Understanding the need for these additional documents and the required verification process will ensure that you are better informed and prepared should you decide to make any important property related decisions in 2019.
What is AML and why is it needed?
The AML Act requires businesses like Ray White to put preventative measures in place to help tackle money laundering and financing of terrorism. These anti-money laundering and countering financing of terrorism (AML/CFT) measures help us to stop crime and safeguard our reputation as one of the least corrupt nations in the world, and a good place to do business.
Phase 1 of the AML/CFT Act has been in force since 2013. It applies to banks, casinos and a range of financial service providers. Phase 2 is now being rolled out and requires lawyers, conveyancers, accountants, real estate agents, sports and race betting, and businesses trading in high value goods to start implementing compliance from January 2019.
What does this mean to you ?
Under the AML Act, a customer is classified as our vendor /seller. So if you decide to sell your property from January 2019, we will be required to conduct customer due diligence (CDD) as well as customer identification and verification.
Similarly if you are are increasing your property portfolio through the purchase of a new property, then your lawyer will conduct the required CDD.
Unpacking Customer due diligence (CDD).
When engaging with you, our agent must establish the following:
1. The full legal name(s) of the ‘beneficial owner(s)/real person(s)’ selling the property.
2. If the property is being sold by a Trust, then all of the Trustees are considered to be beneficial owner(s)/real person(s).’
3. If the sale is by a Company, then the agent must identify who in the Company owns a 25% or greater share, they are the ‘beneficial owner(s)/real person(s).’
Once the agent has established who the ‘beneficial owner(s)/real person(s)’ are, they will need to obtain documentation from each of these person/s to prove their identity. The following three identification options can be used:
Option 1: Photographic identification – some examples are a passport, a travel document, a firearms licence. The photographic identification must contain the name, date of birth, a photograph, and the signature of the named person.
Option 2: Non-photographic identification – some examples are a birth certificate or a citizenship certificate. For this option supporting identification that includes a photograph of the person named on the non-photographic documentation in the form of a driver’s licence, an 18+ card, or an international driver’s license must also be provided.
Option 3: A New Zealand drivers licence supported by a bank card, a gold card, or an IRD letter.
Verification of documentation – ‘Beneficial owner/real person’
When proof of identity documentation has been obtained from the ‘beneficial owner(s)/real person(s),’ the agent must take further steps to verify that the documentation belongs to that person. This can be achieved via the following:
1. Face to face process
2. For New Zealand based persons, a certificate of verification from a trusted referee
3. For overseas based persons, a certificate of verification from a person authorised in that country to take a statutory declaration.
Nature & purpose
The final step in the process is to establish from the vendor/seller the following information:
1. Why they are selling the property
2. If they have sold or purchased other properties in the last 5 years
3. What they intend to do with the proceeds from this particular sale.
The agent must also make a personal assessment of the vendor/seller and decide if further investigation for the reason/s of the sale are necessary.
The agent must then record all gathered information in a database that can be made available for the ‘supervisor’ (Ministry of Internal Affairs) to audit and review.