The Reserve Bank of New Zealand has filed a statement of claim in the High Court against locally-owned TSB Bank for acknowledged breaches of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act.
TSB has acknowledged liability, has been cooperating with the RBNZ and both parties have filed an agreed statement of facts with the High Court.
The court action follows a 2016 formal warning TSB Bank received from the Reserve Bank for failure to comply with the AML/CFT Act. In 2019 the RBNZ identified that TSB continued to show inadequate and ineffective compliance with its anti-money laundering 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,” said RBNZ deputy governor Geoff Bascand.
The Reserve Bank is seeking pecuniary penalties in respect of four categories of non-compliance by TSB Bank: the absence of adequate and effective procedures, policies and controls for monitoring and managing compliance with its AML/CFT programme; a failure to review and maintain its AML/CFT programme; failure to conduct a risk assessment in respect of its realty operations; and the failure to have regard to certain countries it deals with when reviewing its 2017 risk assessment.