Staying clean of dirty money

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Something new for advisers to worry about in their newly regulated world is another freshly-minted set of laws they will need to follow to help combat money laundering.

Wednesday, August 17th 2011, 7:38AM

The Financial Markets Authority (FMA) has launched of a series of seminars to educate financial markets participants about money laundering.

It comes in the wake of concerns financial advisers have a medium to high risk of being targeted.

The forerunner to the FMA, the Securities Commission, issued an anti-money laundering Sector Risk Assessment (SRA) back in March highlighting the fact financial advisers could be targeted by money launderers looking to clean dirty money.

A Reserve Bank SRA on the subject also said the role of insurance brokers in particular was considered to pose a major risk of involvement in money laundering and terrorist financing.

"The increased risk stems from the ability of intermediaries to control the arrangement and the sales environment in which they operate," the report said.

"Use of intermediaries may also circumvent some of the due diligence effectiveness by obscuring the source of the funds from third parties."

Another area of concern, highlighted by PricewaterhouseCoopers director of forensic services, Alex Tan, was that while banks and casinos have traditionally been aware of the threats posed by money laundering, the financial advice sector was largely unprepared.

FMA chief executive Sean Hughes said the seminars would introduce businesses and organisations covered by the new Anti-Money Laundering and Countering Financing of Terrorism law, coming into effect on June 30, 2013, to their new obligations and risk assessment and compliance procedures.

"A key message from Australia, where a similar regime is already in place, is that it takes time to develop policies, training and personnel required to meet the requirements," said Hughes.

"Organisations need to get on with this right away."

The nationwide seminars are being run by the FMA, Department of Internal Affairs and the Police Financial Intelligence Unit.

Details of dates and locations can be found here:

http://www.goodreturns.co.nz/diary.html

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