Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML)
What is it and what does it mean?
New Zealand has joined a growing group of countries instigating certain measures in an attempt to make it more difficult for criminals to launder dirty money through the use of New Zealand institutions, and to prevent the funding of terrorist groups and activities.
AML initiatives have been in place since 2013, with the first institutions having to comply being banks and financial institutions. The second phase of the programme brings lawyers, accountants and real estate agents into the regime.
It means that institutions that are brought into the regime will be required to know their customers/clients better, learn more about how they accumulated wealth, keep better records about them, and report any suspicious activities to the Police.
You may have in fact already partaken in some of the additional AML requirements if you have opened a bank account in the last couple of years.
Lawyers are being brought regime as one of the so-called “gate-keeper” professions. Some criminals will try to use lawyers to help purchase, hold and move assets. This might involve, for instance, purchasing a property using money obtained from a criminal enterprise. By introducing a range of AML measures, we will deter these criminals from using our services and help us detect them if they do.
By putting these AML measures in place, we will be doing our bit to attempt to stop this criminal activity, as money is no good to criminals if they cannot use it. Once the New Zealand professions are on board and compliant, it will make New Zealand a very unattractive place for criminals to attempt to conduct business, and thereby assist to maintain our position as one of the least corrupt countries in the world.
What does this mean for us and our clients?
As mentioned above, one of the key changes for us will be getting to know our clients and their affairs better. This may involve requesting additional identification, proof of address, and perhaps even written evidence of where and how your wealth was accumulated.
This may sound daunting, but for the most of our (law abiding) clients, this will usually only involve what is known as Customer Due Diligence – sighting and retaining a copy of your identification and proof of address at the outset of a legal instruction. This is the same documentation you would need to show a bank if you wanted to open a bank account.
The new law doesn’t discriminate between new clients and clients for whom we have acted for decades. Therefore, unfortunately even for those we know very well, we will still need to process the Customer Due Diligence requirements at the commencement of the next instruction from you.
There will be some situations where we are required to seek further information and documentation, as set out in the legislation. The two most common situations will be when acting for Trusts and overseas clients from certain jurisdictions. In these instances, we will discuss with you what further information and documentation we require.
The requirements of this legislation are strictly enforced, and overseen by the Department of Internal Affairs, so until the required information is provided, we are unable to act on any instruction.
Our goal is to try and make this process as easy and seamless as possible for our clients, while still abiding our statutory requirements under this legislation. We very much appreciate your cooperation in providing the information we request.
If you have any questions at all, please do not hesitate to contact us.