Why we need to ask you for information
New Zealand has passed a law called the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“the AML/CFT law” for short). The purpose of the law reﬂects New Zealand’s commitment to the international initiative to counter the impact that criminal activity has on people and economies within the global community.
Recent changes to the AML/CFT Act mean that from 1 July 2018 lawyers must comply with its requirements.
Lawyers must do a number of things to help combat money laundering and terrorist financing and to help Police bring the criminals who do it to justice. The AML/CFT law does this because the services law firms and other professionals oﬀer may be attractive to those involved in criminal activity.
The law says that law firms and other professionals must assess the risk they may face from the actions of money launderers and people who finance terrorism and must identify potentially suspicious activity.
To make that assessment, lawyers must obtain and verify information from prospective and existing clients about a range of things. This is part of what the AML/CFT law calls “customer due diligence” or “CDD”.
To ensure we are meeting our CDD obligations, we will require:
- verified ID
- confirmation of address
We may also need to ask you for further information such as the nature and purpose of the proposed work you are asking us to do for you. In some instances/transactions, we may need confirmation/evidence of the source of funds or wealth.
If You Cannot Provide The Required Information
If we are not able to obtain the required information from you, it is likely, that we will not be able to act for you.
As the law applies to everyone, we need to ask for the information even if you have been a client of ours for a long time.
Before we start working for you, we will let you know what information we need, and what documents you need to show us and let us photocopy.
Please contact the lawyer who will be undertaking your work if you have any queries or concerns.
Tax Residency Self-Certification Required for Interest-Bearing Investments
All customers are required to provide their self-certification before we can hold their funds on Interest Bearing Investment. (Children and minors are not exempt.) We also require the self-certification of key individuals related to certain entities such as beneficial owners and trustees of trusts. Customers may also be contacted to confirm their self-certification and/or asked to provide additional documentation to support their self-certification.
If you are unsure about your tax residency obligations we recommend you visit the IRD website or seek professional advice from an independent tax advisor. We cannot give tax advice to customers.
Why We Need To Ask You For Tax Self-Certification
New Zealand has international agreements and has passed amended legislation to support the automatic exchange of information (AEOI) between the New Zealand Inland Revenue (IRD) and the tax authorities of other participating countries. The aim of these exchanges is to reduce global tax evasion. There are two reporting types under AEOI that may affect you, the Common Reporting Standard (CRS) and the Foreign Tax Compliance Act (FATCA).
- Common Reporting Standard (CRS) came into effect in New Zealand on 1st of July 2017 through changes made to the Tax Administration Act 1994. The CRS requires certain New Zealand Financial Institutions to collect information about customers and their countries/jurisdiction of tax residence. This information is referred to as a customer’s self-certification. We (MWIS) must obtain this information if we are holding funds on interest-bearing investment with our bank on your behalf. If a customer is a tax resident of a country other than New Zealand, our bank may be legally obliged to pass on information about them to and their financial accounts to the IRD. The IRD may then pass on this information to the relevant overseas tax authorities.
- Foreign Account Tax Compliance Act (FATCA) is a United States (US) legislation that aims to reduce tax evasion by US citizens, US tax residents and certain entities which have bank accounts outside the US. This is because they are required to report their worldwide income to the United States’ Internal Revenue Service (IRS) whether they live in the US or not. Our bank has a regulatory requirement to comply with FATCA due to the Double Tax Agreements between (United States of America – FATCA) Order 2014, and two agreements entered into by the governments of New Zealand and the United States of America, being the Intergovernmental Agreement and Memorandum of Understanding. FATCA requires certain New Zealand Financial Institutions to collect information about their customer’s countries/jurisdictions of citizenship and tax residence. If a customer is deemed a US person, US entity or an entity controlled by US persons our bank may be legally obliged to pass on information about them and their financial accounts to the IRD. The IRD may then pass on this information to the IRS.