The Reserve Bank of New Zealand (RBNZ), the country’s central bank and prudential regulator, has launched civil proceedings in the Wellington High Court against The Co-operative Bank over three separate breaches of anti-money laundering obligations dating back to at least 2020.
The legal action centres on failures within The Co-operative Bank’s AML/CFT programme under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009. Specifically, the bank failed to ensure its transaction monitoring rules were functioning correctly, did not carry out sufficient assurance activities to verify the effectiveness of its account and transaction monitoring, and did not keep adequate records relating to those monitoring and assurance activities. Consequently, the bank failed to flag higher-risk transactions and customers, carry out timely enhanced due diligence, and preserve records as required by law.
The Co-operative Bank has admitted liability across all three causes of action. Both parties have agreed to jointly recommend to the court a penalty of $1.425m, though the final determination on the penalty rests with the court. It has not been alleged that the bank was itself engaged in money laundering or the financing of terrorism.
The Co-operative Bank is a New Zealand-registered bank and member-owned financial institution offering retail banking products and services to its customers.
This marks the second AML/CFT civil proceeding filed by the RBNZ against a reporting entity within a six-month period. From 1 July 2026, supervisory responsibility will transfer to the Department of Internal Affairs (DIA), which will become the sole AML/CFT supervisor for all reporting entities in New Zealand. The DIA has expressed support for the action and will assume conduct of the proceedings from that date. The RBNZ has stated it will not be commenting further while the matter remains before the court.
RBNZ acting assistant governor of financial stability Angus McGregor said, “This is the second AML/CFT civil proceeding the RBNZ has filed against a reporting entity in the last six months. This enforcement response promotes the AML/CFT Act’s purposes, which are to detect and deter money laundering and the financing of terrorism; maintain and enhance New Zealand’s international reputation; and contribute to public confidence in the financial system.”
Angus McGregor added, “This action again reinforces that prolonged and systemic failures to meet core AML/CFT obligations are serious and unacceptable.”
Angus McGregor also said, “The RBNZ expects all banks to have appropriate systems and resources in place to actively monitor customer accounts and transactions, supported by fit for purpose testing and assurance to fully comply with the requirements of the Act. These measures are essential to identify and mitigate potential money laundering or terrorism financing risks in a timely manner.”
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