In June 2016, the Prime Minister and Minister of Justice announced that the government would fast track changes to introduce Phase 2 of the Anti-Money Laundering and Countering Financing of Terrorism Act (Act).
Phase 1 of the Act came into effect in 2013 and requires organisations such as banks and casinos to conduct customer due diligence. A number of people may through their own personal experiences with their bank, be familiar with the requirements which are to:
- Obtain and verify the identity of customers
- In some circumstances, verify sources of funds
- Conduct ongoing customer due diligence and monitor account activity
- Identify and report any suspicious activity
Phase 2 involves extending the Act to cover other professions such as lawyers, accountants and real estate agents.
Submissions on a consultation paper in relation to the proposed changes have been sought and the Government aims to introduce a Bill to Parliament before Christmas. The Ministry of Justice has indicated that the Bill will be passed into law by July 2017.
The impact of the coming changes means that we will be required by law to:
- conduct a higher level of due diligence on our clients including obtaining identification in a wider range of circumstances than we do currently
- verify the source of client funds
- report any transactions that may be suspicious to the Police
In addition, lawyers will be subject to the supervision, monitoring and enforcement provisions of the Act. Who will regulate the legal profession is yet to be announced.
We will provide further updates when the Bill is released and how this may affect the type of information we may be compelled to obtain from our clients.
If you have any questions please get in touch with our experts today.
Copyright © Cavell Leitch. All rights reserved. Redistribution is only permitted with express written permission. For enquiries please contact us. This article by its nature cannot be comprehensive and cannot be relied on by clients as advice. It is provided to assist clients to identify legal issues on which they should seek legal advice. Please consult the professional staff of Cavell Leitch for advice specific to your situation.