(Repeat story published on Friday, no change to text)
By Charlotte Greenfield
WELLINGTON, Sept 23 (Reuters) - A decision by major banks operating in New Zealand to cut ties with many money remittance operators is driving companies to increasingly extreme measures, with one firm planning to send millions of dollars of cash across to Pacific Islands using speed boats and plane cargo holds.
Robert Bell, the CEO of Auckland-based company KlickEx, said it had to figure out how to process $400 million in annual transactions after first Westpac and then state-owned Kiwibank decided they would not allow them to access banking services over concerns they might breach anti-money laundering rules.
People who cannot afford traditional banking services often use remittance payments to send small sums of money around the world. The Pacific is a top destination for payments from New Zealand, due to the country's large number of Pacific Island workers who send money home to their families.
Moving cash around the Pacific would involve a number of options, including airlines, to diversify the risk of any one transport method being targeted, said Bell.
He said he was buying two 130-foot high-speed boats, which could reach some Pacific nations overnight from New Zealand, and he said he was travelling to Europe next week to try to buy an oil tanker that would allow the speedboats to re-stock their diesel half-way through the journey.
"The boats are designed so we can run a boat overnight to Tonga with $3 to $5 million in cash on it," he told Reuters.
Banks in Australia and New Zealand have closed accounts with many remittance agencies since 2015 to reduce their potential liabilities resulting from remittance clients' illegal activities; but the move may only have shifted the problem out of sight of authorities.
Claire Piper, a compliance specialist who works mainly with remitters, said that many money transfer operators were too small to copy Klickex's methods and were instead turning to underground options, such as setting up bank accounts in their own names or in the names of specially created unregulated companies.
"They are just hustling like anybody else would to keep their business alive," said Piper
"In my experience, nearly all of them are taking what you'd call fraudulent options. They're lying to banks about their intentions with bank accounts and they're smuggling cash out in suitcases." (Editing by Nick Macfie)