A global watchdog for money laundering and terrorist financing has found New Zealand’s police do a good job seizing proceeds of crime and have a robust understanding of money laundering risks.
But it did find several shortcomings in the police’s Financial Intelligence Unit that needed shoring up, saying it could do with better analytical tools, and could benefit from the potential of financial intelligence to detect criminal activity by people not already known to law enforcement.
The Financial Action Task Force, based in Paris, released its Mutual Evaluation of New Zealand in April.
The head of the Financial Intelligence Unit, Detective Inspector Christiaan Barnard, wrote his notes on the report in a document released by the police this month, and praised the Asset Recovery team led by Detective Inspector Craig Hamilton, calling the team world-class.
The FIU and the Asset Recovery Team played a key role in Operation Trojan Shield, which saw 35 people arrested and more than 900 charges laid earlier this week.
The police said across 37 search warrants, $3.7m worth of assets were seized. That included 14 vehicles, two of which were marine vessels, and more than $1m in cash.
The Financial Action Task Force report praised New Zealand’s asset restraint teams.
“New Zealand Police has a strong focus on confiscation of proceeds of crime, backed by a top-level target for the volume of criminal assets to be restrained ($500m by 2021).
“The skilled Asset Recovery Unit (ARU) works in co-operation with investigative authorities to initiate parallel restraint and forfeiture proceedings in response to identified crime and financial intelligence.
“New Zealand has pursued international asset recovery cases that involve significant volumes of inbound and outbound proceeds.”
The report also said New Zealand had a robust understanding of the risks associated with money laundering.
“New Zealand identifies and pursues parallel money laundering investigations alongside investigations of significant proceeds-generating.
“Its authorities are adequately skilled and trained to conduct financial investigations with a wide range of investigative tools available to them.
“Financial investigations are increasingly being used to support prosecution on money laundering charges and the number of prosecutions into money laundering have increased since 2018.”
Detective Inspector Craig Hamilton, the manager of the asset recovery and money laundering teams at the police, would not reveal details of how police restrained assets or unveiled money laundering in relation to Operation Trojan Shield or the related investigations.
However, the Financial Action Task Force report highlighted issues with transparency around the true owners of companies in New Zealand, for instance shell companies and trusts which can be used to launder money.
Hamilton would not discuss the possible use of shell companies or trusts, but he did say that criminals are looking at gaps like those.
“Criminals will look for weakness in any system, and this report is a good opportunity for us to really sit back and look at some of the legislation that sits in around things like company formation and the like, to look and examine if there are weaknesses there that we need to address,” Hamilton said.
“It’s a constantly changing environment. Crime is constantly evolving, new technologies and the like, accessibility to our systems here have never been greater.
“So there’s some work to do, and we’re looking forward to those reviews and trying to harden our environment here for criminals to operate.”
Hamilton said anyone who has spotted suspicious financial activity should come forward and report it.
The Financial Action Task Force has led to four recommendations that are being enacted by the Financial Intelligence Unit.
It said the Unit was lacking analytical tools for all the data it gets, and so New Zealand company, Acumen BI, has been selected to provide a new suite of tools for the Unit to use.
Christiaan Barnard said the tools will improve analysis and expand the reach of financial intelligence within police.
The FIU was also told it could do better to detect criminal activity by people that are not already known to the law.
It is hoped the new tools will help address that.