SkyCity Resolves Alleged Non-Compliance Issues with New Zealand’s DIA

Lately, the Department of Internal Affairs (DIA) announced that it intends to file a lawsuit against SkyCity and its affiliate SkyCity Casino Management (SCML) for alleged breaches of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 in New Zealand.

The Act’s five different grounds of action, which the DIA believes to be significant compliance deficiencies, are the basis for its determination. SkyCity said that the majority of the problems are historical and were previously reported to the DIA, yet the regulatory body went ahead and filed a lawsuit.

Remedial Measures and Settlement

In response, SkyCity underscored its ongoing efforts to rectify compliance deficiencies. Since late 2021, the company has implemented an enhancement program focusing on bolstering compliance infrastructure through investments in personnel, technology, and process evaluations.

After negotiations, SkyCity reached a settlement with the DIA, admitting to breaching its obligations under the Act. These breaches occurred between February 2018 and March 2023, encompassing lapses in risk assessment, compliance monitoring, customer due diligence, and business relationship termination.

Importantly, the DIA clarified that while deficiencies were identified, there’s no evidence suggesting SkyCity directly engaged in money laundering or terrorism financing activities.

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As part of the settlement, both parties agreed to recommend to the high court a penalty of NZ$4.16 million. This resolution, albeit involving a significant financial penalty, allows for a swift conclusion without protracted litigation.

“This agreement is an impactful outcome,” remarked Mike Stone, AML/CFT group director at the DIA. “While we consider these regulatory breaches to be serious, we are pleased that SkyCity acknowledged responsibility for what were significant failings.”

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