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Anti-Money Laundering

Anti-Money Laundering Information Video

 

Anti-Money Laundering

For most New Zealanders, the term laundering, when associated with property, has been linked with the washing machine and the daily task of keeping your clothes clean. However, from January 1st, Real Estate will be captured under the Anti-Money Laundering and Countering Financing Terrorism (AML/CFT) legislation. This means that your property now falls in line with Banks, financial institutions, accountants and lawyers – and it also means, that when it comes time to sell, your real estate agent is required by law to ask you a few questions (which won’t include the type of laundry detergent you use).

 

In order to comply with money laundering legislation, Real Estate Agents, will among other things, be required to verify the identity of their clients in accordance with AML/CFT legislation. This is what is called Customer Due Diligence. The team at Harcourts have been working hard to ensure that this process is as stress free as possible.

 

What does it mean for you? It means when it comes time to list your property, your Agent is required to identify who you are. This requires asking you for information to verify your full name, date of birth, and residential address. This can be done in several ways but, not unlike the banks, they will ask to see identity documents like your Passport, Driver License or utility bill.

 

If your real estate agent cannot verify your identity in line with the legislation, they may not be able to act for you. Your agent will need to identify and verify: the client (you), each beneficial owner of the client and each person acting on behalf of the client including the authority to act on behalf of the client e.g. a lawyer or representative giving instructions on someone’s behalf.

 

In some cases, the Real Estate agent will also need to establish the source of the funds for the transaction (i.e. where the funds have actually come from) and source of wealth (i.e. how those funds got there in the first place and how was that money obtained)

 

If your property is in a Trust, your agent will require a copy of the Trust Deed and, for trustees, and settlors, they will be required to verify indentification, as they would for any individual, together with information regarding the Trust’s source of funds or wealth. Additional information may also be required for beneficiaries

 

If your property is owned by a company, your agent will require details of the company, together with the information for individuals noted above for every individual with more than a 25% shareholding, all individuals with effective control of the company and all individuals acting on behalf of the company. Information regarding source of funds or wealth may also be required.

 

The above information is not exhaustive and is indicative only. Your Harcourts real estate agent will assist you with the specific requirements in relation to your situation.

 

This is a major change for the industry and we understand that some of these questions may seem quite intrusive, however all real estate agents in New Zealand have legal obligations to comply with the AML/CFT legislation and will be requesting more documents and information than they have in the past. Businesses are not doing this because they think you are laundering money – they are doing it, not only because it’s law, but to help put an end to the over 1 billion dollars that is laundered through New Zealand every year. If you require any further information, please do not hesitate to contact your Harcourts agent.

Anti-Money Laundering

 

Proving your identity when buying or selling property

From 1 January 2019, real estate agents are required to verify the identity of their vendors in accordance with Anti-Money Laundering legislation. In some situations, real estate agents will also be required to verify the identity of purchasers. If your real estate agent cannot verify your identity in line with the legislation, they will not be able to act for you.

 

Identity verification can take days and sometimes weeks if a Trust or company is involved, or where parties reside overseas.

 

The below gives an indication of some of the documents your real estate agent may ask you to present in person or as a certified document as part of this process:

Individuals

Passport, NZ Firearms Licence or NZ Drivers Licence with another document such as a bank statement or statement issued by a Government agency. You will also need to provide a document with your residential address (for example, a utility bill). 

Trusts

The Trust Deed and, for all trustees and settlors, the information required for individuals as noted above, together with information regarding the Trust’s source of funds or wealth. Additional information may also be required for beneficiaries and appointers.

Companies

Details of the company, together with the information for individuals noted above for every individual with more than a 25% shareholding, all individuals with effective control of the company and all individuals acting on behalf of the company. Information regarding source of funds or wealth may also be required.

Note:

The above list is not exhaustive and is indicative only. Your real estate agent will assist you with the specific requirements in relation to your situation.

Disclaimer:

The material and information contained herein is for general information purposes only and is not intended to form professional legal advice. REINZ does not accept liability for any claim or other action that may arise directly or indirectly from the use of or reliance on the material and information provided herein. REINZ recommends you seek independent legal advice if you are unsure of your legal position.