What Supervisors Are Signalling

How AML CFT supervisors respond to non-compliance

Recent Department of Internal Affairs (DIA) cases, including those involving Pagemark Limited and Lexington Trust Services Limited, show how enforcement powers are applied in practice. Supervisors are equipped with a range of measures to correct behaviour, protect the financial system, and maintain sector standards.

This enforcement approach will sit within a changing supervisory structure. Under the announced single supervisor model, DIA will become the sole AML CFT supervisor from 1 July 2026. The underlying expectations, however, are already visible in current supervisory behaviour and recent enforcement outcomes.

Evidence from recent cases

Published enforcement outcomes show how supervisors respond when core AML CFT obligations are missing or weak. Business restrictions and formal action can follow from basic compliance failures, including:

·         An absent or non-compliant risk assessment

·         An absent or non-compliant AML and CFT programme

·         Failures to report when required

Official measures under the AML CFT Act

Supervisory responses are graduated. Measures commonly referenced in public outcomes and guidance include:

• Guidance and education for early-stage gaps where remediation is practical

• Formal warnings and notices setting out expectations and timeframes for corrective action

• Enforceable undertakings with binding commitments, monitoring, and public visibility

• Infringement notices for certain lower-level breaches where an infringement pathway exists

• Civil proceedings seeking court-ordered penalties and other orders

• Criminal proceedings for the most serious misconduct where statutory thresholds are met

• Public disclosure of outcomes to promote transparency and deterrence

  
  

Key themes for reporting entities

• Non-compliance alone can lead to supervisory action, even where no underlying money laundering is alleged

• Oversight cannot be delegated. Leadership remains responsible for AML and CFT outcomes

• Remediation is expected to be active and evidenced, not theoretical

• DIA will escalate where gaps are repeated, prolonged, or foundational

Practical test

If a supervisor arrived tomorrow, could you show:

• Your current risk assessment

• Your AML and CFT programme

• Records showing how the programme is implemented in practice

• Examples of monitoring decisions and reporting outcomes

Effective compliance preserves trust, reputation, and the integrity of the financial system.