DIA exercises regulatory authority with The Ink Patch Money Transfer Limited

5 June 2019

The Department of Internal Affairs (DIA) has accepted an enforceable undertaking from The Ink Patch Money Transfer Limited (Ink Patch) under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act). Ink Patch Money Transfer Limited, company number 4563039 is registered as a financial service provider and provides a remittance service to customers wanting to remit money to Samoa. An enforceable undertaking is an agreement between the Department and a business following a breach of the AML/CFT Act. In this case, the agreement details a series of actions that Ink Patch will undertake to comply with AML obligations within an agreed timeframe and is legally binding.

The Ink Patch Money Transfer Limited failed to meet AML/CFT Act requirements over the period 22 November 2013 to 11 September 2018 that include failing to conduct customer due diligence, failing to adequately monitor accounts and transactions and failing to implement or maintain an AML/CFT programme. The enforceable undertaking from Ink Patch was accepted on 20 February 2019 under section 81 of the AML/CFT Act. Throughout the five-year period to September 2018 the Department regularly engaged with Ink Patch to address several areas of non-compliance with the requirements of the Act following numerous desk-based reviews and on-site inspections. A formal warning was issued to Ink Patch on 29 January 2015 under section 80 of the AML/CFT Act for repeated noncompliance.

Establishing a cooperative relationship

“We recognise that businesses get things wrong, and we are committed to working with businesses that are genuinely trying to get things right. Through an enforceable undertaking, we can closely monitor Ink Patch’s implementation of remedial actions and we want to help them meet their obligations” said Mike Stone, Director of the Department’s AML Group. 

Ink Patch has agreed to take immediate action to rectify all areas where it was non-compliant with its AML/CFT obligations. The Department will consider further enforcement action if Ink Patch Money Transfer Limited does not improve and comply with the AML/CFT Act. 

This is the third enforceable undertaking accepted from a reporting entity. Since the AML/CFT Act came into force on 30 June 2013, the Department has also issued 27 formal warnings, either for failure to meet particular risk assessment or AML/CFT programme obligations or for failing to submit an annual AML/CFT report.

Enforcement action taken for serious non-compliant remittance providers

Two judgments have been issued by the High Court for conduct by AML/CFT reporting entities constituting civil liability acts under the AML/CFT Act. Both actions were brought by the DIA as the AML/CFT supervisor. The first judgment was issued in the Auckland High Court in September 2017 making orders requiring Ping An Finance (Group) New Zealand Company Limited to pay a total of $5.29 million in pecuniary penalties. It also granted injunctions restraining the company and its sole director, Mr Xiaolan Xiao, from providing financial services that would cause either of them to be a reporting entity under the AML/CFT Act. This was followed by a decision on 27 July 2018 against Qian DuoDuo Limited resulting in an order to pay $356,000 in pecuniary penalties.