If you have recently tried to start a new investment or open a bank account, you would have been required to prove your identity, location of residence, and perhaps proof of your source of funds. These requirements are all part of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (Act). This Act has been widened (via the Anti-Money Laundering and Countering Financing of Terrorism Amendment Act 2017) to include lawyers from 1 July 2018, accountants from 1 October 2018, Real Estate agents from 1 January 2019, and High Value Dealers from 1 August 2019.
The purposes of the Act are to:
- detect and deter money laundering and the financing of terrorism (ML/FT);
- maintain and enhance New Zealand’s international reputation by adopting, where appropriate in the New Zealand context, recommendations issued by the Financial Action Task Force (FATF); and
- contribute to public confidence in the financial system.
According to the Ministry of Justice, an estimated $1.5 billion is laundered in New Zealand every year and the penalties for non-compliance by accountancy practices are severe (up to $5m).
Effective from 1 October 2018, all accountants have had to:
- appoint an AML/CFT compliance officer within the practice;
- have a written risk assessment and AML/CFT programme which contains policies and procedures, and get them audited, generally, once every two years;
- Meet additional regulatory reporting obligations.
All new clients who are engaging us, for whom we provide ‘designated activities’ as listed in the Act, will be required to provide confirmation of identity, address and, in some circumstances, details regarding source of funds (or wealth).
If you are an existing client for whom we provide ‘designated activities’ and there is a material change in the services we provide or if your situation changes, we will contact you to collect the required information to comply with AML requirements. We may need to update your engagement letters and verify your identity. The level of detail and proof we need will be determined by the services we provide to you and whether you engage with us as an individual, company or family trust.
We understand that these processes may be inconvenient and a source of frustration, but we are legally obligated to comply with the Act. We use professional providers to streamline our process in this area, and our clients’ assistance in helping us meet these legal obligations is very much appreciated.