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Bank’s “debanking” of MTOs in New Zealand

Cento Veljanovski was retained as an expert in an action in the New Zealand High Court brought by a FX money transfer organisation (MTO) which was threaten with closure of its account by Kiwi bank as part of its so-called “derisking” in response to anti-money laundering regulations (the AML/CFT Act).  Cento participated in a hot tub giving evidence that the actions of the banks in closing MTO accounts, had the “effect” of substantially lessening competition under section 27(2) of the Commerce Act 1986. While the court (E-Trans v Kiwibank) accepted Dr Veljanovski’ s evidence and analysis, it concluded that legally it could only consider the closure of the one bank account, and not the other 100 closed or being closed by Kiwibank, and therefore the defendant’s action did not SLC. 

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