It’s almost here, AML/CFT regulation for Lawyers and Conveyancers from 1 July
The AML/CFT regulatory regime for lawyers and conveyancers takes effect in just 10 days.
1 July is the day when all affected lawyers must have a fully working risk assessment and compliance programme in place. To assist in checking your preparedness, the Law Society suggests consulting barrister Gary Hughes’ July 2017 LawTalk article, which outlines the essential steps to ensure compliance readiness.
Mr Hughes describes the article as a good starting point for lawyers and conveyancers.
"There have been a lot of developments, seminars and guidance notes flying in all directions, in the last 11 months. I think those basic principles outlined back then can still guide Compliance Officers inside a firm a fair distance,” he says.
Mr Hughes says that by now most lawyers will have clearly ascertained which parts of their practice will be covered, and will be nearly finished new client on-boarding materials, detailed risk assessment and compliance programme documents.
“I’ve already seen some great examples, especially from conveyancing firms, informing clients and collecting the required ID information in a smart and client-friendly fashion.
"What becomes crucial now for law firms is to properly understand and implement the documents. Any new process will take a while to bed down. Inevitably there will be a few mistakes along the way. What will be important is for the compliance officer and partners to take ownership, take an interest, fix and remediate any problems, continue updating the risk assessment and training stuff further,” he says.
Mr Hughes says the financial clients he has seen get into trouble during AML Phase 1 have often had flash-looking documents drafted for them.
“But they didn’t really understand them, and consequently have not implemented them, or have failed to keep reviewing and updating the processes as time goes by,” he says.
Gary Hughes has teamed up with Thomson Reuters to write a guidebook squarely aimed at Compliance Officers, which they hope will have enduring value as they get on with trying to embed and keep on top of the evolving AML regime.
“Getting an independent review or outside reality check during the first 3 to 6 months is a good idea, to flush out any problems before the DIA stumble upon them. Also it would be wise to book in your first external audit, even though that seems like months away, as the few people who really know what they’re doing in this area will be in hot demand by 2020,” he says.
Mr Hughes notes that the Courts in New Zealand and Australia have shown over the past few months that they take AML/CFT breaches very seriously.
“The CBA (Aus) $700 million dollar penalty approved by the Federal Court of Australia this week will reverberate around the enforcement world for months to come. Although I hope any hard action against lawyers is likely to be months away yet, no firm wants to be the first to suffer reputational damage from even a public warning or rebuke from the DIA in this area,” he says.
Mr Hughes says there is a wealth of resources for Compliance Officers to work with. The New Zealand Law Society has compiled a set of introductory materials on many AML topics.
And details of the Westlaw NZ guide-book that Gary has authored is available here
Last updated on the 16th September 2019