New Zealand Law Society - Proposed AML/CFT class exemption for barristers sole supported

Proposed AML/CFT class exemption for barristers sole supported

The Law Society says it continues to support the limited class exemption for barristers sole from the Anti-Money Laundering and Countering Funding of Terrorism Act 2009 which is sought by the New Zealand Bar Association. The Law Society has made a second submission on a second Ministry of Justice consultation paper on the proposal. The paper seeks feedback on two potential options for the exemption.

The Law Society notes that, as the exemption would only apply where a barrister is instructed by the solicitor and the relevant barrister is carrying out “captured activities”, the exemption is in practice very limited in scope.

It says the risk of money laundering going undetected and unreported appears low, given the unique relationship that exists between a barrister and their instructing solicitor when acting for a client and the distinct features of barristerial practice.

The Law Society says it considers that option 1 would be acceptable in principle, with some amendments to reflect the realities of legal practice and the practical operation of the Act. The two options differ in that option 1 would exempt barristers from ss 10-22, 25-39, 48A-49, 51-52, 56-61 and 68-71 of the Act. Option 2 would exempt them from ss 10-22, 25-31 and 48A-48C. Both exemptions would be subject to the same conditions.

Under option 1 a barrister would be required to file suspicious activity reports, conduct enhanced due diligence for an activity requiring a suspicious activity report, and keep records of suspicious activity reports as well as identity and vertification records.

Option 2 would mean a barrister was subject to all other compliance obligations.

The Law Society says it appreciates that Ministry of Justice officials may not be familiar with some of the nuances of the instructing solicitor/barrister relationship and that further discussion and explanation may be needed.

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