AML guidance for accountants
Phase 1 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML Act) Act came into effect in 2013 and placed obligations on financial institutions and casinos to comply with AML obligations. Phase 2 brings accountants, lawyers, conveyancers and real estate agents under the AML regime.
The AML regime to include accountants will come into effect from 1 October 2018.
Below you will find links to important resources designed to help accountants understand their AML obligations.
Government Supervisor: The Department of Internal Affairs (DIA) is the Government supervisor of accountants for AML compliance and has issued comprehensive guidelines for accountants to assist them with meeting their obligations. The DIA Guidelines can be downloaded below.
AML obligations for accountants
The obligations for an accounting practice under the AML regime include:
- determine which activities of your practice are caught by the AML Act
- appoint an AML Compliance Officer
- complete an AML risk assessment on the firm’s business and clients
- develop and maintain an AML compliance programme
- conduct customer due diligence (asking for and verifying customer identification)
- retain records of documents associated with transactions (including the nature, amount, currency, date and parties involved) for not less than five years
- meet audit and annual reporting requirements
- report to Financial Intelligence Unit (FIU) where there is suspicious activity and where prescribed transactions are undertaken
Note: Part 3 (Electronic Identity Verification) of the Amended Identity Verification Code of Practice (IVCOP) is an option a reporting entity may choose to adopt when performing CDD on their clients. Otherwise, applying Parts 1 or 2 of the IVCOP for CDD would be acceptable.
Department of Internal Affairs
The DIA maintains a page with Codes of Practice and Guidelines for phase 2 entities. This should be the primary reference point for AML guidance and commentary for accountants and includes the following:
- Guideline: Accountants — Complying with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (March 2018)
- AML/CFT Risk Assessment and Programme: Prompts and Notes for DIA reporting entities (December 2017). The DIA also refers to the FMA’s step-by-step guide for drafting a risk assessment.
- AML/CFT Programme Guideline (Updated May 2018).
- Anti-Money Laundering Roadshow Session to Accountants (updated August 2018)
Please keep an eye on DIA website for further updates and details
Chartered Accountants Australia and New Zealand (CA ANZ)
- How to conduct customer due diligence under the NZ AML/CFT Act
- How to develop an AML/CFT programme under the NZ AML/CFT Act
- How to perform an audit under the NZ AML/CFT Act
- How to produce a risk assessment under the NZ AML/CFT Act
Resources available to CCH subscribers include:
- CCH Learning have run a free AML session with the DIA and have another session scheduled for September with TEO.
- CCH’s iTrust and CCH Companies software has functionality for building customised AML letters and checklists, reporting on expired documents or by scheduled AML review date and provision for collected AML client due diligence documents to be stored with clients’ details.
- AML commentary is available in New Zealand Trusts and Asset Planning Guide and New Zealand Financial Markets Law and Practice.
- CCH’s New Zealand Business Law Bulletin (October 2017) article on “Phase 2 is now in force-are you ready?”
- AML topic page for CCH iKnow which includes links to the regulatory guidance, legislation, AML commentary and other AML material.
Contact your CCH sales manager for information on the CCH resources.
We have received a number of requests for precedent documents for AML compliance (such as a precedent risk assessment document and precedent AML compliance programme). We are not in a position to provide these sorts of precedents. Our view, and the direction given by the DIA and other AML regulators is that a “one size fits all” approach is not appropriate.
The risk assessment must be completed by each practice and the DIA guidance will assist firms in judging the risks your business is exposed to and how to effectively mitigate these risks.
Similarly the regulators have not provided prescriptive instructions on how businesses can ensure their AML programme complies with the regime (p 19 Guideline: Accountants) : “This is because each business has unique circumstances that determine their exposure to AML risks, which they need to understand and factor into their unique AML/CFT programme”.