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New Zealand Country Summary

80.03 Country Rating /100
View full Ratings Table
Sanctions

No

FATF AML Deficient List

No

Terrorism
Corruption
US State ML Assessment
Criminal Markets (GI Index)
EU Tax Blacklist
Offshore Finance Center

Background Information


Anti Money Laundering

FATF Status

New Zealand is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in New Zealand was undertaken in 2022. According to that Evaluation, New Zealand was deemed Compliant for 8 and Largely Compliant for 21 of the FATF 40 Recommendations. It was deemed Highly effective for 2 and Substantially Effective for 4 of the Effectiveness  & Technical Compliance ratings.

2013 Asia Pacific Group on Money Laundering Yearly Typologies Report – Trends

The existing banking and financial environment remains the main conduit for ML, in line with jurisdictions all over the world.

The use of shell companies has been a particular issue for New Zealand over the last 1-2 years and remains an area of concern. However, efforts are underway to strengthen legislation and tighten processes and procedures around the formation of shell companies to ensure criminal abuse of New Zealand companies is greatly reduced.

US Department of State Money Laundering assessment (INCSR)

New Zealand was deemed a ‘Monitored@ Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -

New Zealand is not a major regional or offshore financial center. Money laundering cases are infrequent in New Zealand.  However, authorities note it is difficult to estimate the extent of money laundering activities, since every serious crime that generates proceeds could lead to a money laundering offense.

Money laundering generally occurs through the financial system, but the purchase of real estate and other high-value assets as well as the use of foreign exchange dealers have become increasingly popular methods of laundering money. Narcotics proceeds (mostly from methamphetamine and cannabis sales) and fraud-associated activity (primarily internet banking fraud) are the primary sources of illicit funds. International organized criminal elements, mostly from Asia, are known to operate in New Zealand, but not to a wide extent.  Local gangs represent a disproportionate number of homicides and drug offenses, and have been implicated in money laundering cases.  New Zealand is a low threat environment for terrorist finance.

New Zealand has a small number of casinos, which operate gaming machines and a variety of table games.

Sanctions

There are no international sanctions currently in force against this country.

Bribery & Corruption

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           85

World Governance Indicator – Control of Corruption             99

The risk of corruption for businesses in New Zealand is minimal. The country routinely finds itself among the least corrupt countries in the world, according to all major ranking institutions and indexes. Transparent institutions and rigorous law enforcement effectively curtail corruption. The regulatory environment is favorable for businesses, and acquiring licenses or public services often takes only one day. Active and passive bribery in the private and public sector are prohibited by the Crimes Act and the Secret Commissions Act. Penalties range between fines of NZD 2,000 and 14 years of imprisonment. Public officials may not ask for or accept gifts according to the State Services Commission Code of Conduct. Facilitation payments are illegal, except for a narrow exception for foreign public officials.  For further information - GAN Integrity Business Anti-Corruption Portal

Economy

The New Zealand economy has bounced back strongly following the Covid pandemic. Loosened mobility restrictions in April 2022 saw a surge of economic activity and cross-border movements. Positive economic indicators followed. Unemployment hit a multi-decade low of 3.4 percent while GDP expanded by 3.4 percent. However, hints that the economy had begun to overheat became more pronounced with inflation soaring to 7.3 percent in the year to December 2022, well outside the Reserve Bank’s target band of 1-3 percent, resulting in a steady tightening of interest rates that are meant to achieve an engineered recession.

New Zealand has an international reputation for an open and transparent economy where businesses and investor can make commercial transactions with ease. As a small country that relies on trade and the rule of international law, major political parties are committed to facilitating investments that are productive, sustainable, and inclusive. While a broad range of investments in various sectors are welcomed, the New Zealand government is prioritizing investments that target opportunities in decarbonization, particularly in the public transport sector, as well as waste and plastics.

In February 2023, New Zealand was granted excepted foreign state investor status from the United States, following the United States granting New Zealand provisional status in January 2022. The formal excepted status will deepen trade ties and make it easier for New Zealand investors to invest in the United States.

In August 2022, the government announced the Research and Development Tax Incentive, which supports businesses that undertake research and development activity in excess of $650 million in New Zealand. Businesses undertaking eligible activities that aim to advance an innovative and sustainable economy will be provided a 15 percent tax credit.

With minimal direct trade exposure to Russia and Ukraine, New Zealand has felt the impact of Russia’s war of aggression through derivative means. Higher energy prices have weighed on real incomes, and exporters anticipate reduced demand from major trading partners that have larger trade exposures. The disruption of commodities key to production in New Zealand, such as fertilizer and wheat (along with crude oil and natural gas) have contributed to supply disruptions and inflation.

Country Links

New Zealand Police Financial Intelligence Unit (NZ-Police FIU)

Financial Markets Authority (New Zealand)

Reserve Bank of New Zealand

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