UPDATE 1-New Zealand warns Westpac unit for breaching anti-money laundering laws

(Adds details on warning, Westpac NZ response)

Aug 11 (Reuters) - The Reserve Bank of New Zealand (RBNZ) on Wednesday issued a formal warning to Westpac Banking Corp’s local unit for failing to report almost 8,000 transactions as required by anti-money laundering and counter-terrorism laws.

The warning comes as RBNZ releases findings from a review of New Zealand-based banks, which was undertaken after Australia’s financial crime agency in 2019 accused no.2 lender Westpac of enabling millions of payments to people exploiting children.

Under New Zealand’s anti-money laundering and counter-terrorism laws, companies are required to report transactions such as international wire transfers to the police’s financial intelligence unit.

Westpac “configured its prescribed transaction reporting systems in a way that failed to detect and report all eligible international wire transfers,” the RBNZ said, but found that other procedures and controls at the bank were “satisfactory”.

The Australian lender’s unit failed to report corporate transactions to overseas recipients between July 2018 and February 2019, RBNZ said.

“We take these matters very seriously. This issue arose from an inadvertent error with our reporting system which is now fixed,” a spokesperson for Westpac New Zealand said in an e-mailed statement.

“Upon identifying the issue, we proactively reported it to the RBNZ. We continue to work with the RBNZ on strengthening our systems further,” the spokesperson said. (Reporting by Shashwat Awasthi; Editing by Shailesh Kuber and Devika Syamnath)