This is a timely reminder to all lawyers of the actions they need to take to comply with the obligations of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT) Act.

There are a range of resources to support lawyers and legal professionals to fulfil their requirements, including specific information available from DIA. We encourage lawyers to approach the DIA directly if they have any specific questions or concerns.

Tim Maffey, Trust Account Consultant and Independent AML/CFT Auditor, who is a former Inspector at the Law Society, says “From what I’m seeing most firms are getting it right in their day-to-day practical application of the Act, such as in conducting CDD and staff training.”

“In general, firms could perhaps improve on collecting sufficient evidence of Source of Funds/Source of Wealth and checking for potential PEPs (Politically Exposed Persons).” 

“But what’s tripping most firms up is if they are overly reliant on templated specimen forms. While the most commonly used specimen form of Risk Assessment lists the six main criteria they need to consider in a general context, the onus is still on firms to apply this to their own particular practice and customise it accordingly to assess their particular areas and levels of risk.”

“Likewise, the commonly used template form of Compliance Programme needs to be applied to their firm specifically to include the internal procedures, policies and controls to detect money-laundering and to outline how they manage and mitigate the risks they have identified.”

In December 2020 The New Zealand Law Society | Te Kāhui Ture o Aotearoa published some recommendations from AML specialists to help law firms comply with the regulations, these include considering if the:

• risk assessment addresses the specific matters in sections 58(2) in the context of the law firm’s business,
• the law firm's compliance programme addresses each of the matters in section 57(1), and whether the PPCs set out in the compliance programme are relevant to the law firm,
• the law firm's compliance programme sets out how the firm will comply day-to-day with each of the matters in section 57(1) and whether there is a process for checking PEPs, and
• documents reflect what the law firm does in practice.

For detailed guidance to ensure you’re compliant, refer to our practice briefing on certification and verification under the Act.

Penalties for non-compliance with the Act can result in civil penalties of up to $200,000 in the case of an individual, and $2 million, in the case of a body corporate; and criminal penalties of imprisonment for up to two years or a fine of up to $300,000, in the case of an individual, and $5 million in the case of a body corporate.