Jin Yuan Finance, an Auckland-based foreign exchange trader, will face civil charges under anti-money laundering law in the Auckland High Court.
The FX trader, whose sole director and shareholder is Auckland-based Yuan Yuan, was issued a formal warning by the Department of Internal Affairs over its lack of anti-money laundering processes back in 2015.
At the time, DIA said Jin Yuan had advised it was committed to rectifying its areas of non-compliance, and warned it would continue to monitor the business and take further action if appropriate.
Today, DIA said it has filed the civil proceedings, the third since the Anti-Money Laundering/Countering Financing of Terrorism Act first came into effect in 2013, not because Jin Yuan Finance is alleged to have been involved in money laundering or the financing of terrorism.
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Rather, it alleges that Jin Yuan Finance Limited failed to meet legal requirements involving customer due diligence, account monitoring, record keeping, the reporting of suspicious transactions, and failed to establish, implement and maintain an effective anti-money laundering and counter financing of terrorism programme.
"The department is committed to detecting and deterring potential money laundering and terrorism financing; its role is to ensure certain financial institutions, including money remitters, meet their obligations under the AML/CFT Act," DIA said.
"The obligations require these businesses to have robust processes in place to protect them from misuse. When a financial institution continues to fail in meeting their obligations under the AML/CFT Act the department can and will take action."
Monitoring of businesses' compliance with the act is split between the Reserve Bank, which is responsible for registered banks, life insurers and non-bank deposit takers; the Financial Markets Authority, which supervises issuers of securities, licensed supervisors, fund managers, brokers and custodians, financial advisers, derivatives issuers, DIMS providers and peer-to-peer lending and equity crowd funding service providers; and DIA, which covers casinos, money changers and remitters, and any other reporting entities not covered by the central bank or FMA.