It’s Just Not A Priority

By Frank Lieshout | 6 min read

Once again It’s time to talk about those three (some say ‘dirty’) letters.

A, M, L

That’s right – AML – Anti Money Laundering and the regulations that come with it.

In our original article, we mentioned a number of objections we hear about complying with AML obligations and debunked these as myths.

Just call us the AML Myth Busters! Here is what we have addressed in previous articles:

• ‘There’s no consequence for not doing it, eh?’
• ‘It doesn’t apply to me.’ 

In this article, we look at the objection of ‘It’s just not a priority.’

On a sunny, summer Friday afternoon at work we can ALL think of better things to do:

• Going on holiday
• Going to the beach
• Enjoying our favourite food and drink
• Family Time
• Binge watching the latest and greatest on Netflix – maybe Bridgerton or re-runs of Tiger King?

Let’s face it, in most people’s eyes just about anything else would be a priority over sorting AML compliance.

We are all busy at work at the moment.

• Accountants – have the dreaded 31 March final date for filing client’s previous year’s tax returns.
• Real Estate Agents and Law Firms – the property market is still hot so creating lots of work

But here is why sorting your AML compliance should be a priority.

Consequences

As we noted in our earlier article where we busted the myth of the objection ‘There’s no consequence for not doing it, eh?’  there are serious consequences for not getting it sorted.

• It is a serious crime to let criminals launder money or terrorists find funding. It will increase the risk of New Zealand being a place of illegal activity and therefore a less safe place to live.
• The consequences for failing to comply with various obligations under the AML/CFT Act 2009 (the Act) not only affect you personally but also your firm as it is the Reporting Entity. Under the Act, you or your firm may face penalties for any non-compliance.
  • These range from a formal warning or steps to remedy, to serious criminal proceedings and civil penalties.
    • A warning may not seem like much of a penalty, but if you are given a warning, that warning can be made public in some circumstances.
  • The criminal proceedings and civil penalties come into play if you seriously breach the law. For breaches of civil offences, individuals can be fined up to $200,000 and firms can be fined up to $2 million.

Further to this, recently a large real estate firm was warned about failing to comply with its AML obligations, and this made headlines throughout the media.

Deadlines for AML Audit

As part of your AML obligations, you are required to have an audit of your AML systems and compliance.

The initial deadline to have your AML Audit completed was within 2 years of the commencement date of the AML compliance for your industry:

If you are a new business or started doing ‘captured activities’ after those AML Commencement Dates, your first audit needs to be completed within 2 years of the start date of your business or commencing captured activities.

However, there has been a change in the rules for AML Audit deadlines. The deadline is now within every 3 year period. This change was decided last year but the actual date from when it takes effect keeps getting pushed out.

The latest advice is that this will now come into force by July 2021 and no action will be taken if your audit was required to be done between January 2021 and July 2021.

This means that if you’re a Real Estate firm you are off the hook for another year (1 January 2022) to get your AML audit done.

But for accountants/bookkeepers/lawyers/conveyancers, there is no joy. Your initial AML Audit was still due last year and if not done is overdue!

Also, as the AML audit can be done anytime during the required period, keep ahead of the game and have it done early to give you peace of mind.

So while you can probably think of about 100 other things you would rather be doing, getting your AML Compliance sorted as a priority is important.

If you haven’t already had your AML Audit completed, get in touch with us.