Anti-money laundering and counter-financing of terrorism update

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Money laundering

Don’t be surprised if your lawyer now asks you to prove that you are who you say you are.  And, if you refuse to provide the required identity verification information, your lawyer could be forced to file a suspicious activity report about you to the Government’s Financial Intelligence Unit!

You may recall from previous articles on the legislative changes that, from 1 July this year, lawyers are required to comply with New Zealand’s anti-money laundering and counter-financing of terrorism (AML/CFT) laws.  This means that when undertaking work in certain regulated areas, including conveyancing, business sale and purchase, company incorporation and trust formation, lawyers must verify the identity of their clients.  So if you instruct your lawyer in the regulated areas of work, then you will have to provide your lawyer with evidence of your identity, such as your passport, and your address, such as a rates bill.

Furthermore, when you are deemed to be a riskier type of client, for example if you are a family trust or you are from an overseas country that does not have AML/CFT regulations, then your lawyer will be required to carry out enhanced customer due diligence on you.  This will involve the additional step of proving where you have obtained the funds used in the transaction and your wealth generally.  You will be required by your lawyer to provide documentary evidence to prove your source of funds and wealth.  This could involve, for example, providing your lawyer with wage slips from your employer or sale and purchase agreements for properties you have acquired and sold.

Banks have for several years now been complying with the AML/CFT laws.  Accountants will be required to comply with the laws from 1 October 2018 and real estate agents will have to comply from 1 January 2019.  For people in New Zealand, having to prove that you are who you say you are and also show in some circumstances that your wealth has come from legitimate sources, will soon therefore become an accepted part of undertaking your personal affairs and business activities.

At Gaze Burt we have put in place systems to make compliance with the new anti-money laundering and counter-financing of terrorism laws as painless as possible for our clients. If you have queries or concerns in regard to the new legislation, please get in touch with your usual Gaze Burt contact, Daniel Smith, or Sarah Hughes.

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Daniel Smith
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