Identification requirements for non- personal entities
AML: What this means for the way we will work together
Law changes apply to lawyers and their clients from 1 July 2018. These laws already apply to banks and financial service providers and are known as AML (Anti-Money Laundering and Countering Financing of Terrorism Act 2009, to be precise).
AML has been in place in New Zealand since 2013 and in addition to applying to your relationship with us from 1 July 2018, will apply to your relationship with your accountant from 1 October 2018 and any Real Estate Agent you deal with after 1 January 2019.
What this will mean for you
The laws requires us to ‘know our clients’ and to collect and verify information to show that we know our client is who they say they are.
AML includes a set of rules that prescribe what we must so to complete ‘customer due diligence’ (CDD). This includes collecting specific information from you, holding proof of ID and verification of your physical address. In certain circumstances we will also be required to obtain evidence of your source of wealth or the source of funds used to settle a transaction.
This document will guide you through what we require from you as an individual or as a person who owns, controls or acts on behalf of a client who is a business entity or Trust.
Requirements
AML requires that where our client is an entity such as a company, partnership trust or incorporated society, then we must know, understand and verify details relating to that business and the people who own and control it. This is called ‘customer due diligence’ (CDD).
The law requires us to conduct CDD on:
1. Our customer (your business entity)
2. Any person who owns greater than 25% of your business or trust (beneficially either directly or indirectly)*
3. Any person who exercises effective control over your business or trust*
4. Any person you authorise to act on behalf of your business or trust*
*Individuals falling into descriptions 1 & 2 are known as beneficial owners for AML purposes.
We are also required to understand and record the nature and purpose of your business relationship with us so do not be surprised if you see this question in the client information you are asked to complete.
For your business entity, we will need to obtain documents that verify the incorporation or constitution of your business or trust, for example:
- Company extract (including all shareholders and directors) and company constitution (if you have one)
- Partnership agreement (for partnerships)
- Certificate of Incorporation, copy of rules for an incorporated society or charitable trust
- Meeting minutes for unincorporated societies, informal groups, or clubs
For each person who is a beneficial owner or person acting on your behalf, we will need to verify who they are and where they live. The identity information required from each individual is set out on our ‘identification requirements for individuals’ page.
If our client is a trust and in certain other circumstances, we will need to verify the trust source of wealth and may also need to verify the source of funds applied towards a particular transaction. At this time, we will require documentation to support that verification. Examples of acceptable documents are set out below.
- Bank statements, portfolio valuation reports and share registry statements
- Confirmation letters or emails from solicitors or accountants
- Rental or lease agreements
- Sale and purchase agreements
- Loan agreements and other supporting type documents
In certain circumstances, the documentation you provide us with will need to be certified by a trusted referee. See ‘using a trusted referee ‘below. We’ll also need to know if you and , if applicable, any of your controlling persons are tax residents in another country or countries. If so, we need tax numbers or an equivalent for those countries. See the section on ‘confirming your tax residency’.
Please note: documentation may vary depending on the type of non-personal entity and we are happy to confirm what is required.
Using a Trusted Referee
If you are in New Zealand and not able to meet with us face to face, you can choose to have your identification and proof of address documents certified by an approved trusted referee.
Specific rules apply to trusted referees and the certification they must give is a as follows:
Certification must:
- Include the name and signature of the trusted referee
- Include the date of certification
- Have been carried out in the last 3 months preceding us being given the copied documents
The trusted referees must:
- Be at least 16 years of age
- Sight the original identification documents
- Make a statement to the effect that the documents provided are a true copy and represent the identity of the named individual (true likeness where photo ID is used)
- Specify their capacity to act us a trusted referee from the approved trusted referee list below.
If you live overseas and wish to provide certified documents, please contact our AML Compliance Officer for specific instructions.
About Trusted Referees
There are some rules around who can and cannot act as your trusted referee.
The trusted referee you select must not be:
- Related to you or living at the same address as you
- A person involved in the transaction or business requiring this certification
You are able to select any of the following to act as your trusted referee:
- Registered medical doctor
- Kaumatua (as verified through a reputable source)
- Lawyer (as defined in the Lawyers and Conveyancers ACT 2006)
- New Zealand Honorary Consul
- Chartered accountant (within the meaning of s19 of the New Zealand Institute of Chartered Accountants Act 1996)
- A person who has the legal authority to take statutory declarations or the equivalent in New Zealand
- Commonwealth representative (as defined in the Oaths and Declarations Act 1957)
Confirming your tax residency
As part of global measures to counter tax evasion, all NZ banks and financial institutions are now required to collect information about customers’ foreign tax residency and pass that and other personal and account information onto Inland Revenue, which may then be exchanged with overseas tax authorities.
Generally called the Common Reporting Standard (CRS), it has been initiated by the Organisation for Economic Co-Operation and Development under the Automatic Exchange of Information regime to achieve the exchange of certain information between participating countries. Currently over 100 countries have agreed to implement the standard, including New Zealand.
Where we hold funds for you in our Trust Account, we are acting as an agent for our Bank and are required to obtain a self-certification form before placing funds on deposit. In this you confirm:
- Your country or countries of tax residence and corresponding tax number(s) or equivalent(s)
- If you cannot supply your tax number(s) or equivalent(s), the reason why you can’t (for example, if the country does not issue tax numbers to its residents)
For more information about CRS check out the IRD website.