It Wouldn’t Affect Any Of My Clients

By Frank Lieshout | 6 min read

Once again It’s time to talk about those three (some say ‘dirty’) letters.

A, M, L

That’s right – AML – Anti Money Laundering and the regulations that come with it.

In our original article, we mentioned a number of objections we hear about complying with AML obligations and debunked these as myths.

Just call us the AML Myth Busters! Here is what we have addressed in previous articles:

In this article, we look at the objection of ‘It wouldn’t affect any of MY clients.’

What springs to mind when you think of cities in the United States, China, the United Kingdom – you know, the ‘big smokes’ where everything happens?

Endless dining (and drinking) options
Great public transport
Buzzing with energy
Diversity
Entertainment galore
Getting stuck in a lift when you have a fear of heights!

the list can be endless.

What doesn’t necessarily spring to mind is the ‘dark side’ – the serious crimes of

Drug and arms trafficking
Fraud
Robbery
Illegal prostitution and gambling
Bribery
Corruption

These are all happening every day, and money laundering is the process of disguising the origin of profits from these, and other criminal activities.

And it only happens in these cities and not in New Zealand – Yeah right!

According to the Department of Justice, around $1.35 billion is laundered through ordinary New Zealand businesses annually, as a result of those types of crimes.

Let’s think about that number – $1.35 billion. She’s a big one.

$1,350,000,000

That’s enough to buy a whole neighbourhood of the most expensive houses in New Zealand, or in some parts of New Zealand the entire houses in a major town and then still enough change for a superyacht!

So, it is big business.

Here are some reasons why money laundering tends to fly under the radar in New Zealand:

Size matters

While the $1.35 billion is a large figure it is made up of smaller amounts. We are not in the league of some of the largest money laundering countries. For instance, Bernie Madoff’s fraud has been reported to be as much as $65 billion and he had to launder that money somewhere.

You only hear about the big ones

Follows on from size.

Money laundering is not exactly a sexy topic. The general public is not interested in small amounts. So, most cases of your average, run-of-the-mill money laundering don’t get reported in mainstream media.

She’ll be right attitude

The good old Kiwi psyche strikes again. It won’t happen here and if it does who cares.

Stigma of it happening to you

Money Laundering knows no borders, it can happen in towns as well as cities, small businesses as well as large ones.

Where a person’s bank account has been unknowingly used for money laundering, there can be a stigma attached of being thick, or an idiot, for it happening to them.

Therefore, victims want to keep it quiet.

Only the stuff that is found is known about

It can be argued that would be very hard to find all the money laundering that actually occurs.

Technology is constantly changing, and so new technology helps the criminals launder money in ways previously unknown.

Not even aware it has happened

Some money laundering techniques are very simple and quick.

Your clients may not even be aware it has happened. Money can go in and out of their bank account very quickly with the balance of the bank account quickly going back to what the client would be expecting.

Even though you may have known your clients for a long period of time, their circumstances and personality can change.

Some become desperate and so turn to criminal activities.

It may be the people you would lease expect.

New Zealand has a reputation as ‘the easiest country in the world to do business’. Although this is advantageous for doing normal business it unfortunately also means we are an easy target for money laundering.

Even the scapegoat for everything at the moment, Covid-19, is having an impact on money laundering.

People are spending more time on their computers due to working from home or being stuck at home. The more time spent on your computer, the greater the chance you can be subject to an online scam which results in money laundering.

So, despite what you and your clients might think, money laundering is alive and well in New Zealand and you need to be aware of it.

If you haven’t already had your AML Audit completed, get in touch with us.