Reserve Bank of New Zealand files AML proceedings against The Co-operative Bank over transaction monitoring failures with NZD 1.425 million penalty proposed

The Reserve Bank of New Zealand has filed civil proceedings in the Wellington High Court against The Co-operative Bank Limited over three breaches of core requirements under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. The bank has admitted liability for all three causes of action, and the parties have jointly recommended a penalty of NZD 1.425 million, subject to the Court's decision. The case relates to the adequacy and effectiveness of the bank's AML/CFT programme from at least 2020. It centres on failures to ensure all transaction monitoring rules were operating correctly, to carry out adequate assurance over account and transaction monitoring, and to maintain records required under its programme. According to the Reserve Bank of New Zealand, those weaknesses meant the bank failed to identify higher-risk transactions and customers, undertake timely enhanced due diligence, and keep required records. It is not alleged that The Co-operative Bank was itself involved in money laundering or the financing of terrorism. The action is the central bank's second AML/CFT civil proceeding against a reporting entity in the last six months. From 1 July 2026, the Department of Internal Affairs will become the single AML/CFT supervisor for all reporting entities in New Zealand and will take carriage of the proceeding.