The Ministry of Justice want to hear your thoughts about what they have got right, and what they could do better with the Anti-Money Laundering and Countering Financial Terrorism legislation.
The law to stop money laundering and financing of terrorism is designed to protect us from criminals cleaning and hiding ‘dirty’ money and proceeds of crime through our financial and business systems. But is the law keeping our system free of corruption, and have the current rules got the balance right?
To find out – the Ministry of Justice are inviting feedback on how this law has affected you through and extensive consultation process.
What is the consultation on?
A consultation document has been developed based on what the Ministry of Justice and the other AML/CFT agencies have identified as being areas of concern and subject to potential change. These have been structured into six parts:
- Institutional arrangements and stewardship
- Scope of the AML/CFT Act
- Supervision, regulation, and enforcement
- Preventive measures
- Other issues or topics
- Minor changes for clarity
A copy of this document can be found here.
How does this affect bookkeepers? And why you need to have your say!
The consultation paper is a lengthy and comprehensive document. To assist bookkeepers in considering feedback, ICNZB have identified the sections most relevant to our profession:
Page 28 - Preparing or processing invoices
“Accountants, tax agents or bookkeepers (accounting practices) involved in the preparing and processing of invoices may have AML/CFT obligations for that activity. If the accounting practice is also involved in the payment of funds on behalf of the client, preparing and processing invoices is part of managing client funds. In addition, preparing and processing invoices may also be ‘engaging in or giving instructions’ for transactions relating to creating, managing or operating a legal person or legal arrangement irrespective of whether the accounting practice is managing the funds of the client.
However, the fact that this activity is captured by the Act may not be entirely clear or extend to all situations where trade-based money laundering could occur. We could clarify this activity in the Act. This change could also allow us to also adjust obligations for businesses which engage in this activity to ensure compliance costs are in proportion to risks. “
The questions asked of this change are:
2.1. Is the Act sufficiently clear that preparing or processing invoices can be captured in certain circumstances?
2.2. If we clarified the activity, should we also clarify what obligations businesses should have? If so, what obligations would be appropriate?
Page 29: Preparing annual accounts and tax statements
“Trade based money laundering, fraud, tax evasion, and other criminal activity could also be detected by businesses involved in preparing annual accounts or tax statements for customers. This activity does not currently attract AML/CFT obligations unless the business is also involved in managing client funds or engages in or give instructions in relation to transactions.
We could capture the activity of preparing annual accounts and tax statements. This would potentially enable greater detection of trade-based money laundering and other criminality, but it would likely increase the number of businesses that have obligations and the compliance costs for those businesses. In 2017, Inland Revenue estimated that there were approximately 5,600 active tax agents, but it is not known how many of these businesses already have AML/CFT obligations and would therefore become reporting entities as a result of capturing this activity. Irrespective, we could tailor obligations for these businesses if we included this activity, e.g. by only requiring these businesses to report suspicious activities.”
The questions asked of this change are:
2.3. Should preparing accounts and tax statements attract AML/CFT obligations? Why or why not?
2.4. If so, what would be the appropriate obligations for businesses which provide these services?
What happens now?
We understand that bookkeepers are busy individuals, especially during these chaotic and stressful times of lockdown so we want to make it easy for you.
ICNZB has for some time now been part of the DIA’s Industry Advisory Group (IAG). The DIA established this forum as a communication pathway with representatives of the sectors it supervises under the AML/CFT regime.
ICNZB will be submitting an official response to this consultation and are inviting you to contribute to this. As a recognised professional body and representative on the IAG, your contribution to our submission will increase our efforts significantly and ensure your voice is heard.
How can you provide your feedback to us?
We invite you to either:
- Attend an open meeting with our IAG representatives, Greg Steed and Trish Madison, to provide your feedback verbally on these points on Thursday, 4 November between 1:30pm and 2:30pm – register here; or
- Provide your submission directly to the Ministry of Justice here. You are able to answer only the questions in the online survey that are relevant to you, your business or your profession. The survey is divided into sections to make it easier to find the questions you want to answer.
Submissions for this survey closes on 3 December 2021.