by Matthew Martin
However, the RBNZ is not alledging the TSB has been involved in money laundering or the financing of terrorism, and the claim represents an escalated regulatory response to TSB’s non-compliance with aspects of the Act.
RBNZ deputy governor and general manager of financial stability, Geoff Bascand says the TSB has been cooperating with the Reserve Bank in respect of the claim and has acknowledged liability.
The Reserve Bank and TSB have filed an agreed statement of facts with the High Court.
As a registered bank, TSB has been a reporting entity under the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT) since it came into force on June 30, 2013.
In 2016 TSB received a formal warning from the Reserve Bank for failure to comply with the AML/CFT Act, and in 2019 the Reserve Bank identified that TSB continued to show inadequate and ineffective compliance with its AML/CFT obligations.
“We are disappointed that TSB did not respond sufficiently to our initial formal warning. We are now obliged to take this High Court procedure,” Bascand says.
The Reserve Bank is seeking pecuniary penalties in respect to four categories of non-compliance:
- the absence of adequate and effective procedures, policies and controls for monitoring and managing compliance with its AML/CFT programme.
- the failure to review and maintain TSB’s AML/CFT programme.
- the failure to conduct a risk assessment in respect of its realty operations.
- the failure to have regard to certain countries it deals with when reviewing its 2017 risk assessment.
As this matter is now before the High Court, the Reserve Bank will not be making any further comment until court proceedings have ended.
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