30 Apr, 2021 07:00 AM
Nearly $1m seized from a senior Head Hunter gang member involved in drug manufacture. The cash was hidden inside his bed. Photo / Supplied
An international evaluation of New Zealand’s ability to prevent and investigate money laundering says company and trust structures are a major vulnerability, but ranks the police efforts to seize suspected criminal wealth as among the best in the world.
The New Zealand police force is among the world’s best at seizing criminal profits but needs more sophisticated technology to analyse financial transactions and find new targets to investigate, according to an international report on
Yesterday, the Herald revealed that more than $1 billion in alleged criminal wealth has been frozen in New Zealand since a powerful law targeting organised crime came into effect just over a decade ago.
Expensive real estate, luxury cars and cash are among the assets restrained from drug dealers, gangs and other criminal groups since the Criminal Proceeds (Recovery) Act was passed into legislation in late 2009.
The new data was obtained under the Official Information Act and illustrates the force of the powers that were handed to the police amid concerns that prominent criminals were enjoying lavish lifestyles.
The success of the police in enforcing the law was “impressive”, according to a new report published yesterday by the Financial Action Task Force (FATF), an intergovernmental body based in Paris.
According to the police’s risk analysis, around $1.3 billion is generated every year in New Zealand from criminal activity, mostly from the supply and distribution of methamphetamine and cocaine.
On those figures, New Zealand is estimated to be restraining around 8 per cent of criminal proceeds annually, according to the FATF report, a rate that the taskforce described as “impressive”.
The global average is around 2.2 per cent.
The report, published on Thursday night, said that New Zealand was one of only four countries to achieve a “high level of effectiveness” in pursuing criminal proceeds, along with the US, Israel and Honduras.
The FATF, founded by the G7 in 1989 to help clean up the international financial system, said that New Zealand is still vulnerable to money laundering despite its progress in recent years. The taskforce welcomed steps such as tighter controls on company registrations, including residency requirements for directors, but said there are still “major gaps in the framework”.
The main problems, the taskforce said, are that the use of nominee directors and shareholders in shell companies and the lack of accurate information about trusts allows the true beneficial owners of corporate entities to conceal their identities.
However, FATF also pointed out that the police Financial Intelligence Unit needs more sophisticated software to analyse the millions of financial transactions reported to them each year.
This would give the police greater abilities to identify trends and patterns, in order to find new targets to investigate who may otherwise escape detection.
Detective Inspector Craig Hamilton, the national supervisor for the Asset Recovery Unit and the Financial Intelligence Unit, said the police are “well advanced” to respond to that FATF criticism, as the contract negotiations to provide the new technology are underway.
“It’s been a long process but we’re hopeful the technology will be in place by the end of the year,” said Hamilton.
“We’re investing in the right part of the business … it’s going to be really cool.”