AML/CFT Reporting Entity Status in New Zealand

The Department of Internal Affairs is the supervisor for law firms, conveyancing practitioners and incorporated conveyancing firms under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. Its guideline for the sector states that it is for those firms and practitioners “who have compliance obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the AML/CFT Act or the Act) from 1 July 2018”.

A practice that is a reporting entity carries the obligations the Act sets out, which the Department publishes in full: a risk assessment, an AML/CFT programme, customer due diligence, ongoing monitoring, a compliance officer and an annual report.

The Act takes an activities-based approach. A law firm, incorporated conveyancing firm or conveyancing practitioner is captured where, in the ordinary course of business, it manages client funds, accounts, securities or other assets, other than sums paid as fees for professional services.

The Department publishes that managing client funds covers any instance where you receive or hold client funds and control the payment of those funds.

Because the approach is activities-based, the Department states that the obligations of the AML/CFT Act do not apply to any other activities that a lawyer or conveyancer carries out in the ordinary course of business.

The Department publishes the following categories. Whether one covers a particular practice is the regulator’s call, not ours, so we report them and stop there.

• Fees for professional services. The Department states that receiving sums paid to you for your fees for professional services, including as a retainer in advance, is not managing client funds.
• Barristers. Schedule 2 of the AML/CFT (Exemptions) Regulations 2011 covers a barrister, as defined in section 6 of the Lawyers and Conveyancers Act 2006, where the conditions that exemption sets are met.
• Activities outside the captured activities. The Department states the obligations of the Act do not apply to any other activities a lawyer or conveyancer carries out in the ordinary course of business.

This page covers the Department’s guidance for lawyers and conveyancers. Accounting practices are supervised under the same Act but through separate published guidance, including a class exemption covering most, but not all, types of tax transfer, which we do not report here.

Your regulatory requirements page lets you record that one of the categories above applies to your practice. We record the category you cite and the date you cited it. We do not check it against the Department of Internal Affairs, and recording a category is not a determination by us that it applies.

A recorded position stands for a year, after which we ask again. We also ask again if the Department changes the terms we published.

Orchard72 is a technology marketplace that connects users with legal, financial, and tax professionals. We do not provide legal, tax, or regulatory advice.

We report published regulatory requirements as a courtesy to help professionals stay informed. This is not advice, and professionals should always verify their position directly with the Department of Internal Affairs or the New Zealand Law Society.

• Department of Internal Affairs: AML/CFT information for lawyers and conveyancers (opens in a new tab)
• Department of Internal Affairs: guideline for lawyers and conveyancers (opens in a new tab)
• Department of Internal Affairs: frequently asked questions for reporting entities (opens in a new tab)