High Court decision reinforces importance of AML/CFT compliance

The High Court has imposed a $1.425 million civil penalty on The Co-operative Bank Limited for breaches of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. The Court accepted an agreed penalty following the Bank's admission of programme-related failures relating to deficiencies in its transaction monitoring rules, inadequate assurance testing of its transaction monitoring, and insufficient record-keeping.

The decision follows proceedings that were originally commenced by the Reserve Bank of New Zealand and continued by the Department of Internal Affairs (DIA) following the transfer of responsibility for AML/CFT supervision of banks on 1 July 2026.

The Court noted that The Co-operative Bank cooperated with the investigation, admitted the breaches and has addressed the deficiencies identified.

It was not alleged that The Co-operative Bank was itself involved in money laundering or the financing of terrorism.

DIA's General Manager Regulatory Services John Sneyd said the decision highlights the importance of effective anti-money laundering and countering financing of terrorism (AML/CFT) systems and controls.

"New Zealand's AML/CFT regime relies on reporting entities having effective systems and processes in place to identify, assess and manage risk.

"Robust compliance programmes help support the integrity of New Zealand's financial system and maintain public confidence in it.

"This decision reinforces the importance of meeting AML/CFT obligations and maintaining strong compliance frameworks.

DIA continues to work with reporting entities to support compliance with New Zealand's AML/CFT requirements and will take appropriate regulatory action where non-compliance is identified.

ENDS

Notes for editors

The High Court imposed a civil penalty of $1.425 million on The Co-operative Bank Limited.

The Bank admitted programme-related breaches relating to deficiencies in its transaction monitoring rules, inadequate assurance testing of its transaction monitoring, and insufficient record-keeping.

Responsibility for AML/CFT supervision of registered banks transferred from the Reserve Bank of New Zealand to the Department of Internal Affairs on 1 July 2026.

The Court accepted an agreed penalty and noted the Bank's cooperation during the investigation and proceedings.