The repetition of purchasing and selling assets assists launderers to confuse the audit trail.   This is commonly known as 'layering' and assets that can be bought and sold in short time frames are attractive to launderers.  

Risk elements that make a product or service vulnerable to money laundering include–

• Complex or opaque ownership;

• Rapid movement for transferring funds;

• High value;

• Low value but high volume;

• Ease of transferring ownership;

• Can be used or accessed outside of New Zealand;

• Allows third party payments.

The more risk elements the product or service has, the greater the likelihood that the product will be targeted to facilitate money laundering.

Typical assets favoured by launderers include art, precious metals, real estate and high value motor vehicles.   Other laundering processes include the securities and derivative markets, both of which can offer ownership obscurity.

When conducting product and services risk assessment, businesses will need to ensure they assess all products and services that they distribute, including those that are no longer offered but are still in existence.    

The AML CFT compliance officer and senior management should be involved in reviewing new products to assess ML TF risks and providing their approval before the product is marketed and distributed.   The compliance programme should set out these requirements and outline the approval process.

When carrying out a risk analysis of product and services provided by your business, consideration should be given to developing a Risk Register. 

A register can be produced by using an Excel spread sheet and designing an appropriate formula.  The formula should take into account that certain risk elements (such as those described above) may be of more concern than another and hence, some elements may have a greater "weight" attached to it.