New Zealand is a target for money launderers. It is estimated that well over $1 billion a year from drug dealing and fraud is laundered through New Zealand businesses.
New Zealand introduced its Anti-Money Laundering and Countering Financing Terrorism (AML/CFT) legislation in 2009. Banks, financial institutions and many other sectors have been operating under the legislation since June 2013 and real estate agents have been captured under the legislation since 1 January 2019.
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.
Proving your identity
Since 1 January 2019 Real Estate agents will, among other things, be required to verify the identity of their clients in accordance with AML/CFT legislation. This is called Customer Due Diligence (CDD).
This means they are required to identify who their clients are (i.e. who they are acting for). This could be individuals, companies, trusts, or other client types like societies and government departments etc. This means asking 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 Licence, utility bill etc. In some cases, they have obligations to establish source of funds and wealth.
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 the process.
What information will you need to provide?
The information you are asked to provide will vary depending on whether you are doing business as an individual or part of a partnership, company, public body, estate or trust.
As a starting point, the following identity information must be obtained:
• The person’s full name
• The person’s date of birth
• If the person is not the client, the person’s relationship to the client
Documentation you may be asked for
Passport, NZ Firearms License or NZ Driver license 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).
For Trusts and Companies, additional information prescribed by regulations must be obtained
The Trust Deed and, for all trustees and settlors, identity information as above, together with information regarding the Trust’s source of funds or wealth. Additional information may also be required for beneficiaries and appointers.
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 list is not exhaustive and is indicative only. Your real estate agent will assist you with the specific requirements in relation to your situation.