New Zealand FMA Releases AML/CFT Sector Risk Assessment 2021

The New Zealand Financial Markets Authority (FMA) has published its Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Sector Risk Assessment 2021, which updates the regulator's 2017 version.

The report outlines those factors that can increase a sector's risk to ML/TF, aiming to improve firms' understanding of ML/TF risks in their sectors, as well as identify trends and emerging issues. It is an important document for reporting entities that report to the FMA under the AML/CFT regime because they must carry out an individual risk assessment of their business.

The report found that derivatives issuers and cryptocurrency service providers are in the high risk category for meeting AML and CFT obligations. The risk ratings of the 10 sectors the FMA supervises have not changed since 2017 as there has been little change in circumstances for reporting entities. However, virtual asset service providers (VASPs) - which facilitate cryptocurrency, token, or crypto-asset transactions – have been added and rated as high risk.