In a little over a year’s time, lawyers are set to be covered by new anti-money-laundering regulations – yet essential work still needs to be done
The New Zealand Law Society says that the timeline to implement the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) law may be impractical and proposes that lawyers be covered by the scheme at a later date than the government plans to ensure that essential regulations and guidance are in place.
Under the AML/CFT Bill, lawyers would be covered by the legislation’s Phase 2 from 1 July 2018. A more realistic date would be January 2019, the Law Society said in a submission to the government.
“The availability of the Phase 2 regulations and guidance – which are still to be developed – will be essential to any business developing procedures to ensure that they meet their obligations under the AML/CFT legislation. A longer implementation period will allow this essential work to be done,” said Mary Ollivier, Law Society spokesperson. “The Law Society totally agrees that the legal profession has an obligation to be involved in the global response to money laundering and terrorist financing. However, the key is going to be effective and efficient implementation of Phase 2. The timetable in the bill puts that at threat.”
Ollivier also said that there may be a need for lawyers to be covered by the law later than other occupational groups because of the profession’s unique ethical and legal requirements.
There are also practical problems with the proposed timeframe for reporting suspicious activity, the Law Society said. Under the law, those covered need to report suspect activity “as soon as practicable but no later than three working days after forming its suspicions.”
“Forming its suspicions” needs to be clearer and more precise, said Tim Jones, Law Society vice president for Auckland.
“A lawyer might consider that a matter could possibly be a suspicious activity, but because of the imprecision might need to consult another lawyer. Giving only three working days to report is also another problem. Preparation of a suspicious activity report will probably be time-consuming. Lawyers will also have to consider whether they include any privileged information in the report. Again, this might mean the lawyer needs to take independent legal advice,” he said.
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Under the AML/CFT Bill, lawyers would be covered by the legislation’s Phase 2 from 1 July 2018. A more realistic date would be January 2019, the Law Society said in a submission to the government.
“The availability of the Phase 2 regulations and guidance – which are still to be developed – will be essential to any business developing procedures to ensure that they meet their obligations under the AML/CFT legislation. A longer implementation period will allow this essential work to be done,” said Mary Ollivier, Law Society spokesperson. “The Law Society totally agrees that the legal profession has an obligation to be involved in the global response to money laundering and terrorist financing. However, the key is going to be effective and efficient implementation of Phase 2. The timetable in the bill puts that at threat.”
Ollivier also said that there may be a need for lawyers to be covered by the law later than other occupational groups because of the profession’s unique ethical and legal requirements.
There are also practical problems with the proposed timeframe for reporting suspicious activity, the Law Society said. Under the law, those covered need to report suspect activity “as soon as practicable but no later than three working days after forming its suspicions.”
“Forming its suspicions” needs to be clearer and more precise, said Tim Jones, Law Society vice president for Auckland.
“A lawyer might consider that a matter could possibly be a suspicious activity, but because of the imprecision might need to consult another lawyer. Giving only three working days to report is also another problem. Preparation of a suspicious activity report will probably be time-consuming. Lawyers will also have to consider whether they include any privileged information in the report. Again, this might mean the lawyer needs to take independent legal advice,” he said.
Related stories:
New bill would bring lawyers under anti-money laundering regime
New Zealand reclaims top spot in anti-corruption rankings