It’s A Waste Of Time!

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’s A Waste Of Time!’

Hands up if you are busy…

While most of us would say we are busy some, if not all, of the time, are we actually busy?

Do you find yourself:

Gossiping and Unnecessarily Chatting
Procrastinating
Watching Bad Movies
Hanging out with toxic people
Unproductively staring into the fridge for 10 minutes or more
People-watching at the mall (I‘ve been told this is interesting)

In the opinion of most, if you do any of these on a regular basis, you are ‘busy’ wasting time.

However, what is NOT a waste of time is becoming compliant with AML regulations.

Let’s look at why…

A few major reasons why being compliant with AML guidelines is NOT a waste of time are:

Consequences

It is a serious crime to let criminals launder money or enable terrorists to find funding. It will increase the risk of New Zealand being a place of illegal activity and therefore a less safe place to live. Who wants that?

The consequences for failing to comply with various obligations under the AML/CFT Act 2009 (the Act) not only affect you personally but also your firm as it is the Reporting Entity. Under the Act, you or your firm may face penalties for any non-compliance.

These range from a formal warning or steps to remedy, to serious criminal proceedings and civil penalties.

The criminal proceedings and civil penalties come into play if you seriously breach the law. For breaches of civil offences, individuals can be fined up to $200,000 and firms can be fined up to $2 million.

Repeated failure to comply with AML/CFT obligations, providing false or misleading information and other criminal offences can result in fines up to $5 million for firms, while individuals can be fined up to $300,000 or sentenced to up to 2 years in prison.

You could also be punished by any professional body you are a member of.

You don’t know who it is going to affect

Don’t just think it is large players who are involved in money laundering.

Sure you hear the reports about organised crime groups, drug dealers, gangs etc. that have been prosecuted for money laundering, like this for example.

But it can also occur unknowingly and unexpectedly.

In our previous article, we mentioned the New Zealand business owner who was convicted for unwittingly laundering drug money.

He thought he knew his business investors but – ALAS! – the funds they invested in the business came from the proceeds of crime.

The first inkling he had that something was wrong was when the police knocked on his door.

Not knowing is not an excuse

‘Not knowing’ is not a defence under the Crimes Act. ‘Being reckless’ about the origin of funds is enough for you to be convicted of money laundering.

The onus is on you to do due diligence that the funds are from a legitimate source.

Money laundering is on the rise

The government may lock down the country due to Covid, and you may also choose to voluntarily lock yourself down. Lockdowns may slow Covid but won’t stop money laundering.

As more people are in front of their computers during lockdowns, the more risk there is of scams and unwitting money laundering.

It’s going to get tougher

The Financial Action Task Force, the global watchdog for money laundering and terrorist financing, has assessed New Zealand and has recommended better supervision of financial institutions, lawyers and accountants’ efforts to detect money laundering.

This only means it’s going to get worse if you don’t comply.

Time spent to be compliant, even if you are legitimately busy is a good use of time.

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