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Lawyers, Fiona Nicholson, left, and Karen Venables, discuss the new anti-money laundering act and how it affects clients.

Lawyers, Fiona Nicholson, left, and Karen Venables, discuss the new anti-money laundering act and how it affects clients.

Imagine this scenario: You’ve known someone since kindergarten and they are now a lawyer, so you decide to get them to help with buying a house. Don’t be offended if they ask you for your passport to prove your identity.

This is one of the situations that could arise as a result of the new Anti-Money Laundering and Countering Financing of Terrorism Act 2009. Under its terms, as of July 1, lawyers have to carry out certain background checks before working with clients – even if they’ve known them for years.

“They are telling us more money gets laundered through law firms than pretty much anywhere else,” Legal Solutions director Karen Venables, from New Plymouth, said.

“Not locally. I don’t think it happens (in New Plymouth).”

Clients, including those from overseas, need to show their passports, an emailed copy isn’t good enough, as well as proof of where they live – a recent utility bill – and if the work is to do with buying a house, the client would need to show where they got the money from, she said.

“If they say Mum and Dad lent me the money, we have to find out where Mum and Dad got their money from and get their ID and so on. If they say ‘it’s from my business,’ then we ask ‘what is your business?’ ‘I have a chain of supermarkets.’ Well, you’ll have to show us financial accounts for that chain of supermarkets’.”

The changes come into law for accountants in October and real estate agents in January, who will be required to get the same information from their clients.

The issue is lawyers need the information before they start work, so urgent phone calls around putting in an offer by lunchtime won’t work unless the lawyer already has the necessary information.

Legal Solutions compliance officer Fiona Nicholson said a lot of people didn’t have passports and a driver’s licence wasn’t strong enough on its own.

“So, it needs to be included with another form of identification, such as a……….

Continue reading this article at the original source from Stuff.co.nz




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