SkyCity Entertainment Group Settles with DIA on AML/CFT Breach in New Zealand

Home » Reviews » SkyCity Entertainment Group Settles with DIA on AML/CFT Breach in New Zealand

Recently, I came across some news about the SkyCity Entertainment Group (land based and online casino) reaching a settlement with the New Zealand Department of Internal Affairs (DIA) over its breach of anti-money laundering and countering financing of terrorism (AML/CFT) obligations in the country. It appears that this significant development marks an important milestone in addressing these critical issues that affect the nation’s financial systems and overall security.

As I delved deeper into this issue, I discovered that SkyCity had admitted to multiple instances of violating the country’s AML/CFT laws, which spanned from February 2018 for around 59 months. By settling with the DIA, the company has taken responsibility for its actions, and moving forward, it must ensure that it complies with the stringent regulations in place to safeguard New Zealand’s financial integrity.

Details of Settlement with DIA

As it turns out, SkyCity had breached its anti-money laundering and countering financing of terrorism (AML/CFT) obligations in the country.

According to the DIA press release, the settlement includes a multi-million-dollar payment from SkyCity to the DIA. While the exact amount hasn’t been disclosed, it’s clear that this agreement sends a strong message about the importance of compliance with AML/CFT regulations in New Zealand.

Apart from the financial penalty, I also found out that both parties agreed on several important actions that SkyCity must undertake. These actions will ensure further compliance and cooperation with the DIA, helping to uphold the integrity of New Zealand’s financial system. Some of these actions include:

  • Implementing enhancements to SkyCity’s AML/CFT program
  • Improving reporting and ongoing monitoring of customer transactions
  • Appointing an independent expert to review SkyCity’s AML/CFT program and report findings to the DIA

SkyCity has acknowledged the non-compliance and, according to NZX, has already made significant improvements in its AML/CFT processes. It’s reassuring to see that they’re taking the necessary steps to rectify the situation and ensure compliance moving forward.

Breach of AML/CFT Obligations

According to the reports, SkyCity Casino Management Limited (SCML), a subsidiary of the company, admitted that it had breached its obligations under the AML/CFT Act. Some of these breaches included failure to undertake a fully-compliant risk assessment, not maintaining a compliance programme, and inadequately monitoring accounts. You can read more about these breaches here.

As part of the settlement, SkyCity accepted that it should pay a penalty of more than $4 million. This comes after the agreement was reached to resolve the civil penalty proceedings that commenced in February 2024.

AML/CFT Laws in New Zealand

I thought it’d be useful to briefly explain AML/CFT laws in New Zealand. These laws were introduced to combat money laundering and terrorism financing activities. They aim to protect the integrity of New Zealand’s financial system, and as such, they apply to businesses like SkyCity Entertainment Group.

To understand what these laws entail, I’ll start by mentioning the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. This was the primary piece of legislation enacted to strengthen the country’s AML/CFT framework. Under this act, businesses are required to:

  • Conduct customer due diligence to verify customers’ identities and assess their risk profile;
  • Monitor customer transactions for any potential suspicious activity;
  • Keep records of customer identification information and transaction data;
  • Recruit an AML/CFT compliance officer to maintain compliance controls; and
  • Lodge annual reports on AML/CFT activities with regulatory authorities.

In the case of SkyCity, their breach of AML/CFT obligations let to a $2.54 million penalty. It’s important for companies to take these laws seriously to avoid potential financial and reputational damage.

So, as you can see, New Zealand is committed to maintaining a safe financial system free from money laundering and terrorism financing activities. Compliance with these laws not only ensures a secure environment for businesses and customers but also fosters trust and confidence in the country’s financial sector.

Role of the New Zealand Department of Internal Affairs

As a friendly reminder, I’d like to briefly explain the role of the New Zealand Department of Internal Affairs (DIA) in cases like the one involving SkyCity Entertainment Group. The DIA plays a crucial part in ensuring compliance with AML/CFT regulations in New Zealand.

Firstly, it’s important for me to mention the DIA’s main responsibilities. They focus on maintaining public trust and confidence in various sectors like gambling, charities, and digital services. This helps to protect New Zealand’s financial system’s integrity and prevent illicit activities like money laundering and terrorism financing.

In order to achieve their goals, the DIA actively monitors registered entities for compliance. This involves conducting regular audits, investigating suspicious activities and, if necessary, taking legal action. In SkyCity’s case, the DIA filed civil proceedings against the company for breaching its AML/CFT obligations, demonstrating the DIA’s commitment to enforcing laws and maintaining New Zealand’s financial system’s integrity.

Moreover, collaboration is an essential aspect of the DIA’s work. They often team up with other government agencies and various stakeholders to ensure a coordinated national approach to AML/CFT compliance. In this situation, SkyCity and the DIA reached a multi-million-dollar settlement, resolving the breach issue after thorough engagement.

Finally, the DIA also plays a role in raising awareness of AML/CFT regulations and promoting best practices. They help businesses to understand their obligations and provide guidance on implementing effective compliance measures.

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