The New Zealand Law Society is ensuring the Department of Internal Affairs is kept informed of the concerns of lawyers over the compliance requirements for AML/CFT, acting Executive Director Mary Ollivier says.
“We appreciate that some of the AML/CFT legislation is unclear and as noted in LawPoints last week, we suggest that if a clear answer is not received from DIA, you interpret it as best you can and document your reasoning in case the matter is ever queried in the future,” she says.
“The Law Society itself is mindful of its own position where it is not the regulator and cannot give legal advice. However, we welcome inquiries from the profession on this – nzls.aml@lawsociety.org.nz - and will answer where we can.
Mrs Ollivier says that as with Phase 1 of the AML/CFT implementation, the short time frame allowed means there are interpretation issues arising in Phase 2. Phase 2 began on 1 July with the legal profession among the first groups to be included.
“The Law Society remains in constant communication with the DIA through different channels and has highlighted to it the main queries it has received from members of the profession,” she says.
“The Law Society is also discussing pragmatic approaches to concerns with the implementation of AML where there is scope. The DIA have said that they’re fighting one fire at a time and trying to prioritise them all.”
Mrs Olliver says unresolved issues which have been raised so far by members of the legal profession are wire transfers, treatment of fees in advance and disbursements, due diligence and real estate agencies, and due diligence and second tier lenders.
“The DIA has made it clear that it is going to take an educative approach in the first instance, particularly where guidance has been requested on those grey areas. This may provide some comfort.”
Commenting on concerns raised by some lawyers about why they are required to comply with AML/CFT, Mrs Ollivier says the legal profession has always supported the concept of AML legislation and New Zealand needs to be line with other jurisdictions.
“It has always suggested that compliance be proportionate to the risk. It’s also important to remember that the Act was fast-tracked for the phase 2 industries following the Panama Papers issue and the report by John Shewan commissioned by the Government.”
Some of the information prepared by the New Zealand Law Society to assist the legal profession with the AML/CFT phase 2 requirements is available here.