The Anti-Money Laundering and Financing of Terrorism Act
Advice to clients on Dawson Harford’s compliance requirements
As part of New Zealand’s international commitment, the Anti-Money Laundering and Countering of Financing of Terrorism Act (the “Act”) was enacted in 2009.
Phase 1 of the Act came into effect in 2013 and placed obligations on reporting entities (such as financial institutions) to have procedures and systems in place to detect and deter money laundering and financing of terrorism. From 1 July 2018, New Zealand law firms also became subject to the Act.
What does this mean for our clients?
The Act requires law firms to ‘know our clients’ and to collect and verify information to show that their clients are who they say they are. In practice, this means that we are required to conduct customer due diligence on our clients (including, in certain circumstances, those clients we have known and have had a relationship with over a number of years) as well as their beneficial owners and any person who is acting on behalf of them. This will involve collecting and verifying identification and additional information necessary in order to understand the nature of our client’s business and the purpose of the proposed work.
The type and extent of the information required to be collected will depend on the nature of the client (i.e. an individual, company or a trust); however, in general:
- in the case of an individual, we will require information that confirms that individual’s full name, date of birth and address, such as a certified copy of an individual’s passport or driver's licence and a bank statement or utility bill;
- in the case of a trust or company, we will also ask for details of certain individuals who are connected to the trust or company (such as trustees, directors and shareholders) as we will need to verify the identity and address of these individuals as well; and
- in some cases, we will also be required to obtain evidence of our client’s source of wealth or funds.
How to comply with these requirements
We intend to make this process as easy and efficient as possible for our clients and will provide you with clear guidance about what information and documentation we require. You will also be able to provide the documentation in person by visiting our office or by providing PDF scans of certified copies of original documentation, followed in each case by the original certification.
Please note that it is important that we receive this information and documentation from you as soon as is possible as the Act provides that without such information and documentation, we will not be able to act for you.
If you have any queries or concerns about the Act, such as how it will apply to you or your business, please do not hesitate to contact your usual contact at Dawson Harford.