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The National Risk Assessment 2024 on Money Laundering, Terrorism Financing and Proliferation Financing was published by the New Zealand Police Financial Intelligence Unit (FIU) on 17 March 2025.
AML/CFT supervisors will expect reporting entities to read the report and consider the implications for their AML/CFT risk assessment and compliance programme.
Specific considerations
When reviewing the NRA, reporting entities should consider:
- the FIU’s threat assessment of money laundering (ML) and terrorism financing (TF) risk in New Zealand. In particular, FIU highlighted the increasing volumes and values of fraud related crimes due to new technologies. Recent crime surveys suggest one in ten New Zealanders has been the victim of a fraud or scam
- the FIU’s assessment of proliferation financing (PF) risk in New Zealand. This has been added to the NRA based on international expectations from the Financial Action Task Force and the United Nations. PF risk refers to the raising and moving of funds to finance the development of weapons of mass destruction by non-state actors as well as the Democratic People’s Republic of Korea and the Islamic Republic of Iran
- the sectoral vulnerability assessment applicable to the reporting entity. Virtual Asset Service Providers (VASPs) have now been placed as a high-risk sector alongside banks and money or value transfer service (MVTS) providers
- the FIU’s assessment of the risks associated with legal persons and legal arrangements. The FIU acknowledges the wide use and essential role of legal structures in commercial activities across New Zealand but notes that there are associated vulnerabilities.
There have been some shifts and some continuities since the previous NRA was published in 2019. The NRA includes a helpful summary of the key changes, highlighting:
- the increasing risks, including the growth of fraud related crimes and the increasing use of virtual assets in both fraud and drug related crimes
- the unchanged risks; banking is still the most vulnerable sector, with the MVTS remaining high-risk and real estate, law firms, accountancy firms and high-value dealers continuing to feature in criminal investigations
- decreasing risk of non-compliance associated with New Zealand’s tax system (albeit tax fraud remaining high threat), and with physical presence casinos (likely due to enforcement action and improved compliance). Trust and company service providers were also recognised as having lowered risks although the FIU warns that the sector remains vulnerable as criminals continue to use legal structures to conceal beneficial ownership of illicit wealth.
Comment and next steps
The Act requires reporting entities to “have regard to” any applicable guidance material when assessing the ML/TF risks they face, so entities should consider whether the new NRA requires any updates to their risk assessment (and consequently, their compliance programme).
It is an important discipline to practice as the obligation will be strengthened from “have regard to” to act “in accordance with” when the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill is enacted.
As we observed when the Bill was introduced in December, the enhanced requirement could have the effect that guidance will become a mechanism for imposing further obligations, when that is more appropriately left to legislation and regulation.
AML reporting entities should also be reviewing their risk assessment and compliance programme for the remaining AML/CFT regulatory changes from 2023, which are due to come into force on 1 June 2025. This includes the new requirement to risk-rate new customers when conducting customer due diligence.
If you have any questions, please get in touch. Our experts can help you review and update your AML/CFT risk assessment and compliance programme for the NRA and the upcoming law changes.
