Internal affairs department issued formal warnings against six law firms, among others
The New Zealand Law Society has reminded law firms that are reporting entities under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 of the significance of their independent audit obligations, following the Department of Internal Affairs’ (DIA) recent public formal warnings.
In a news release, the law society also urged law firms that are reporting entities to review their AML/CFT obligations and complete any mandatory independent audits within the relevant timeframes.
Stressing the importance of AML audit requirements, the DIA directed the warnings to six law firms and four other reporting entities for repeated audit-related non-compliance, specifically their failures to undertake the required independent audits of their AML/CFT programs and risk assessments on at least two occasions.
“This is the first time we have issued multiple co-ordinated formal warnings for failing to complete a required independent audit,” said Laura Olsen, the DIA’s acting director for AML/CFT, in a news release.
The DIA identified these independent audit breaches as part of its thematic review for 2026.
Olsen emphasised that the issuance of the public formal warnings reflected the DIA’s expectation that reporting entities would meet their legal obligations.
“These exist to protect us from financial crime, by helping us spot gaps in the system that could allow dirty money to slip through,” Olsen said. “This isn’t compliance for compliance’s sake. Independent audits help us check whether a reporting entity’s AML/CFT programme actually works, identify gaps, and ensures compliance isn’t just paper-based.”
Olsen added that stringent AML/CFT controls help lower the risk of crimes associated with money laundering, which are harmful to New Zealanders.
“Strong compliance frameworks deliver benefits across the system,” Olsen said in the DIA’s news release. “We are committed to working alongside industry to achieve this.”
Olsen added that the DIA strives not only to take action against non-compliance, but also to help reporting entities comprehend and comply effectively with their AML/CFT obligations.
