DIA takes civil action against two money remitters

19 September 2019

The Department of Internal Affairs has filed civil proceedings in the Auckland High Court against OTT Trading Group Limited, an Auckland-based money remitter, and MSI Group Limited, a Christchurch-based money remitter, under the Anti-Money Laundering and Countering of Financing Terrorism Act (AML/CFT Act). The Department seeks a civil pecuniary penalty against each of them.

The Department also seeks injunctions against three individuals associated with these two companies to prevent them from providing services regulated by New Zealand’s anti-money laundering legislation in the future.

This is the fourth civil proceeding brought under the AML/CFT Act since it took effect on 30 June 2013. The Department has brought each of them.

The Department’s claim alleges that OTT Trading Group Limited and MSI Group Limited failed to meet their AML/CFT obligations as money remitters. The obligations the Department alleges they breached include those involving customer due diligence, account monitoring, record keeping and their AML/CFT programme. It is not alleged that OTT Trading Group Limited or MSI Group Limited were involved in money laundering or the financing of terrorism.

The Department is committed to detecting and deterring money laundering and terrorism financing; its role is to ensure certain financial institutions, including money remitters, meet their obligations under the AML/CFT Act. The obligations require these businesses to have robust processes in place to protect them from misuse. Failure to do so risks the integrity of New Zealand’s financial institutions and its reputation internationally. When a financial institution continues to fail in meeting their obligations under the AML/CFT Act the Department can and will take action.

As this matter is before the High Court, the Department cannot comment further at this time.

Question & Answer

What was the outcome of the Department’s previous civil proceedings under the AML/CFT Act?

There have been two court proceedings under the AML/CFT Act concluded to date: Ping An Finance (Group) New Zealand Company Limited and Qian DuoDuo Limited. Both were civil proceedings and both respondents were money remitters.

· Ping An Finance – pecuniary penalty of $5.29 million plus costs and an injunction against its director from providing financial services

· Qian DuoDuo Limited – pecuniary penalty of $356,000 plus costs

A further civil proceeding against Jin Yuan Finance Limited is still before the courts.

ends

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