https://www.stuff.co.nz/national/crime/117751875/narcos-at-heart-of-145-billion-nz-money-laundering-industry

New Zealand's local money laundering trade is worth at least $1.35 billion — not even counting the dirty money domestic tax cheats stash away.

Police said local drug networks linked to foreign cartels were a major factor in the illegal trade.

"Rapidly evolving" Organized crime groups were the main driver of money laundering, the police Financial Crime Group's Craig Hamilton wrote in a newly published risk assessment report.

High-profile recent laundering cases included that of lawyer Andrew Simpson and Comancheros Motorcycle Club vice-president Tyson Daniels, who both pleaded guilty in Auckland on Wednesday to money laundering.

In Australia, Westpac was engulfed in scandal this week after regulators accused it of more than 23 million breaches of money laundering rules.

The police Financial Intelligence Unit said global crime networks linked to New Zealand, such as transnational drug distribution cartels, were among key players in the money laundering scene.

Overseas criminal organizations "not generally connected to New Zealand" but who might try to funnel funds through the country were also influential, police said in the new money laundering and terrorism report.

Laundering networks trying to move funds through New Zealand's financial system or legal structures were the third major offshore threat.

Locally, trade in methamphetamine and other drugs drove huge profits for some local crime groups "aligned to complex transnational networks", Hamilton said in the risk assessment.

In September, the police National Organized Crime Group told Stuff foreign drug barons had changed the landscape of domestic meth and other drug dealing.

Detective Superintendent Greg Williams said Jalisco Cartel New Generation (Cartel Jalisco Nueva Generación – CJNG), was one foreign group with business interests in New Zealand.

Stuff has also recently learned NZ Customs specialists were monitoring the threat of Mexican cartels and Latin American money laundering activities.

"In addition to drugs, we recognize that fraud and other income generating crimes continue to occur [and] terror-related crime is not something that New Zealand is immune from," Hamilton added.

Police said the $1.35b figure did not include money local tax cheats laundered.

And financial crime experts also admitted the impact of offshore money laundering on New Zealand was unknown.

In New Zealand, auctioneers, bullion dealers and other companies dealing in high-value goods now had some cash transaction reporting obligations.

The new risk assessment report said the law had also imposed local reporting obligations on lawyers, accountants, conveyancing practitioners, estate agents, and the Racing Industry Transition Agency.

The obligations were enforced with what police called "a staggered implementation" between 2018 and this year.

Data about banknotes in circulation, wire transfers, the economic cost of burglaries, value of drug consumption, and estimates based on prior Australian money laundering research were cited in the new report.

"The actual transactional value of money laundering is likely to be several times the [estimate] as launderers need to move funds through multiple transactions to place, layer and integrate proceeds of crime," the Financial Intelligence Unit added.

The new report cited International Monetary Fund (IMF) data indicating proceeds of crime worldwide generated roughly $2.6 to $6.5 trillion.