AML Changes and How this May Affect our Business Relationship

August 1, 2018

Why is this happening?

The international community has made the fight against money laundering and the financing of terrorism a priority, and the New Zealand Government is committed to being part of this initiative.  The Government has implemented AML/CFT in a phased approach since 2013 and this year sees lawyers, accountants and real estate agents included for the first time.

The law changes aim to put in place practical measures to help prevent money laundering, make it easier for authorities to find out where ‘dirty’ money may have come from, prosecute criminals, seize illegally earned money and assets, and stop crime and terrorism.  It will also help New Zealand to live up to its reputation as being one of the least corrupt countries in the world and continue to be a good place to conduct business.

What services are under the scope of this legislation?

An accounting practice that, in the ordinary course of business, carries out one or more of the following activities, is required to comply with the AML/CFT Act:

  • Acting as a formation agent of legal persons or legal arrangements.
  • Acting as, or arranging for a person to act as, a nominee director or nominee shareholder or trustee in relation to legal persons or legal arrangements.
  • Providing a registered office or a business address, a correspondence address, or an administrative address for a company, or a partnership, or for any other legal person or arrangement (unless it is ancillary to the provision of other services which are not in scope).
  • Managing client funds, accounts, securities, or other assets (other than sums paid as fees for professional services). This includes the use of an accountant’s trust account,
  • Engaging in or giving instructions on behalf of a client to another person for:
    • Any conveyancing; or,
    • The transfer of a beneficial interest in land or other property; or,
    • A transaction on behalf of any person in relation to the buying, transferring or selling of a business or legal person and any other legal arrangement; or,
    • A transaction on behalf of a client in relation to creating, operating, and managing a legal person and any other legal arrangement.

Implications for you as our client

If we provide you with any of the above services, we must collect and verify information to demonstrate that we have confirmed you are who you say you are.

The AML/CFT Act prescribes what we must do to complete customer due diligence (CDD) checks.  This includes collecting specific information, such as proof of identity and verifying your physical address.  In certain circumstances we will also be required to obtain evidence of your source of wealth, or the source of funds.  If you are an overseas client, company or trust, we may need more information and we will let you know what we specifically require.

As an existing client we may already hold information that satisfies some of our CDD requirements.  We will only request the documentation we need to complete the CDD process.

If you become a new client, we will need to complete our CDD checks before we provide any of these services.  This will form part of our new client acceptance process.

We understand that you may view this as an intrusive process, but we will aim to make this as easy for you as possible.  This does rely on your co-operation and the provision of requested information in a timely manner. Our business relationship with you is highly valued, but if we cannot complete the required checks we will unfortunately be unable to provide the services to you.

If you have any concerns regarding these new requirements, please do not hesitate to contact Natasha Buckby on nbuckby@nexiachch.co.nz, or your Partner at Nexia that you normally deal with.

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