The Act was passed in October 2009 and came into effect in June 2013.
From 1 October 2018, accountants and providers of accounting services in New Zealand are subject to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (Act). Under AML, all law and accounting firms performing captured activities are required to perform customer due diligence and account monitoring, keep records, and report any unusual or suspicious transactions.
The legislation introduces regulations that require accounting firms to assess and mitigate the risk of the accountancy firm being used to facilitate money laundering and terrorism financing and to identify potentially suspicious activities. The purpose of the Act is to detect and defer ML and FT. Certain Accounting, Insolvency and Business Recovery activities are captured by the AML/CFT Act and deem the firm a reporting entity. Reporting entities have obligations to complete risk assessments, due diligence and to develop an AML/CFT program.
We are conscious of our role as gatekeepers to the financial system and believe in having robust controls in place to ensure every new customer is on-boarded only after following our Customer Due Diligence procedures. We have appointed an AML/CFT compliance officer.
We recognise one of the most important tools available to us to assist in the prevention and detection of ML/FT is to have well-trained staff alert to the potential risks of ML/FT. Our policy, procedure, and control are designed on this basis.
Captured Activities
Certain insolvency related work carried out by McDonald Vague in the ordinary course of business is not defined as a captured activity and is not specified in the definition of a designated non-financial business or profession (s5 of the Act). Certain activities are captured. We consider the following activities are captured:
Formal appointments under the Receiverships Act 1993
The captured activity is managing client funds, accounts, securities and other assets.
Voluntary Administration under the Companies Act 1993
The captured activity is managing client funds, accounts, securities and other assets.
Solvent liquidations under the Companies Act 1993
The captured activity is managing client funds and distributing surplus funds to beneficial owners
Insolvent liquidations under the Companies Act 1993
The captured activity is realising assets, managing client funds and distributing funds (if control is held over the flow of funds)
Other Activities – statutory management, sale of assets
The captured activity is managing client funds or assets.
Customer Due Diligence
The information we require will be on a case by case basis and will be dependent on the nature of the appointment, if the appointment is a captured activity, and the transactions that are involved. For example, we will likely require information on the source of funds in solvent liquidations.
The due diligence process must be completed by us before providing, or continuing to provide, services to clients.
The customer due diligence process (CDD) will involve collecting and verifying identification and additional information necessary to understand the nature of our client’s business and the purpose of the proposed work. In some circumstances, we will also be required to obtain information about the client’s source of wealth and/or funds.
The information that we are required to collect will depend on the nature of the client (for example, whether they are an individual, company, trust, limited partnership, incorporated society and nature of the appointment – liquidation, voluntary administration, receivership etc..) and if the entity is a solvent or insolvent entity and the nature of any proposed transactions. At a minimum we will need information and documentation to help us to identify our client; the beneficial owner(s); and the people acting on behalf.
We consider our client is:
- Solvent Liquidations – the company in liquidation and the appointor and the beneficial owners.
- Insolvent Liquidations – the company in liquidation and the appointor and the beneficial owners (shareholders or directors if there is a prospect of recovery of 25% of the realisable assets to the beneficial owners).
- Receivership – the company in receivership and the appointor.
- Voluntary Administration – the insolvent company and appointer and the business owner if the business owner will continue to hold >25%.
- Other – The appointor and the company.
A beneficial owner is someone who owns more than 25% of the customer or has effective control.
In addition, standard customer due diligence requires that we must also obtain:
- information on the nature and purpose of a proposed business relationship between a customer and a reporting entity and
- sufficient information to determine whether the customer should be subject to enhanced customer due diligence.
Information that we need
We will need to obtain and verify certain information to meet these legal requirements. This information includes:
- Full legal name
- date of birth;
- country of residence; citizenship;
- physical address or registered office
- if the person is not the customer the relationship to the customer;
- company ID and registration number and registered office
- any other information prescribed by the regulations
To confirm these details, documents such as your passport or driver’s licence (primary photographic identification), or full birth certificate (primary non-photographic identification) and documents that show your address, such as a current bank statement or utility bill, 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 and beneficiaries).
We will endeavour to make the process as easy as possible and we will provide further details as what documentation can be provided to meet these requirements.
We may require you to provide certified copies of the relevant documentation to manually verify your identity.
Please do not be concerned if we ask for more information or documents. We are legally required to obtain this information from all clients.
How will we use your personal information?
We will treat all your personal information as confidential. We may need to disclose this information to:
- our contractors or agents; and
- other organisations, including other parties in the matter, a court, and law enforcement and government agencies who process transactions or perform regulatory functions, but only to carry out your instructions, to fulfil our professional duties, to exercise our rights under these Terms, or to comply with a legal requirement.
We will comply with all applicable laws (including the Privacy Act 1993) when we collect, use, and disclose personal information about you. We will sometimes need to collect, use, and disclose personal information about your employees, directors, or other people associated with you or with your transactions (including any principals or beneficiaries for whom or for whose benefit you are acting) to carry out your instructions. Please make sure that these people are aware that our acting for you may involve collecting, using, and disclosing personal information about them. In most cases they can request access to the personal information we hold about them.
Our obligations under the Act
We may:
- refuse to enter a business relationship;
- delay, block, or refuse to process a transaction (including by refusing to handle and deposit money on trust for you); and
- report a transaction, without notice if: the required information or documents are not provided; or it is suspected that the business relationship or transaction is unusual, may breach any applicable law, or may otherwise relate to conduct that is illegal or unlawful in any country.
How can we help further?
If you have any questions about these changes and how they will affect you, please contact our AML/CFT compliance officer, Colin Sanderson This email address is being protected from spambots. You need JavaScript enabled to view it. or phone 07 838 0908.
