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Anti-Money Laundering and Countering Financing of Terrorism Act

Anti-Money Laundering and Countering Financing of Terrorism Act

 

Phase two of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT) means compliance for most accountants, beginning on the 1st of October 2018. Accountants are obligated under the Act to meet a number of requirements to help combat money laundering and terrorist financing and to help police bring the criminals who do it, to justice. The AML/CFT Act Phase 2 affects accountancy firms like Bailey Ingham Ltd because the services accountancy firms and other professionals offer may be attractive to those involved in criminal activity.

From the 1st of October 2018 Bailey Ingham, along with other accountancy firms, must assess the risk they may face from the actions of money launderers and people who finance terrorism, and must identify and report suspicious activity. To make that assessment Bailey Ingham needs to obtain and verify information from prospective and existing clients about a range of things. This is part of what the AML/CFT Act calls Customer Due Diligence.

Customer Due Diligence Requirements

Customer due diligence requires an accountancy firm to undertake certain background checks before providing services to clients. Accountants must take reasonable steps to make sure the information they receive from clients is correct and so we will need to ask for documents that prove this.

From the start of October, we will need to obtain and verify certain information from clients to meet these legal requirements. This information includes a client’s full name, date of birth and address. To confirm these details documents that we will be asking clients to provide will be:

  1. Drivers licence or birth certificate
  2. Bank statement or utility bill (less than three months old showing a client’s current address)

For companies and trusts we will need to obtain information including these details for all Directors, Shareholders, Trustees and named beneficiaries.

For certain clients or activities, we may also need to ask for further information. This may include information confirming the source of funds for a particular transaction.

How this affects Bailey Ingham clients:

Our engagement letters have been modified to include a section on the Anti Money Laundering and Countering Financing of Terrorism Act and the information that we need to obtain. We will ask all new clients to fill out forms and provide information. We will have forms for clients to fill out in the following situations:

  1. When a new client joins the firm.
  2. Whenever we become the registered office for a company.
  3. Whenever we form a new company.
  4. Whenever we become the independent trustee for a Trust.
  5. When an existing client starts a new business activity or introduces substantial funds into their business.

In addition to this, Bailey Ingham Limited has registered with the Department of Internal Affairs. This is so that we can report suspicious transactions if they occur. All accountancy firms must appoint a Compliance Officer, and for Bailey Ingham Ltd, Cheyne Waldron (one of the firm’s directors) has taken on this role. Bailey Ingham has completed a risk assessment and produced a AML/CFT Programme Manual with policies and procedures to help our staff comply with the Act.

While we understand that the vast majority of our clients and New Zealanders in general are honest, law abiding citizens, New Zealand as a country needs to play its part in tackling this world-wide problem.

Please discuss any issues or queries you may have with one of our friendly staff or partners – we would be pleased to assist and answer any questions you may have regarding the changes taking place.

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Our offices are located in Otorohanga, Taumarunui and Te Awamutu

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