The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 came into force on 30 June 2013.
The new regime applies to financial institutions, a term which includes not only banks but also a wide range of other financial service providers. Any business that hasn’t yet looked into whether it needs to comply with the regime ought to do so as a top priority. There’s a lot that needs to be done to meet the requirements of the new regime, and it will be an area of focus for the regulators responsible for enforcing the new regime.
From a customer perspective, the impact of the new regime will be most noticeable to you when you first do business with a financial institution. They’re required to undertake extensive due diligence on new customers, which includes you having to provide proof of identification such as your passport, birth certificate or driver’s licence, and also needed are documents that confirm your residential address, such as an electricity bill or rates demand. For businesses and other organisations you’ll need to provide information about yourselves and anyone who is acting on your behalf, such as someone having a power of attorney. A financial institution also needs to have information on anyone who owns more than 25% of your organisation, as well as details about anyone who has effective control over your organisation.
Trusts come under an even greater level of scrutiny, with the biggest change being a requirement on financial institutions to obtain information on the source of funds or wealth of the trust. This will involve having to answer questions about the settlors and the origin of their wealth, and/or about the source of income that the trust is receiving.
If you’re an existing customer, you’re not off the radar. Financial institutions are also required to do ongoing due diligence on their customers, in order to ensure that the business relationship and transactions you undertake are consistent with the institution’s knowledge about you, and to identify grounds for reporting suspicious transactions.
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