The Reserve Bank of New Zealand – Te Pūtea Matua welcomes the High Court’s decision to impose a civil pecuniary penalty of $6.731 million on ASB Bank Limited for seven breaches of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009.
This is the highest AML/CFT penalty ever imposed by the Court in New Zealand. ASB is one of New Zealand’s largest banks and this penalty reflects the seriousness and prolonged nature of ASB’s non-compliance.
Banks are exposed to a high risk of money laundering and terrorism financing, and transaction monitoring plays a critical role in banks’ AML/CFT programmes. In this case, ASB’s transaction monitoring system and AML/CFT programme were inadequate for approximately six years, which is unacceptable.
“Transaction monitoring is a key pillar to detect money laundering and terrorism financing. It is incumbent on banks to ensure their systems and processes are robust and sufficiently recognise and mitigate these risks,” Acting Assistant Governor Financial Stability Angus McGregor says.
“The AML/CFT Act plays an important part in maintaining and enhancing New Zealand’s international reputation and contributing to public confidence in our financial system. Non-compliance with transaction monitoring and reporting requirements denies New Zealand intelligence agencies crucial time-sensitive information that is needed to detect and deter money laundering and terrorism financing from impacting New Zealand communities,” Mr McGregor says.
Following an investigation, the Reserve Bank commenced proceedings against ASB in December 2025. ASB cooperated with the investigation and admitted to all seven breaches of the AML/CFT Act including failures to:
- establish, implement, or maintain an AML/CFT programme relating to customer due diligence requirements;
- establish, implement, or maintain an AML/CFT programme relating to requirements to manage and mitigate the risks of money laundering and terrorism financing;
- establish, implement, or maintain an AML/CFT programme relating to monitoring and managing compliance with ASB’s procedures, policies, and controls;
- adequately conduct ongoing customer due diligence on foreign trust customers;
- report suspicious activities within the time required;
- conduct enhanced customer due diligence; and
- terminate business relationships when required.
This is an important reminder of the essential role of banks in maintaining the integrity and reputation of New Zealand’s financial system. In this case, ASB failed to meet this expectation.
In determining its enforcement response, the Reserve Bank applied its Enforcement Framework which is available on the Reserve Bank’s website.
More information
- Full Judgment (PDF, 376KB)
- Settlement Agreement (PDF, 2.9MB)
- Enforcement Framework
- How we regulate banks to ensure they meet their obligations under the AML/CFT Act
