Anti-Money Laundering Legislation – Extended Application to Lawyers and Clients

Anti-Money Laundering Legislation – Extended Application to Lawyers and Clients

From 1 July 2018, the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“Act”) applies to Malloy Goodwin Harford and other New Zealand law firms.

To date, this legislation has mainly affected banks and investment advisers.  As from 1 July, it will apply to most New Zealand law firms including ours. As from 1 October this year it will apply to accountants, and as from 1 January next year it will apply to real estate agents.

The principal purpose of the anti-money laundering legislation is to increase the likelihood of the detection and deterrence in New Zealand of money laundering and the financing of terrorism.

As from 1 July this year, Malloy Goodwin Harford in its dealing with its clients, must assess the money laundering risk we may face in our business and identify any potentially suspicious activity that may constitute money laundering. To make that assessment the legislation requires our firm to carry out what is referred to as “customer due diligence” on new and existing clients. We are required to do this regardless of how long we have acted for you, or how well we know you and the knowledge we presently have concerning your financial circumstances.

How the Act affects our existing clients

You may recall in recent years your bank requiring from you physical evidence of your identity, residential address and the like to verify you.

As from 1 July, Malloy Goodwin Harford will also be obliged to collect information about a client’s identity (including full name, date of birth and address) when receiving instructions to undertake new work.

In most cases, we will simply need to see your passport and a recent bank statement or utility bill addressed to you with your home address on it. If it is not possible for you to bring those items to us to view and copy, we will be required to obtain from you copies which have been certified as true copies by a lawyer or other person who the legislation considers appropriate to certify copies of documentation.

In the case of a client trust, we will be obliged to obtain that identification information from the trustees of the trust, and we will also be required to obtain information concerning the source of the trust’s wealth, and the source of funds for any proposed transaction.

We may not be able to proceed with new instructions until we receive evidence of identification, and in some cases information concerning the source of wealth or funds as well.

The above summary touches only briefly upon the compliance requirements imposed upon our firm and other law firms by this legislation. When receiving new instructions from you in the future, we will let you know exactly what we are required to obtain from you.