To help prevent and combat money laundering, by law some businesses have to ask customers to confirm who they are and ask questions about their transactions. This helps detect crime and deters criminals from abusing New Zealand’s financial system.
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Money laundering is how criminals ‘clean’ the money they make from illegal activities such as fraud, drugs and tax evasion.
They launder money so it looks like it comes from a legitimate source, to cover their tracks and avoid being detected. They then spend the money or use it to fund their criminal activities.
People who finance terrorism also use these methods to send money to violent causes.
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The Government is proposing to extend the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act to real estate agents and conveyancers; many lawyers and accountants; , some high value dealers (like auctioneers, jewellers, and motor vehicle and boat dealers); and betting on sports and racing.
Criminals use some of the services these businesses and professions provide to launder money. Any business that provides these ‘high risk’ services will need to put systems and processes in place to stop criminals from trying to exploit them, and detect suspicious financial activities if they occur.
A business may ask customers to confirm their identity. In some circumstances (such as if the customer is acting for a company or trust, they may also ask for information about where money came from and the other people involved.
Banks, other financial institutions and casinos already do this, as they’ve had to comply with the AML/CFT Act since 2013.
The AML/CFT Act says businesses must tell Police if they notice things that might be money laundering.
Asking customers basic questions to confirm who they are and about the source of funds discourages criminals from trying to exploit these legitimate businesses. It’s an effective way of shutting down the methods criminals use to launder money.
Ultimately, when something’s wrong, it makes it easier for authorities to find out where ‘dirty’ money came from, prosecute criminals, seize illegally earned money and assets, and stop crime.
You’ll have to provide identification if:
You may have to provide documents confirming your name, birthdate and address, like a:
If you represent a company or trust, you may have to provide extra information like:
The business or professional won’t be able to complete your transaction.
The business or professional will keep a secure record of your information, in the same way they already keep other customer information about you.
If they notice something that’s a potential warning sign of money laundering, by law they must tell Police (although this is optional for businesses that deal in high value goods).
Police will then analyse the information you provided and other relevant details about the transaction or activity to decide which situations they need to investigate.
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