Certification under AML-CFT legislation - you may need another stamp or two
Lawyers often certify that a copy of a document is a true copy of the original. To save the fingers of the certifying practitioner, many law firms have had special stamps made up. These communicate the message that the original has been sighted, that the document is a true copy/photocopy of the original and that the certification has been signed by someone who is a barrister and solicitor of the High Court of New Zealand.
Such certification is generally accepted without question by the organisations which require authentication of the copy. The prefabricated stamps sit on a desk or in a drawer as part of the office landscape.
It is recommended practice that an organisation which has any doubts about the authenticity of the certification should check with the certifier. This follows the discovery in mid-2012 of forged certification purporting to be from a lawyer working for a New Zealand law firm on copies of passports which were used to open bank accounts.
The New Zealand Law Society issued a warning to banks and other institutions that they should be careful and check back with a law firm if they had any doubts about whether certification was genuine.
While the forged stamp – which stated “We certify that this is a true copy of the original” – does not appear to have been used again, it indicates that care is needed for what is a routine (and usually uncharged) service provided by lawyers.
From 30 June 2013 when the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 came into force, a new dimension was introduced to some of the certification requirements. It now appears that prefabricated stamps used for routine certification may not be adequate when the certification is for the customer of a reporting entity under the Act.
At present “reporting entities” regulated by the Act are certain businesses offering financial and related services. They include financial institutions, casinos, financial advisers and trust and company service providers.
Reporting entities are now required to conduct customer due diligence on their customers, their customers’ beneficial owners and anyone acting on behalf of their customers. There are two elements to this: (1) “identifying” the customer; and (2) “verifying the identity” of the customer. To enable identity verification, the customer must provide certain identity information to the reporting entity and prove it. Lawyers, in the role of “trusted referees”, are often asked to certify identity documents in line with the duty of the reporting entity to verify the identity information.
At this point it is important to stress that legal professionals and some other professionals are expressly exempted from the Act. While this exemption will be repealed in the future, lawyers currently have no statutory obligations under the Act. Their involvement – and the wording on the stamps – comes most often when they act as “trusted referees” who certify identity documentation.
Since June 2013 there has been some doubt over the wording to be used by lawyers certifying documentation for reporting entities such as banks. A degree of complexity has been introduced through the Act allowing reporting entities to either adopt an identity verification code of practice or to adopt “equally effective” procedures which meet notification requirements.
The Amended Identity Verification Code of Practice 2013 has been approved by the Ministry of Justice, and it appears that most reporting entities have not sought to disapply the Code and have adopted it. The Code provides a suggested best practice for all reporting entities conducting name and date of birth identity verification on customers who are natural persons and who have been assessed to be low to medium risk.
Because of the lack of prescription for the certification process, the New Zealand Law Society has received inquiries from lawyers about the wording they should use – and questioning whether the well-used certification stamps are adequate.
After seeking legal advice the Law Society has released a new title in its Practice Briefing series: Certification under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. This can be downloaded or viewed at my.lawsociety.org.nz/in-practice/practice-briefings.
The Practice Briefing notes that when certifying a document as a trusted referee, a lawyer must sight the original documentary evidence and include his or her name, signature, reference to his or her qualification as a barrister and solicitor and the date of certification.
The Code states that the wording used by the trusted referee to certify the documents must be “to the effect that the documents provided are a true copy and represent the identity of the named individual (line to the presenter)”.
The Code also appears to require a visual check of the identity of the customer against appropriate photographic identification.
And the wording to be used? It is clear that there is no absolute rule on the wording that lawyers acting as trusted referees should use when certifying documentation. The wording to be used must satisfy the particular reporting entity’s requirements.
If a reporting entity decides that it will only accept a certified copy that has adopted specific wording, the customer should ask the lawyer to adopt the prescribed wording. If this is so, the standard certification stamps used by a law firm will not be valid if the wording differs from that required by the reporting entity.
The Practice Briefing recommends that if a reporting entity does not require any specific wording, the lawyer should adopt wording that the reporting entity is likely to deem acceptable.
Suggested wording for a request to certify a copy of the customer’s passport, driver’s licence, New Zealand firearms licence or an overseas national identity card is:
I certify this to be a true copy of the original, which I have sighted, and the photo represents a true likeness of [the person presenting the document to me for certification] [OR] [customer’s name].
When there is a request to certify a copy of non-photographic identification, lawyers need to consider to what extent they are happy to certify that the document “represents the identity of the named individual” – particularly when they do not know the customer. Because the phrase “represents the identity” is not defined, lawyers need to consider to what extent non-photographic identification is capable of representing someone’s identity.
Suggested wording where the customer presents a piece of non-photographic identification and a piece of photographic identification together and the lawyer is satisfied that the quality of the photographic identification is such that it corroborates the information on the non-photographic identification:
I certify this to be a true copy of the original, which I have sighted, and it represents the identity of [the person presenting the document to me for certification] [OR] [customer’s name].
A lawyer who does not feel comfortable about making this assertion could offer to certify the copy as follows:
I certify this to be a true copy of the original, which I have sighted.
The onus is then on the reporting entity to decide whether to accept it or not.
And back to the stamps … While there is no absolute rule on the wording lawyers should use when certifying documentation, the Practice Briefing suggests that firms could make up two prefabricated certification stamps. One stamp could be made up for use when the document includes a photograph of the customer and one (or perhaps two) when it does not.
The important point which runs through the whole process is that any prefabricated certification stamps or any particular wording may not always meet the needs of a particular reporting entity.
Last updated on the 17th March 2016