Anti-Money Laundering 1 July 2018
We are not able to give advice until we have completed a risk assessment for each proposed transaction. At a minimum we will be required to confirm the identification of clients with certified original ID and confirmation of address. We also need to keep that information up to date. Our risk assessment may also require us to confirm and hold suitable evidence of (for example) where the money for a purchase is coming from.
We will not be able to give any advice until we complete these requirements. This includes for example reviewing and agreement/ tender/ auction before purchase. In many cases this will mean a delay.
We expect the REINZ/NZLS agreement for sale and purchase will be amended to take into account these requirements. As soon as the updated agreement is made available we will update you about subjects such as the effect of these rules on unconditional auctions.
The dates for implementation of AML requirements are for lawyers, conveyancers and trust and company service providers – from 1 July 2018; Accountants must comply from 1 October 2018 and Real estate agents must comply from 1 January 2019.
Consultation is now occurring on specific rules for Agents and when that is finished we will update you about those requirements for agents.
Attached with this note is a summary of our Identification requirements. It would be useful if agents can advise clients and customers of these requirements to give sufficient time in agreements for lawyers to complete their risk assessment.
Overseas Buyers – what to expect
The proposed changes to Overseas Investment Act seek to ensure that investments in New Zealand made by overseas persons will benefit New Zealand. It would introduce greater limitations on the types of property that can be purchased by overseas persons, by bringing residential land into the category of “sensitive land” in the Act.
Overseas people do not include Australian and Singaporean Citizens, but can include trusts and companies with overseas trustees, Beneficiaries ore shareholders.
Overseas investors could only obtain consent to buy residential land (that is not otherwise sensitive) in certain situations. They are, broadly:
- if they would be developing the land and adding to New Zealand’s housing supply
- if they would use the land for non-residential purposes or a residential purpose relating to a core business purpose (for example, accommodating pilots at a remote airport)
- if they held an appropriate visa and could show they had committed to reside in New Zealand.
To purchaser residential land a person will now have to provide their Lawyer with a statement about whether the transaction requires consent under the
Act. If the Lawyer has not received such a statement, or had reasonable grounds to doubt the accuracy of a statement, the lawyer cannot effect the transfer of the property.
Agents would be advised to check whether potential buyers (including Trusts and Companies) might be overseas persons and will be able to satisfy the new requirements expected to be Law soon. We will update you as the legislation progresses.