Appeal dismissed in NZ’s first criminal prosecution under Anti-Money Laundering and Countering Financing of Terrorism Act
18 July 2022
An appeal against convictions in New Zealand’s first criminal prosecution under the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT Act) was dismissed by the Court of Appeal on 1 July 2022.
An estimated $1.35 billion from the proceeds of crime is laundered in New Zealand every year from drug offending, fraud and other offences. The AML/CFT Act requires businesses to identify, mitigate, and manage their money laundering and financing of terrorism risks.
In 2018 Te Tari Taiwhenua Department of Internal Affairs (DIA) brought criminal charges against Jiaxin Finance, its sole director Qiang Fu and his mother Fuqin Che, after Jiaxin Finance failed to keep adequate records and report suspicious transactions by Canadian businessman Xiao Hua Gong, also known as Edward Gong, which totalled over $53 million.
On conviction in the Auckland High Court, Jiaxin Finance was sentenced to pay a fine of $2.55m. Mr Fu was sentenced to pay a fine of $180,000, and Ms Che was sentenced to pay a fine of $202,000. Jiaxin Finance, Mr Fu and Ms Che appealed their convictions to the Court of Appeal. On 1 July 2022, the appeal was dismissed.
Mike Stone, Director of the Anti-Money Laundering Group at DIA, says the dismissal of Jiaxin Finance’s appeal is a significant judgment for DIA and the wider AML/CFT system’s efforts to deter money laundering and the financing of terrorism in Aotearoa New Zealand.
DIA is one of three supervisors (government agencies with regulatory responsibilities) empowered by the AML/CFT Act to assess the money laundering and terrorism financing risks across the reporting entities they supervise, and promote, monitor, investigate and enforce their reporting entities’ compliance with the AML/CFT Act. The other supervisors are the Reserve Bank of New Zealand and the Financial Markets Authority.
“Our department supervises over 5000 financial institutions and other non-financial businesses and professions for compliance with measures to detect and deter money laundering and terrorism”, says Mike Stone.
“For the most part, businesses want to comply with the AML/CFT Act and have programmes in place to do so.
Unfortunately, there are businesses who fail to comply with their obligations, including the reporting of suspicious transactions. This tarnishes New Zealand’s reputation of being a safe and legitimate place to do business.
The recent court judgment shows that the legislation is applicable to all who are obliged to comply and strongly supports the work of DIA and other supervisors under the AML/CFT Act to protect New Zealand’s global reputation and our communities from harm.”
For more information visit our website www.dia.govt.nz/AML-CFT-Homepage.
