You may have heard rumblings around Anti-Money Laundering and Countering Financing of Terrorism and wondered what this has to do with New Zealand. Well, it’s because New Zealand passed a law called the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“AML” for short). The purpose of AML reflects New Zealand’s commitment to the international initiative to counter the impact that criminal activity has on people and economies within the global community.
To date, AML has mainly affected banks and other financial or investment entities. From 1 July 2018 lawyers must do a number of things to help combat money laundering and terrorist financing and to help police bring the criminals who do it to justice. This is because the services law firms offer may be attractive to those involved in criminal activity. The purpose of AML is to deter criminals from using our services and help us detect them if they do. This will help New Zealand to live up to its reputation as one of the least corrupt countries in the world and a good place to do business.
What does this all mean for our existing clients?
AML requires us to collect and verify information to show that we know our client is who they say they are. This is known under AML as customer due diligence (“CDD”). There are transitional provisions for existing clients which mean we may not immediately need any further information from you.
We may however need to obtain and verify certain information from our clients to meet the legal requirements introduced by AML. This could occur if there is a material change in the nature or purpose of our relationship with you. If we need to collect information this will include collecting and verifying identity information about:
- our clients;
- any beneficial owners of our clients; and
- any person(s) acting on behalf of our clients.
We may also need to ask about the nature and purpose of the proposed work. Information confirming a client’s source of wealth or source of funds for a transaction may also be necessary. For overseas clients, companies and trusts we may need more information and will let you know what we require at the time we request it from you.
What happens if you don’t provide information when required?
If we are not able to obtain the required information, it is likely we will not be able to act for you. We don’t want this to happen as we like working with all of our clients and we are sure you don’t want to find yourself in this situation. At the moment we do not need you to take any action unless we contact you for further information. If we do contact you we will try and make the compliance process as easy as we can. However, if AML obligations apply we will need your co-operation to enable our relationship to work.
If you have any questions around how AML might affect our relationship please contact the partner or staff member you regularly work with, or feel free to contact our partner Greg Smith who is our AML Compliance Officer.
We thank you for your patience and understanding as we all adjust to AML.