The organisation says it aims to “better align the regime with the day-to-day realities of legal practice”
The New Zealand Bar Association (NZBA) has sought a class exemption for barristers affected by the recent amendments to the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) regime.
“The AML/CFT Amendment Act 2017 extended the AML/CFT regime to cover a range of new entities—including many lawyers,” the organisation said. “The aim of the regime is important, seeking to improve New Zealand’s ability to tackle money laundering and the financing of terrorism. But the changes impose stringent obligations for those affected, requiring significant changes to the day-to-day practice of some barristers.”
Through the proposed exemption, the NZBA said it aims to “to better align the regime with the day-to-day realities of legal practice.”
The amendments do not affect a sizable portion of barristers; the organisation said that the regime applies only to “any involvement that a barrister has, in the ordinary course of their business, in advising on, documenting or effecting a transaction involving real property.” However, those who are impacted would be subject to obligations such as customer due diligence, suspicious activity reporting and record-keeping.
The NZBA said that the obligations were “onerous,” especially since the majority of barristers are limited in terms of administrative resources. Moreover, the organisation considers many of the obligations to be “unnecessary where a barrister is instructed by a solicitor or the Crown, as these parties will themselves be subject to the regime.”
In response to the NZBA’s application, the Ministry of Justice proposed a draft exemption that eases some obligations; while the NZBA agreed with aspects of the proposed exemption, the organisation expressed its concern that the draft remains limited.
“The proposed exemption for barristers instructed by solicitors or the Crown from most customer due diligence requirements and the need for AML/CFT programmes and reports is a good step in the right direction,” the organisation said. “But the NZBA remains concerned that there is still unnecessary duplication, where a barrister is instructed by a solicitor, with the solicitor’s obligations under the regime.”
To limit this duplication, the NZBA has suggested changes to expand the ministry’s draft exemption.
“The NZBA is of the view that a more expansive exemption along these lines is consistent with the objectives of the AML/CFT regime, as the risk of money laundering going undetected and unreported is minimal owing to the nature of the tripartite relationship between the barrister, solicitor and client,” the organisation said.
The NZBA provided its feedback in March; the organisation anticipates an update from the ministry on the final exemption in the next few months.
