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AML: New Client Information Requirements for Law Firms

Written by Kelly Seabourne, PARTNER on June 6th, 2018.    

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As from 1 July 2018 all law firms will be required to collect and verify information from prospective and existing clients about a range of matters, in order to comply with their legislative obligations to help combat money laundering and terrorist financing.

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 law 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, and to help Police bring the criminals who do it to justice. The AML/CFT law does this because the services law firms and other professionals offer may be attractive to those involved in criminal activity.

The law says that law firms and other professionals must 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”.

Customer due diligence requirements

Customer due diligence requires a law firm to undertake certain background checks before providing services to clients or customers. 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 show this.

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

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

To confirm these details, documents such as your passport or driver’s licence and birth certificate, and documents that show your address - such as a recent utility account or 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, settlors, protectors and beneficiaries).

We may also need to ask you for further information. We will need to ask you about the nature and purpose of the proposed work you are asking us to do for you. Information confirming the source of funds for a transaction and source of wealth for certain ownership structures (compulsory for trusts) may also be necessary to meet the legal requirements. We must also take reasonable steps to make sure the information we receive is correct and we may need to ask for further documents to show this.

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 client of ours for a long time.

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

Please contact the lawyer or legal executive who will be undertaking your work, if you have any queries or concerns.



Disclaimer
The information contained in this publication is of a general nature and is not intended as legal advice.  It is important that you seek legal advice that is specific to your circumstances.
 
All rights reserved © Jackson Russell 2018

 
 

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