Autonomous Sanctions

New Zealand's New Power for Autonomous Sanctions

AMLMag.com

For the first time in New Zealand’s history, it holds economic powers to rule sanctions against a country that has breached international laws. These sanctions can impact on close associates, business partner or family members of government officials.

Previously New Zealand could only authorise a sanction following the United Nations Security Council passing a Resolution. 

The problems that arise from reliance on the United Nations Security Council (the UNSC), is its formation of five permanent member countries needing to unanimously agree to a UNSC Resolution.  All  five members have to unanimously agree to the UNSC Resolutions.  Of these five member states, two include Russia and China. The other three countries are France, the United Kingdom and the United States.  As Russia will not agree to pass sanctions against its country, the UNSC becomes powerless.

New Zealand has finally enacted laws that provide capability to penalise a country that breaches International laws on Peace.

New Zealand Cabinet urgently considered the situation unfolding in Ukraine and voted to penalise Russia with economic sanctions. This includes Putin personally and those that support Putin’s leadership in invading Ukraine.

Businesses in New Zealand must now be aware of what types of transactions can be processed and what transactions are forbidden and/or require further due diligence.   

These laws are relevant to laws designed to combat money laundering and terrorism financing.  Businesses in New Zealand are already familiar with the need to verify customers and understand the nature of the customer’s transactions.

Anti-Money Laundering Compliance Officers need to review operational requirements for processing customer activity and transaction instructions.