Reflecting on the Techweek Panel which was hosted by the Trust, Integrity and Compliance Company (TIC. Co), it is important to continue to have conversations outside of Techweek. As the AML regime is now bedding in for the Real Estate Sector it is becoming crucial to focus on consistency across the industry. This includes strategic training that is fit for purpose and delivered consistently across real estate companies.
The AML/CFT regime and supporting regulatory guidance has clear provisions relating to training requirements. The minimum requirement for AML/CFT programmes is training on AML/CFT. Training in this space is vital, as it ensures that relevant employees are aware of the risks of ML/FT which can be faced and how they should respond when confronted with such risks.
Understanding Your AML Obligations
It is important for compliance officers to understand their obligations, as well as penalties. Allowing criminals to launder money or terrorists to find funding are significant crimes. This ultimately puts New Zealand at risk of attracting further illegal activity and may position New Zealand to become a hotspot for such activities - meaning that this impacts on New Zealand’s overall safety and security as a country. Some of the penalties (if an individual or firm as a Reporting Entity) fail to comply, include and range from; a formal warning, enforceable undertakings, serious criminal proceedings, and civil penalties. Individuals could be fined up to $200,000 personally and/or face a term of imprisonment for up to two years. Additionally, firms could incur a fine as high as $2 million.
Some examples of the breaches include failure to conduct customer due diligence (CDD) as prescribed, failure to establish, implement, or maintain an AML/CFT Programme, failure to keep records, and failing to report suspicious activities. We can see an example of this through the recent outcomes of The Department of Internal Affairs v OTT Trading Group Ltd  case, where is it once again made clear that the regulators will pursue action against business owners and the compliance officers for violations.
This space is incredibly fast-paced, coupled with there being a high turnover in the Real Estate sector. It is important that businesses and individuals are kept up to date with training and the changes that are happening.
Crime and the methods of crime also change rapidly; we saw this through the recent COVID-19 pandemic (which is still very much on-going) - another reason why training is essential in this space.
The need for reliable and consistent training has also been justified through the recent DIA Regulatory Report Findings, which was released in January 2020. It found that insufficient training of senior management, compliance officers, and any staff member with AML/CFT duties was one of the most common areas of non-compliance. AML/CFT training should be taken seriously and it should be provided regularly.
REINZ is a membership organisation who specialise in all facets of Real Estate, from residential sales to commercial and industrial sales, and leasing and residential property managers. With 14,000 members nationwide, they are one of New Zealand's premier property service and information providers.
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