AML/CFT Identify Verification during COVID-19
Since 1 July 2018, lawyers have been subject to New Zealand’s anti-money laundering regime contained in the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“the Act”).
Under the Act, lawyers must complete customer due diligence (“CDD”) or “know your customer” investigations on clients.
During COVID-19 Alert Level 3 and 4, the ability to identify clients and verify client information in line with AML legislation is proving a challenge.
AML supervisors have released a joint statement to provide guidance to AML reporting entities on how to comply with AML requirements during the COVID-19 Alert Levels, both for ongoing customer due diligence for existing clients and any required due diligence for new business relationships.
No concessions will be made, rather workable solutions to identify clients and verify information, with an emphasis on the continuing need for vigilance in these unusual times is in place.
The Act prescribes a risk-based approach to ongoing CDD and account monitoring. For current customers this means reporting entities have the discretion to not necessarily sight certain documents in various circumstances, depending on the reporting entity’s assessment of the risk.
The AML guidelines are available on the Reserve Bank of New Zealand’s website and include the following approaches to assist in carrying out CDD while face to face interactions with clients are limited:
- In the current lockdown situation, it is difficult for reporting entities to carry out ongoing CDD in accordance with usual processes. Instead, reporting entities can apply a risk-based approach, such as accepting scanned copies of documents as an interim measure, with the originals to be sighted at a reasonable later time.
- Where new business relationships are established or work undertaken for new clients, and an identity cannot be verified face-to-face, then an approach such as delayed verification can be used. Delayed verification is allowable until a later date if it is essential in order to avoid interruption to normal business practice; and money laundering and financing of terrorism risks are effectively managed through procedures of transaction limitations and account monitoring through other appropriate risk management procedures; and verification of identity is completed as soon as is practicable once the business relationship has been established.
- Use appropriate electronic verification options, such as specifically designed computer programs, to verify the person being identified.
Bramwell Bate will work with you to obtain the necessary information to comply with AML identity verification requirements during these challenging times so that your legal matters will be attended to efficiently.