How the Anti-Money Laundering and Countering Financing of Terrorism Act could affect you

From July, you may now be asked for information by your lawyer that previously you’ve only had to provide to banks and financial service providers. This could include verification of identity information and information about the source of funds. 

This may be frustrating for you (and us too), but bear with us because this is a legal requirement, not a firm-based decision. 

_______________________________

The reason for us having to update records or gather more information is that the Anti-Money Laundering and Countering Financing of Terrorism (the AML/CFT Act) will apply to lawyers from 1 July.  The AML/CFT Act has been in force since 2013 and Phase 1 covered banks, casinos, a range of financial service providers and some trust and company service providers.  Phase 2 covers a wider group of businesses deemed “at risk of being targeted by criminals to launder money and finance terrorism”. These businesses include lawyers and conveyancers, accountants and real estate agents.

All businesses covered by the AML/CFT Act are required to have comprehensive risk assessment plans and procedures, which are audited every two years. There are stringent reporting requirements, including the compulsory reporting of “suspicious activities”.   Failure to comply carries hefty fines.

As you can appreciate, this not only adds a degree of inconvenience while we update our records and information, it may also add a layer of cost to a transaction.