(18 May 2012 – New Zealand) The European Union (EU) banking and corporate “white list” has struck off New Zealand and Russia over weak money laundering and terrorism financing controls.The EU has not formally announced why it removed New Zealand, but EU member state Latvia publicly named New Zealand in a letter to Fairfax Media.
‘I would like to inform you that Latvia has intended to exclude New Zealand and Russian Federation from the list of countries whose legal requirements of money laundering and terrorist financing prevention are equivalent to legislation of the European Union,’ Latvia’s Deputy State Secretary on financial policy issues in the Ministry of Finance, Arina Andreicika, said in the letter.
She said Latvia had made its decision based on a report from the EU’s Committee on the Prevention of Money Laundering and Terrorist Financing.
It maintained that New Zealand no longer had comparable laws to the EU and she added: ‘Conclusion is based on evaluation of the report on New Zealand laws and regulations of money laundering and terrorist financing prevention in compliance with international requirements and the level of corruption in the Russian Federation.’
Being struck off the white list means that banks and institutions in Latvia and the EU ‘will not be entitled any more to make simplified research for banks and financial institutions registered in New Zealand and Russia’.
It also means European institutions can no longer ‘accept and acknowledge’ customer identification and analysis’ performed in New Zealand.
Latvia’s confirmation it had blacklisted New Zealand comes after revelations over the way New Zealand registered shell companies – which can be created on the Internet for A$153.33 – have been used in multi-million dollar money laundering operations involving banks in Riga.