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IMPORTANT CLIENT UPDATE: Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT)

Posted by Julie Knowles on 22 May 2018 | Comments

Anti-Money Laundering and Countering Financing of Terrorism                        

Why we need to ask you for information

New Zealand has passed a law called the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“the AML/CFT law” for short). The purpose of the law 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.

Recent changes to the AML/CFT Act mean that from 1 July 2018 lawyers must comply with its requirements.

Lawyers must do a number of things to help combat money laundering and terrorist financing.  This is because some of the services law firms and other professionals offer could be utilised by those involved in criminal activity.

The legislation requires law firms and other professionals to assess the risk they may face from the actions of money launderers and people who finance terrorism and must identify potentially suspicious activity.

To make that assessment, lawyers must obtain and verify information from prospective and existing clients about a range of things. This is part of what the AML/CFT law calls “customer due diligence” and is a similar obligation to that imposed on banks who have been subject to this regime for some time now.

Customer Due Diligence Requirements

Customer due diligence requires a law firm to undertake certain background checks before providing services to clients. Lawyers must take reasonable steps to make sure the information they receive from clients is correct, and so they need to ask for documents that verify this information.

So, we will need to obtain and verify certain information from you to meet these legal requirements. This information includes:

• your full name; and
• your date of birth; and
• your address.

To confirm these details, documents such as your driver’s licence or your birth certificate, and documents that show your address - such as a current bank statement - will be required.
If you are seeing us about company or trust business, we will need information about the company or trust including the people associated with it (such as directors and shareholders, trustees and beneficiaries).

We may also need to ask you for further information about the nature and purpose of the proposed work you are asking us to do for you. Also information confirming the source of funds for a transaction may also be necessary to meet the legal requirements. 

If you cannot provide the required information 

If we are not able to obtain the required information from you, it is likely we will not be able to act for you.  Because the law applies to everyone, we need to ask for the information even if you have been a long-standing client of Harmans.

Before we start working for you, we will let you know what information we need, and what documents you need to provide to us.

Please let us know if you have any queries regarding this, or if we can provide you with any legal assistance.

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