When terror acts go wrong | The Jackal

10 Sep 2013

When terror acts go wrong

Today, Stuff reported:

A former Taranaki man working in Saudi Arabia learned money he sent home to pay bills had been seized under an anti-terrorism act.

Michael Shaskey says Kiwibank froze US$2600 ($3265) he sent to his New Zealand account under the Anti-Money Laundering and Countering Financing of Terrorism Act.

Shaskey, who has been teaching in Saudi Arabia since June, said he only learned the funds had been sequestered after several messages to Kiwibank went unanswered and he threatened to go to the Banking Ombudsman.

Actually, under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (PDF), the Reserve Bank is the responsible supervisor. That means only they could have ordered that Shaskey's funds be forfeited.

Under that act, Kiwibank is required to comply with the Reserve Banks AML/CFT supervisor's orders. Also, they wouldn't have been allowed to notify their client about what had happened.

In effect the law is a complete ass! Firstly it requires financial institutions to keep tabs on all their customers at their own expense and secondly it then gives powers to institutions that have no proper investigative capabilities.

But the real kicker is that no civil or criminal proceedings can be brought against an AML/CFT supervisor, meaning there isn't any real accountability when things go wrong. How many other innocent people's bank accounts have the "supervisors" dipped into I wonder?