From 1 July 2018, we will be asking prospective and existing clients for more information than usual.
This is because New Zealand has recently made changes to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the AML/CFT law). These aim to make New Zealand a safer place to do business and make it harder for criminals and terrorists to fund illegal activity.
The AML/CFT law will apply to all law firms in New Zealand as of 1 July 2018.
This means that Armstrong Murray needs to have procedures in place to detect and deter money laundering and terrorist financing activities, similar to the processes that banks and financial institutions currently follow.
Why do law firms need to put these processes in place?
There have been instances in New Zealand where criminals have laundered illegal funds through lawyers’ trust accounts into assets that appear to be genuine, such as property. When this occurs, it becomes difficult for the authorities to trace the source of the funds.
In other instances, money has been funnelled into terrorism via a law firm to protect the identities of those involved.
There is no suggestion that lawyers were complicit in such activities, but they were used as unwitting agencies.
What does the AML/CFT law mean for you?
Before providing services to you on any new matter, Armstrong Murray will need to gather information, including:
- The nature and purpose of the work you are asking us to do
- Personal information, such as your full name, date of birth, address and IRD number
- Information about your business or trust, including the people associated with it
- The source of funds for any transactions
To verify this information, we will need to ask you for certain documents such as your passport, driver’s licence and letters confirming proof of address.
There is no need to feel alarmed when we ask you for more information. We are legally required to obtain these details from everyone, even if they’ve been a client of the firm for decades.
If you are unable to provide us with the information required, it is likely we will not be able to act for you.
In addition, if we are depositing funds into a bank account on your behalf, we will require confirmation of the account details (including the account holder) by way of a bank statement or similar. In some cases, we are also required to report deposits of monies into overseas accounts to the Department of Internal Affairs (being the regulatory entity for AML compliance by lawyers).
Thank you for helping us play an important part in bringing criminals to justice and protecting New Zealand’s reputation as a safe place to conduct business.
This article is brief and general in nature. You should not treat this article as legal advice and should seek professional advice before taking any action in relation to the matters dealt with in this article. Armstrong Murray accepts no liability for losses suffered by any person or organisation who may rely directly or indirectly on this article.