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New Zealand Says Regus Is Vulnerable To Criminals Using Its Virtual Offices


Shared workspaces and coworking have caused some concern over a lack of privacy, but what if too much privacy is also an issue?

The New Zealand Department of Internal Affairs issued a formal warning to IWG subsidiary Regus, claiming it was not in compliance with the country's Anti-Money Laundering/Combating the Financing of Terrorism regulations, the New Zealand Herald reports.

The New Zealand government alleged in the warning document that Regus hadn't been keeping adequate records, conducting sufficient due diligence or maintaining a risk assessment program according to AML/CFT standards, the Herald reports. Internal Affairs made clear that it was not accusing Regus of money laundering or associated crimes.

"Criminals may choose to use virtual offices based in New Zealand to trade on our clean reputation no matter where they are in the world," Internal Affairs AML/CFT Director Mike Stone told the Herald. "Reporting entities, in particular virtual office service providers that have overseas customers, need to hold detailed records on their customers and keep those records up to date."

Stone's concern is that terrorist or criminal organizations could sign up for a Regus membership in any other country and use that membership to do business that appears based in New Zealand. Regus, the warning contends, bears responsibility for all of its international membership and how it could affect New Zealand law.

The warning was the eighth AML/CFT citation issued by Internal Affairs, and the first for a nonfinancial company. The relatively new model for how coworking spaces can be used by international companies is only part of how coworking has become a massive influence on the global business community.