Money laundering law changes for New Zealand

Just like our clothes, when money is laundered, it starts out dirty and comes out clean.

Money is put through a wash cycle to give it a squeaking
clean appearance, implying it’s from a legitimate source, to cover criminals’
tracks from illegal activities such as fraud, drugs and tax evasion.

Then, the untraceable dollars can be spent or used it to
fund further criminal activities.

Staggeringly, each
year about $1.35 billion from the proceeds of fraud and illegal drugs is
laundered through New Zealand businesses.

How
is New Zealand trying to stop money laundering?

To improve New
Zealand’s ability to tackle money laundering and terrorism financing, the
Government has made law changes that affect various businesses and professions.

The Anti-Money
Laundering and Countering Financing of Terrorism (AML/CFT) Amendment Act 2017
puts in place phase two of New Zealand’s AML/CFT laws.

The new laws:

·        
Extend
the current AML/CFT act to cover more businesses (including real estate agents
and conveyancers; many lawyers and accountants; some businesses that deal in
expensive goods; and betting on sports and racing)

·        
Make
some changes that affect phase one businesses (including banks, casinos and a
range of financial service providers) who had to comply with the act since
2013. 

The
law changes put in place practical measures to protect businesses and make
it harder for criminals to profit from and fund illegal activity.

They’ll also
safeguard and help New Zealand live up to our reputation as being one of the
least corrupt countries and a good place to do business.

Banks, other financial
services providers and casinos already do this, as they’ve had to comply with
the AML/CFT act since 2013.

Customer due diligence requirements

Recent changes mean
that from 1 October 2018, BUSINESS buddy
is required to collect and verify identification and other personal information
about our clients, individuals who own or control clients, and individuals
instructing us on behalf of clients.

This is called
customer due diligence (CDD) and is a type of background check very similar to
what you would have experienced already when dealing with your bank.

The AML/CFT law
does this because the services accounting firms and other professionals offer
may be attractive to those involved in criminal activity.

The law says that
accounting 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.

CDD verification
requirements are like what you may have encountered when dealing with banks and
lawyers, and BUSINESS buddy must sight
identifying documents like a passport or driver licence, and record that
information, even if we have an existing relationship with you.

Accountants 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.

When
do I have to provide information?

You’ll have to
provide identification if:

·        
You
become a customer or client of a business or professional that’s covered by the
act (for example, when you ask an accountant or lawyer to establish a company
or trust for you).

·        
There’s
a material change in your accounts, financial arrangements or your business
relationship with the business (like if the number or type of your transactions
change significantly).

·        
You pay
$10,000 or more in cash to a lawyer, accountant, conveyancer or real estate
agent.

·        
You pay
$15,000 or more in cash to a business that trades in high value goods
(jewellery, precious metals, precious stones, watches, motor vehicles, boats,
art or antiquities).

·        
You
send $1000 or more overseas.

What
information will I have to provide?

We need to obtain
and verify certain information from you to meet the new legal requirements.

Required
information includes confirmation of your:

·        
Full
name

·        
Date of
birth

·        
Address

To confirm the
details, you may need to provide your:

·        
Passport

·        
Driver
licence

·        
Birth
certificate

·        
A
recent bank statement or power bill

If BUSINESS buddy assists you with company or trust
work, you may need to provide extra information including:

·        
Details
about the people associated with the trust or company, such as the directors,
shareholders, trustees and beneficiaries.

·        
Where
and who the funds came from.

 

What
will BUSINESS buddy do with the information?

BUSINESS buddy keeps a secure record of your
information.

If we notice
something that’s a warning sign of money laundering or financing of terrorism,
by law we must report it to police.

If you have any
further questions regarding the changes, feel free to contact BUSINESS buddy on 0800 283 399.