The Te Tari Taiwhenua Department of Internal Affairs (DIA) has issued a formal warning to Property Brokers Limited under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act), the first formal warning issued to a realtor under this legislation.
The AML/CFT Act established a system to detect and deter money laundering and terrorism financing and maintain and enhance New Zealand’s international reputation while growing public confidence in the financial system.
The DIA confirmed that Property Brokers, which has over 700 staff and over 80 branches in New Zealand, had failed to meet several of its AML/CFT program commitments on the hiring and training of compliance staff. The realtor also failed to have adequate policies, procedures, and controls for monitoring compliance or follow guidance material from AML/CFT supervisors.
However, the DIA clarified that Property Brokers is not allegedly involved in money laundering or terrorism financing.
“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,” said Mike Stone, the director of the DIA’s AML Group.
“Our inspection of Property Brokers Limited 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.”
The DIA requires Property Brokers to take immediate action to rectify all areas of non-compliance. It will also continue to monitor the realtor closely.
Penalties for continued non-compliance could 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. They could also result in criminal penalties of imprisonment for up to two years, or a fine of up to $300,000, in the case of an individual, and $5 million in the case of a body corporate.