The Reserve Bank of New Zealand - Te Pūtea Matua has today filed a statement of claim in the High Court against TSB Bank Limited for acknowledged breaches of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009.
The claim represents an escalated regulatory response to TSB's non-compliance with aspects of the AML/CFT Act. It is not alleged that TSB was involved in money laundering or the financing of terrorism, Deputy Governor and General Manager of Financial Stability Geoff Bascand says.
TSB has been cooperating with the Reserve Bank in respect of the claim and has acknowledged liability. The Reserve Bank and TSB have filed an agreed statement of facts with the High Court.
As a registered bank, TSB has been a reporting entity under the AML/CFT Act since it came into force on 30 June 2013. In 2016 TSB received a formal warning from the Reserve Bank for failure to comply with the AML/CFT Act. In 2019 the Reserve Bank identified that TSB continued to show inadequate and ineffective compliance with its AML/CFT obligations.
"We are disappointed that TSB did not respond sufficiently to our initial formal warning. We are now obliged to take this High Court procedure," Mr Bascand says.
The Reserve Bank is seeking pecuniary penalties in respect of four categories of non-compliance:
- the absence of adequate and effective procedures, policies and controls for monitoring and managing compliance with its AML/CFT programme;
- the failure to review and maintain TSB's AML/CFT programme;
- the failure to conduct a risk assessment in respect of its realty operations;
- the failure to have regard to certain countries it deals with when reviewing its 2017 risk assessment.
