Co-operative Bank faces $1.425 million AML/CFT penalty
The Reserve Bank of New Zealand (RBNZ) has filed civil proceedings against The Co-operative Bank for three breaches of anti-money laundering requirements. The parties jointly recommend a $1.425 million penalty to the High Court.
Systemic failures in AML/CFT programme
The RBNZ's claim against The Co-operative Bank stems from at least 2020 and relates to the adequacy and effectiveness of the bank's Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) programme.
Specifically, the bank failed to ensure all transaction monitoring rules were operating correctly, conduct adequate assurance activities for account and transaction monitoring, and maintain proper records for these activities.
As a direct consequence, The Co-operative Bank could not identify higher-risk transactions and customers, undertake timely enhanced due diligence, or maintain required records as mandated by the AML/CFT Act 2009.
Acting Assistant Governor Angus McGregor emphasized that "prolonged and systemic failures to meet core AML/CFT obligations are serious and unacceptable," highlighting the RBNZ's expectation for robust systems to mitigate financial crime risks.
Liability admitted, supervision shifts
The Co-operative Bank has admitted liability for all three causes of action brought by the RBNZ.
Both parties have agreed to jointly recommend a penalty of $1.425 million to the Wellington High Court, though the final determination rests with the Court.
The RBNZ clarified that there is no allegation of The Co-operative Bank's direct involvement in money laundering or terrorism financing.
From July 1, 2026, the Department of Internal Affairs (DIA) will assume responsibility as the sole AML/CFT supervisor for all reporting entities in New Zealand, and will take carriage of this proceeding from that date.