On 1 July, law firms will become subject to the requirements of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT). We have been hard at work implementing these requirements into our client experience. This article is intended to outline what the changes will mean for you, as our client.
What is AML/CFT?
AML/CFT is part of a global movement for countries to introduce practical measures aimed at eradicating the ability for criminals to profit from their crimes, and also to prevent the supply of money to terrorist organisations.
The Government is introducing these measures in stages. You may have noticed it has already been implemented in particular businesses, such as banks and casinos. Law firms are one of the next industries to be subject to the AML/CFT requirements.
Law firms in particular have been identified as a way in which criminals attempt to move money and assets. The measures being introduced are intended to help us to detect such activity, and thereby contribute to the global effort of deterring corruption and crime.
So what will it mean for me, as a client?
The new measures under AML/CFT will require us to collect and verify more information about our clients, to ensure we know exactly who they are, and what it is they are doing.
In particular, it will require us to conduct what is called “customer due diligence” (CDD) on our clients. This will come in different forms for different transactions or legal work, but will usually mean that we will be required to collect and verify your identification and physical address. Just like at the bank, this will typically involve sighting and storing copies of an acceptable form of ID and some form of proof of physical address.
In some circumstances, depending on the nature of the work or the entity/individual involved, we will be required to make more extensive inquiries. This may involve us asking you some questions about the source of your wealth, or the source of funds being used in a transaction.
When using entities like companies and trusts, you will typically be required to identify the actual individuals involved in the entity, and we will then conduct CDD on those individuals.
Is there anything I need to be doing now?
For existing clients of Cavell Leitch, once the AML/CFT requirements are implemented, we will only require this information when you provide a new instruction to us, and where our current records are insufficient to satisfy the requirements.
For any new clients joining us, we will be incorporating these measures into our new client engagement procedure. This may require you to come into our office the first time we act for you, with the necessary documentation.
We have been working hard to implement these new requirements as smoothly as possible into our client experience. We hope you will recognise the importance of these measures in deterring criminal activity in New Zealand and maintaining its international reputation as a safe and reliable place to conduct business.
If you have any questions about what this might mean to your relationship with Cavell Leitch, do not hesitate to contact a member of our team.
Copyright © Cavell Leitch. All rights reserved. Redistribution is only permitted with express written permission. For enquiries please contact us. This article by its nature cannot be comprehensive and cannot be relied on by clients as advice. It is provided to assist clients to identify legal issues on which they should seek legal advice. Please consult the professional staff of Cavell Leitch for advice specific to your situation.