Measures to Identify and Prevent Money Laundering and Terrorist Financing in New Zealand
The New Zealand Government estimates the proceeds of fraud and illegal drugs totalling about $1.35 billion each year is laundered through New Zealand businesses.
In order to comply with its international obligations and to improve New Zealand’s ability to identify and prevent money laundering and terrorism financing, the Government has implemented changes to the law which affect various businesses and professions.
The Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Amendment Act 2017 establishes "Phase 2" of New Zealand's AML/CFT laws.
The newly amended law extends the current AML/CFT Act to cover businesses and professions which include, among others, real estate agents and conveyancers, lawyers, and accountants.
The new law change not only makes it harder for criminals to profit from and fund illegal activity but also ensures New Zealand meets its obligations to the international community.
The law will come into effect for lawyers in July 2018. Please note our firm is already in the process of implementing changes discussed below.
Implications for our Clients
In general, this law firm (as with other law firms) will now be required to attend to the following, on an ongoing basis:
- verify the identity of customers before providing any service covered by the AML/CFT Act and in certain circumstances verify the source of funds our clients intend to use for their transactions.
Identification requirements are:
drivers’ licence and bank card;
bank statement or power bill
If you represent a company or trust, you will have to provide extra information like:
4. evidence of who you are representing (i.e. the beneficial owners who effectively control or
benefit from the trust or company).
- submit a Prescribed Transaction Report to the Police Financial Intelligence Unit (FIU) if any of our clients wish to conduct a transaction in cash that is $10,000.00 or more, or make an international wire transfer of $1,000.00 or more.
- monitor client accounts, if funds are being held in an interest bearing trust account by us, and report any suspicious transactions or activity to the FIU.
If our clients are unable or unwilling to provide any of the details or documents requested, then in most cases our firm will not be able to assist our clients any further with the proposed transaction/s.
Our firm will still keep a secure record of our clients’ information. However if we notice something that we consider to be suspicious and possibly a sign of money laundering or financing of terrorism then by law we must report it to the Police Financial Intelligence Unit for its assessment.