Introduction to AML for clients


As of 1 July 2018, there are changes to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act). These changes apply to lawyers and their clients. This update provides an overview of the changes to the Act and how they affect the way Adderley Head will work with new and existing clients.

The Act has been in place in New Zealand since 2013. The addition of the provisions applying to lawyers, accountants and real estate agents reflects New Zealand’s commitment to deter and counter the effects of money laundering and financing of terrorism activities on both local and global communities.

Law firms and the services that we provide may be attractive to those engaging in criminal activity. Therefore, lawyers are now required to have processes in place to help detect money laundering and the financing of terrorism. As a law firm, we need to assess the potential risk we face from money launderers and those financing terrorism and must identify potentially suspicious activity.

Given the specialist nature of Adderley Head, these changes will have limited application to our clients. Even so, our terms of engagement reflect these changes.

On projects where we are asked to complete a “captured activity”, we need to verify information from existing and potential clients before we are able to perform legal services for them. This is known as “client due diligence”. For Adderley Head, a captured activity occurs if we receipt client funds into the Firm trust account for reasons other than payment of professional fees and disbursements invoiced by us.


What we will need from you when client due diligence is required

Client due diligence requires us to undertake certain background checks before providing services that involve a captured activity. We also need to take reasonable steps to ensure the information we receive from you is correct. The required information includes:

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

To confirm these details, we will need documents provided by a reliable and independent source. This includes photo identification, such as your passport or current driver’s licence and also documents that show your address, such as a current bank statement or utility bill.

If you are seeing us about a trust or company, we will need to collect information relating to the trust or company and also the people associated with it (such as directors, shareholders, trustees, and beneficiaries). While we can identify these people where possible, we will also rely on you to help us identify all persons for whom we need to carry out due diligence. We will make this as easy as possible by providing you with detailed guidance on what we need.

In some cases, such as where the client is a trust, we will need to ask for information on the source of the funds and source of wealth for a transaction. Again, we will make this as easy as possible for you by providing detailed guidance on what we need.


What happens if you cannot provide the required information?

It is likely that we will be unable to act for you if you cannot provide the required information. This applies even if you have been a client of ours for a long period of time.

Before we start working for you on a project involving a captured activity, we will let you know what information we need, and what documents you need to show us and let us photocopy.

If you have any questions or concerns about the new requirements, please do not hesitate to contact us.


Disclaimer: This is a brief summary for information purposes only and is not legal advice

 

Posted on Tuesday 7th August, 2018 at 09:24 am