Training

DIA Formal Warning NZForex Limited — 3,182 Unreported PTRs Lan’s Enterprise Limited Training Program Presented by: Angela Ji Contact: aml@gmfinance.co.nz Emergency Hotline: +64 09-309-8808 Overview DIA issued a formal warning to NZForex Limited on 18 March 2025 3,182 prescribed transactions were not reported to the FIU Reporting gap spanned 1 November 2017 → 28 February 2024 — over six years All unreported transactions were non-NZD denominated No allegation of money laundering — this was a system / reporting-control failure Who is NZForex? Online foreign-exchange and international payments business Reporting entity under the AML/CFT Act 2009 Required to file: International Funds Transfers (IFTs) ≥ NZ$1,000 cross-border Large Cash Transactions (LCTs) ≥ NZ$10,000 in cash Collectively known as Prescribed Transaction Reports (PTRs) What Went Wrong The system issue A defect in NZForex’s PTR processing pipeline Affected transactions not denominated in New Zealand Dollars Non-NZD volumes silently bypassed the reporting workflow The defect persisted for 6 years and 4 months undetected by internal monitoring What was missed 3,182 individual prescribed transactions Each was a separately reportable obligation under section 48A How It Was Discovered NZForex itself identified the issue The defect surfaced through internal system review — not a DIA finding NZForex voluntarily disclosed the non-compliance to DIA Backfill: all 3,182 transactions were submitted to the FIU An independent audit was commissioned voluntarily The Regulator’s Position “DIA acknowledges that NZForex has voluntarily disclosed the non-compliance, and we commend NZForex for disclosing the non-compliance, admitting fault and taking steps to resolve the system issue.” ...

Onboarding Customers with Complex Ownership Structures Q3 2025 Quarterly Training Lan’s Enterprise Limited Training Program Training Objectives What you’ll learn today: Understand obligations for penetrating complex ownership structures Identify beneficial owners through multi-layer entities Apply Enhanced CDD in high-risk scenarios Navigate trust structures and nominee arrangements Establish effective control in layered ownership Why This Matters AML/CFT Obligations Reporting entities must go beyond surface-level ownership and penetrate through complex structures to identify ultimate beneficial owners (UBOs) and effective controllers. ...

Customer Risk Rating Guideline Q1 2025 - Risk Assessment Framework Lan’s Enterprise Limited Training Program Training Objectives What you’ll learn today: Understand the risk-based approach (RBA) to AML/CFT compliance Identify key risk factors in customer assessment Apply the customer risk rating framework Recognize high, medium, and low risk indicators Implement ongoing monitoring and risk reassessment The Risk-Based Approach Two Pillars of AML/CFT Compliance Holistic Risk Assessment Business-wide risk evaluation Product, service, and channel analysis Targeted Risk Assessment ...

Enhanced Customer Due Diligence ECDD Best Practice Lan’s Enterprise Limited Training Program Training Objectives What you’ll learn today: Define clear internal criteria for identifying ECDD category customers Demonstrate effectiveness of automated and manual ECDD systems Apply risk-based approach to Source of Funds/Wealth verification Implement proper documentation and monitoring procedures Recognize key risk indicators requiring enhanced verification Why ECDD Matters Critical Foundations ECDD is mandated by AML/CFT regulations when higher risk is identified ...

AML Case Study The Jiaxin Finance Investigation Lan’s Enterprise Limited Training Program Presented by: Angela Ji Contact: aml@gmfinance.co.nz Emergency Hotline: +64 09-309-8808 Training Objectives Understand the Jiaxin Finance DIA investigation and its context Identify the compliance failures that triggered regulatory action Recognise the enforcement pathway DIA follows for money remitters Apply the lessons learned to LEL’s own compliance operations Reinforce the importance of proactive compliance over reactive remediation Overview DIA conducted a compliance investigation into Jiaxin Finance, a money remitter Investigation revealed systemic AML/CFT compliance failures Case is part of DIA’s escalating enforcement posture against non-bank reporting entities Money remitters remain a high-priority supervisory target for DIA Follows a pattern of enforcement actions against remitters: Ping An Finance, Lidong Foreign Exchange, NZForex DIA Enforcement Context Money remitters under the spotlight The AML/CFT Act 2009 applies equally to all reporting entities — banks and non-banks alike DIA has explicitly signalled that money remitters face heightened scrutiny Remittance sector is identified as high-risk for money laundering due to: High-volume, cross-border cash flows Customer base often involving migrant remittances Potential for structuring and layering Variable compliance maturity across the sector DIA Enforcement Pathway Escalating regulatory tools Educational guidance — informal engagement Directions — formal requirement to act Formal warning — public record under s80 Civil penalty — pecuniary penalty order Criminal prosecution — for knowing or reckless breaches “Money remitters should expect stronger action for serious breaches. DIA uses escalating enforcement tools — from educational guidance through to prosecution.” ...

2024 Q4 AML Knowledge Quiz Testing Your Anti-Money Laundering Expertise Lan’s Enterprise Limited Training Program Welcome to the Quiz Test your understanding of: Money laundering offences and stages Suspicious Activity Reporting (SAR) Customer Due Diligence (CDD) requirements Politically Exposed Persons (PEP) Compliance obligations AML terminology and concepts Instructions How this quiz works: 10 questions covering key AML topics Read each question carefully Think about your answer before advancing Correct answers and explanations will be revealed Take your time and reflect on each question Question 1 Money Laundering Offences Which of the following acts is NOT considered to be a money laundering offence? ...

