The Reserve Bank of New Zealand (RBNZ) has filed civil proceedings in the High Court against ASB Bank, alleging breaches of core requirements under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act dating from at least December 2019.
In a statement, the central bank characterized the compliance violations as “serious” and recommended a potential monetary penalty of NZ$6.73 million, or roughly USD$3.9 million. The High Court will ultimately determine the size of any fine imposed on the financial institution, which operates as a subsidiary of Australia’s Commonwealth Bank.
RBNZ said the case relates to ASB’s alleged failures to maintain an adequate AML/CFT program, conduct sufficient ongoing and enhanced customer due diligence, report suspicious activity within required timeframes, and end business relationships when required.
ASB has cooperated with the central bank and admitted liability for all seven causes of action, according to RBNZ, which also noted that it was not accusing the lender of involvement with money laundering or terrorism financing.
Acting Assistant Governor of Financial Stability Angus McGregor characterized the action as a warning to other banks in the country.
“The AML/CFT Act has been in place for well over a decade now and the Reserve Bank expects banks to have the systems and resources in place to be fully compliant with these requirements,” he said in a statement.
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