New Zealand Police & ACAMS Conference 2018 Reflections
So we are back from the land of the long white cloud and we have brought you back our picks from the jam packed agenda that was the 2018 NZ Police & ACAMS Anti-Money Laundering and Countering Financing of Terrorism Conference. As proud co-sponsors Murray Waldren Consulting and the ICA joined forces at this years event, sharing our passion for formal qualifications in financial crime, Minties and Tim Tams (see below for a behind the scenes picture of our set up with Andrew Glover of the ICA).
Day 1: Highlights from the first day included hearing from Hennie Verbeek-Kusters, the Chair of the Egmont Group and Head, FIU of the Netherlands. She shared some insights from the recent Plenary in Sydney on the steps the Group are taking to make is safer to to global business. As you would expect there was a strong enforcement representation with presentations from Iain Chapman (Detective Superintendent, National Manger, FCG NZ Police) and Gary Knowles (Superintendent Police Liaison Officer, South and South East Asia, NZ Police). The latter discussed emerging typologies in the Asian region which for majority of the audience, was a place they have yet to visit so the trends and risks shared were no doubt of great value and were reinforced by a later case study presentation on the exploitation of a Malaysian construction workforce by David Yandall and Ian Rudden of the MBIE. From an Australian point of view, the panel discussion on Pacific mischief and cooperation was a real eye opener. The close proximity of NZ to this region made for fascinating accounts from the ever-entertaining Nicholas McTaggart who was joined by an equally engaging Philip Hunkin (Head FIU Cook Islands).
The personal highlight of the day however had to be Sonja Marsic, Senior Executive Lawyer, Australian Government Solicitor. Sonja lead the prosecutions into both TabCorp and the CBA and is also contributing to the current Royal Commission into Banking and Financial Services Misconduct. She shared her perspectives on AUSTRAC’s delicate balance between its FIU and Regulatory functions and the importance of collaboration and trust to make it work. In a theme being played out from the Royal Commission interim report (and reflected in outcomes from the APRA report into CBA) there is great risk in the ‘perfect storm’ scenario where penalties for non compliance are low and profit incentives are high, poor compliance and risk management outcomes will occur. But for those entities that stray, trust and collaboration opportunities can evaporate quickly and this has been seen in the significant penalties handed out by AUSTRAC recently. She also set out the key factors in an AML case that she considers before embarking on an enforcement action. They included:
- What was the nature of the non compliance? (was it systemic or a one off, was it a public interest or issue? isolated or occurring over a number of years?)
- What are the consequences of the non compliance? (was the risk realised?)
- The willingness of the Reporting Entity to comply (who identified the breach, who reported it and when?)
There was more discussion on the importance of oversight (accountability, resourcing and Board engagement) as well as a clear documentary trail/evidence of the work done within an RE. Even if you are a smaller entity without a dedicated function – there is no excuse not to be across your business in this regard.
As if that wasn’t insightful enough, Sonja went on to top 2 tips for Compliance Officers….
- Report up to your senior management and Board regularly (especially your risk assessments and your assurance processes)
- Don’t let information silos develop
There you have it folks – straight from the horses mouth!
Day 2: The supervisors returned to the podium to present a summary from their sector workshops. Representatives from the DIA, FMA and RBNZ were all in attendance. Highlights from each of them included:
- The introduction of phase 2 entities will see an increase in REs from 1-6k with more to come in phase 3 (high value dealers, NZ racing board).
- Some structural changes were made to better resource the AML division especially in the front line and the South Island. A new engagement and innovation group was also introduced along with a service design team to improve the ‘customer’ experience
- They are moving from a regime to systems led team with clearer connections between their activities to outcomes and the broader system (including other regulators). They aim to target high risk areas and minimise harm to the system overall.
- They expect the role of the CO to include setting a culture of compliance and discussed what to look for in an auditor when you are choosing one for your independent review.
- The future for the DIA includes supervision of crypto currency, narrower thematic reviews with multiple entities, 2020 FATF ME and overall upskilling of the team
- The workshops focused on EV, OCDD, TM, Risk assessments and ECDD (particularly SOF and SOW) the latter not being done often or well. Emphasis was placed on ensuring REs listened to guidance being issued and stayed up to date with their alerts, workplaces and testing regimes.
- A great explanation was given with respect to the work undertaken to link culture to the structure of the organisation. See below for a great slide that was presented showing how the RBNZ see us all operating together to protect our financial systems and the cash it moves around!
- Culture was the topic of the day – with a specific culture assessment being incorporated into the overall RBNZ assessment methodology. This addition means that it is possible to have a residual risk profile that is greater than the inherent one… because no matter how good your controls – a negative culture and/or compliance outcome can detract from your score… see below for how RBNZ intend to assess culture. How would your organisation stack up?
- onsite engagement
- consequence management
- senior management priority
- communications and
- responses to audit finding
Lots more interesting discussions on emerging issues and changes such as border threats, digital enabling technologies and New Zealand land ownership amendments. Overall the conference provided some stimulating conversations and we were so thrilled to be invited along as co-sponsors. We had lots of really positive engagement on the ICA qualification front and look forward to launching our first NZ workshops in early 2019. If you wanted to find out any more about any of the speakers from this years event please get in touch here or you can check out our new twitter feed @murraywaldren