2024 Q3 AML Regulatory Inspection Focus Update Insights for Chinese Money Remitters Lan’s Enterprise Limited Training Program Training Objectives What You’ll Learn Today Ensure alignment between business practice and AML programme documentation Understand Chinese remittance characteristics and address regulatory misunderstandings Implement enhanced record keeping with proper time stamps and file notes Apply a holistic approach to Enhanced Customer Due Diligence (ECDD) Prepare effectively for upcoming regulatory inspections Overview Regulatory Inspection Context Several business partners are currently undergoing regulatory onsite visits. This training provides critical insights from recent inspections to help all BPs prepare effectively. ...

AML/CFT Webinar Customer Due Diligence — 2024 Refresh Lan’s Enterprise Limited Training Program Presented by: Angela Ji Contact: aml@gmfinance.co.nz Emergency Hotline: +64 09-309-8808 Overview 10 May 2024 — DIA, FMA and RBNZ jointly published updated CDD guidance Tied to AML/CFT Amendment Regulations 2023 in force from 1 June 2024 Five new guideline documents replacing/supplementing prior CDD guidance This session walks through what changed and what we must adopt at LEL Why the Refresh? 2021 Statutory Review of the AML/CFT Act identified gaps in CDD practice 2023 amending regulations clarified beneficial-ownership obligations Supervisors aligned on a single, risk-based, principles-based interpretation Real-world enforcement (Hills, SkyCity, Jiaxin) reinforced the need for clearer guidance The Five New Documents # Document Focus 1 Beneficial Ownership Guideline Identifying and verifying the natural-person owner behind every customer 2 CDD: Companies Standard and enhanced CDD on incorporated customers 3 CDD: Trusts Settlor / trustee / beneficiary / class verification 4 CDD: Limited Partnerships General partner ID + LP register checks 5 Enhanced CDD When ECDD is triggered, what extra steps are required What Changed — Beneficial Ownership 25% threshold confirmed for beneficial ownership of companies — but also any person with effective control regardless of shareholding Multi-layer corporate structures: must drill through every layer to natural persons Where no natural person can be identified, senior managing official must be CDD’d Document the reasoning — the supervisor wants to see how you concluded What Changed — Trusts & LPs Trusts CDD on every named beneficiary, settlor, trustee, and protector Where beneficiaries are a class, the class must be described and CDD applied to known members Discretionary trusts get extra scrutiny Limited Partnerships General partner is treated as the responsible party LP register must be checked against customer-provided info Foreign LPs trigger ECDD by default What Changed — Enhanced CDD ECDD triggers (refreshed) Trusts and vehicles dealing with assets Companies with nominee shareholders or directors Politically Exposed Persons (PEPs) Customers from high-risk jurisdictions Wire transfers above prescribed thresholds Anything else the entity’s risk assessment flags ECDD requirements Source of funds and source of wealth Senior management approval Enhanced ongoing monitoring frequency The Risk-Based Approach “Reporting entities must tailor their AML/CFT programme to their specific risk profile.” ...

Responsibilities Under Money Laundering Supervision Q2 2024 - Your Role as a Reporting Entity Member Lan’s Enterprise Limited Training Program Training Objectives What you’ll learn today: Understand your responsibilities as a reporting entity member Identify the four key areas of AML/CFT compliance Apply customer due diligence requirements correctly Recognize when enhanced due diligence is required Implement effective internal controls and monitoring Your AML Responsibilities Every Team Member Matters As a reporting entity under the AML Act, every member has responsibility under money laundering supervision. ...

Record Sentence Ye Hua and NZ’s Largest ML Conviction Lan’s Enterprise Limited Training Program Presented by: Angela Ji Contact: aml@gmfinance.co.nz Emergency Hotline: +64 09-309-8808 Overview 7 years 6 months — the longest money laundering sentence in NZ history At least NZ$18 million laundered for an international drug syndicate Sentenced 16 November 2023 in Auckland District Court This deck focuses on sentencing reasoning and operational red flags — the offending pattern itself is covered in the Q3 2022 Ye Hua case study Who Was Convicted Ye “Cathay” Hua, 58 years old Churchgoing matriarch of a prosperous Auckland family Money exchange business funded a St Heliers mansion Director of Lidong Foreign Exchange — money shop at 1 Kent St, Newmarket In Valent’s encrypted messages: “Newmarket money lady” / “money shop” Found guilty of 15 of 19 charges (jury verdict, July 2023, three-week trial) Maximum penalty per charge: 7 years The Underlying Criminal Enterprise Principal: Xavier Valent Sentenced to life imprisonment for leading the syndicate Imported 100+ kilograms of methamphetamine into NZ between 2016 and 2020 Hua was the syndicate’s primary money-laundering channel for cash proceeds How the cash moved Cash deposits at Lidong Foreign Exchange International wires from the same money-changer Bitcoin conversions Direct transactions with low-level dealers and Valent’s lieutenants The Numbers Argued at Trial Party Dollar amount Crown $26 million Judge’s finding At least $18 million Defence $6-10 million “By value, Ms Hua’s offending is many magnitudes more serious than any other case which has been before a court in this country.” ...