01 Mar 2021
A national 80-branch real estate agency Property Brokers got the first formal warning in the real estate sector for not complying with anti-money laundering law but the chain’s chairman Tim Mordaunt said the state only was trying to make an example of them.
Te Tari Taiwhenua Department of Internal Affairs issued a formal warning to the successful chain with 300 staff. No fines were imposed.
“This is the first formal warning issued to a real estate agent under this legislation,” the department said of the agency’s non-compliance with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.
Tim Mordaunt, Property Brokers’ chairman, said today: ” I think they are making an example of us because it’s quite new legislation. We felt we were being very compliant but it’s only been two years since it came in. We’re all learning. We felt we were being very efficient.”
Asked if staff at any particular office or area of New Zealand failed to comply or if it was more national, Mordaunt said: “No. They look at your processes. Accountants, solicitors and real estate agents – everyone is trying to get up to speed. It’s quite simple for an individual like yourself, but when you’ve got a company or a trust, it’s far more detailed and difficult to get the information you require. They’re just looking at our processes and saying there are some aspects we could improve.”
Training was one focus for Property Brokers to ensure legal compliance, Mordant said of the business with residential, rural and commercial property activities.
Internal Affairs said: “Property Brokers Limited have failed to meet several of their AML/CFT obligations relating to the establishment, implementation and maintenance of their AML/CFT programme and the hiring and training of compliance staff. They also failed to have adequate policies, procedures and controls for monitoring compliance or to follow guidance material from AML/CFT supervisors.
“They are not alleged to be involved in money laundering or the financing of terrorism.”
Mike Stone, Internal Affairs’ anti-money laundering group director said: “Real estate is a high-value asset often used domestically and internationally to launder and invest criminal proceeds. Businesses have an obligation to have robust processes in place to protect them from misuse.
“Our inspection of Property Brokers highlighted concerns and we have a responsibility to act on these concerns. New Zealanders need to have confidence and trust in the integrity of the New Zealand financial system,” Stone said.
The chain must take immediate action to rectify all non-compliance areas and the department will continue to closely monitor it.
“Penalties for continued non-compliance can result in civil penalties of up to $200,000 in the case of an individual and $2 million, in the case of a body corporate and criminal penalties of imprisonment for up to two years or a fine of up to $300,000, in the case of an individual and $5m in the case of a body corporate,” Internal Affairs said.
By Anne Gibson, The New Zealand Herald, 28 February 2021
Read more at The New Zealand Herald
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