- NZ’s AML/CFT Act kicks in on 1 October 2018
- The DIA has a range of tools to address non-compliance including penalties
- Time is running out for CAs in public practice to be AML-ready
New Zealand's Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Amendment Act 2017, kicks in on 1 October 2018.
It is critical for accounting practices that provide "captured activities" to be ready for this deadline. Non-compliance can bring costs including reputational damage.
The AML/CFT Act is not just designed to prevent money laundering. It will also help to reduce the risk of legitimate businesses including accounting practices, being used to launder money - something that has occurred in New Zealand in the past.
Many of the services offered by Chartered Accountants in public practice can leave them vulnerable to exploitation by money laundering criminals.
Equally important, CAs in public practice are often privy to detailed information about their clients and the transactions they engage in. This can leave accounting practices far better placed than banks and other institutions to spot possible early signs of money laundering activity.
The AML/CFT Act is activities based, so your obligations, if any, under the AML/CFT Act will depend on the nature of services you provide to clients.
New Zealand's Department of Internal Affairs (DIA) has produced guidelines for accountants to understand the variety of captured activities that could make your practice an AML reporting entity.
If your practice comes under the ambit of captured activities, your firm will need to comply from 1 October 2018.
Now is the time to take action.
As a starting point, appoint someone in your practice as the AML/CFT compliance officer. The DIA is the supervisor for accountants, and while it’s not a statutory requirement, the DIA is requesting accounting practices that are AML reporting entities to register with them by 26 September. Don’t delay!
The DIA's registration form asks for information about your AML/CFT Compliance Officer. Hence the need to appoint one promptly.
Assess and formalise in writing, the money laundering and terrorist financing risks your practice faces. Then establish a compliance program that spells out how your practice will detect and manage AML/CFT risks.
These compliance steps must include verifying the identity of clients who request services covered by the AML/CFT Act, asking questions, and being alert to any potential signs of money laundering.
Compliance with the AML/CFT Act does raise the compliance burden for Chartered Accountants in public practice and indeed all members who provide captured activities. Zowie Pateman, Deputy Reporting and Assurance Leader at Chartered Accountants ANZ (New Zealand), note, this puts an extra burden on accountants, who will have to up-skill to be fully aware of their obligations and work with staff across the practice to implement systems and processes.
Nonetheless, Pateman believes the AML/CFT Act, will lift public and international confidence in New Zealand's financial systems.
With only days remaining until the AML/CFT Act becomes part of New Zealand's legal framework, members in public practice are urged to take the necessary steps to comply.
Several Roadshow events have been held for members on the AML/CFT Act. If you did not attend, it's highly recommended that you view the recording of the Wellington session.
DIA/FIU AML Roadshow for accountants
If you were unable to attend the DIA/FIU AML Roadshow for accountants, the Wellington session was recorded and is now available to watch on demand.Watch now