"Significant patterns of transactions, which individual financial institutions do not see, can go undetected," the report said.

"New Zealand, like many countries, has a low level of prosecutions for money laundering, particularly in respect of third party money launderers and leaders of criminal organisations."

The Government wants to monitor international and domestic "high-risk money trails".

Detective Superintendent Pete Devoy, head of the police financial crime group, said there were a number of indicators.

"You might have a large amount coming in, and then quickly moving that large amount. You might see that large amount split up and then moved into several accounts for no apparent business reason, or moved offshore.

"Cash is an indicator, and the frequency and volume and patterns of account use."

He said money-laundering overseas was a "huge industry" and monitoring needed to keep pace.

Investigations were prompted by a report of suspicious financial activity. At present, the law requires casinos and financial institutions to report anything suspicious, but the Government wants to extend this to all sectors susceptible to money laundering.

Mr Devoy said this could include trust accounts or "anyone who possibly handles large amounts of money - even car dealers".

"This is yet to be decided."

There was no threshold that would necessarily raise a red flag, he said.

Police wanted to establish a national transactions database which monitors all transactions going offshore, he said.

Police Minister Judith Collins said gangs were increasingly turning to cyber-crime and financial crimes, such as money laundering, identity theft, fraud, and tax evasion.

The Government response will be implemented over three years and reviewed annually.

A report back to Cabinet is proposed for August next year, with bills being introduced after that.