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Te Tari Taiwhenua, the Department of Internal Affairs, has issued a warning to an Australian Buy now pay later service Openpay for failing to set, enforce, and sustain an effective Anti Money Laundering (AML) program.
The Department of Internal Affairs stated that Openpay failed to appropriately track accounts and transactions for a prolonged period in addition to having poor AML systems.
Financial service providers such as banks and payment operators have a responsibility under Anti Money Laundering (AML) and Countering Financing of Terrorism (CFT) Act to assure they aren’t really used to move funds illegally.
According to the Director of DIA’s AML systems, Mike Stone, there is no evidence that the company is involved in either money laundering or terrorism financing. He asserted that DIA oversaw a variety of enterprises that had to adhere to anti-money laundering regulations.
Openpay, a lender that offered a buy-now, pay-later service, has been active in New Zealand since 2013, according to Stone. “The issuing and publication of this formal warning demonstrate DIA’s willingness to take proportional action in response to non-compliance,” he said. Stone noted that the severity and consequences of DIA’s regulatory responses could vary from official warnings to criminal prosecution.
“We acknowledge Openpay is taking steps to establish, implement and maintain an anti-money laundering and countering the financing of terrorism program,” Mike Stone said. “DIA would continue to closely monitor Openpay,” he stated.
Shares of Openpay are traded on the Australian share market. The buy now, pay later services offered by Openpay generated transactions of A$344 million in the last fiscal year in New Zealand, the United States, Australia, and the United Kingdom. The company lost A$82.5 million before taxes, but it has promised to get profits in its Australian operations by June 2023.