Law firms encouraged to pool resources to meet anti-money-laundering obligations

by Paolo Taruc09 Oct 2017
As part of efforts to curb money laundering and terrorism financing, the Department of Internal Affairs said it is regulating lawyers and law firms to make sure they meet their obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT).

Starting July next year, lawyers and conveyancers involved in activities covered by the law will need to have a compliance programme in place to help detect and reduce the risk of money laundering and financing of terrorists, according to the New Zealand Law Society.

“Large and small legal firms alike will need to meet these obligations,” the department said. It also encouraged law firms to pool their resources as part of a “designated business group” (DBG) for an easier way to meet the requirements.

According to the Law Society, a DBG refers to at least two individuals who come together to form a group to meet their obligations on a shared basis. They then then choose a member to represent the group. 

A DBG member can rely on another peer to carry out certain obligations on their behalf. These include “customer due diligence” (in certain situations), as well as developing risk assessments, suspicious activity reports, and prescribed transaction reports.

“Every DBG member would need to ensure they consistently comply with their AML/CFT obligations, and ensure their shared compliance framework addresses every area of risk across all members of the group,” said the department.

The Law Society said more information on how DBG could apply to lawyers is still taking shape, with official guidance expected to be released by December.


Related stories:
‘Law firm’ definition in AML/CFT bill changed
AML/CFT law implementation timeline impractical, says Law Society

COMMENTS