Last week, the online trading market iPredict announced it would be closing New Zealand operations. The reason? iPredict say that the cost of complying with New Zealand’s AML requirements is too high.
The statement on iPredict’s website said that the Associate Justice Minister, Simon Bridges, refused to grant it an exception to the AML/CFT Act because it was “a legitimate money laundering risk” because of the lack of customer due diligence procedures. This is a platform that had an average withdrawal of $41 per user, with comprehensive caps and conditions on withdrawals. If this is a legitimate money laundering risk, what commercial activity in New Zealand isn’t?
When we consider, as one example, that billions of dollars moves through the New Zealand real estate market every year and there is no requirement on real estate agents to disclose anything to the Police, we can start to see that the Government might need to revisit its own risk assessment.
The AML/CFT Act asks reporting entities to take a proactive and considered approach to determining who and what constitutes a money laundering risk in their business. The AML regime in New Zealand is at pains to make this exercise an active discretionary one. The Governments move here to throw the letter of the law at iPredict is at odds with their requirements of industry.