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The Professional Trustee Team

New law that will affect you

Recently New Zealand passed legislation which we are finding is affecting many clients, especially individuals, trusts and companies. For this reason, it's important you are aware of the new law and how it will affect you.

Purpose and objective of new legislation 
The law recently enacted is called the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, commonly referred to as "AML". The primary objectives of this law are to help combat money laundering and terrorist financing.

To ensure compliance with the new legislation, certain parties such as bankers, solicitors, accountants and professional trustees must obtain and verify particular information and complete certain checks on their clients when acting for them. All suspicious activities must then be reported by these advisers to the relevant authority.

How this affects you 
Common scenarios which will be caught by the new legislation are: 
opening of bank accounts 
purchasing or selling an interest in land (e.g. houses, farms, commercial buildings)
purchasing or selling an interest in a business
purchasing or selling shares 
obtaining finance
forming new entities, including companies, trusts etc.

If you're undertaking any of the above activities, greater time is going to be needed in order to complete the documentation now required to satisfy the requirements imposed under the legislation. Accordingly, ensure you give all your professional advisers, especially your lawyers and professional trustees, adequate time to complete the work that is necessary. At GRA we need at least two clear working days from receipt of documentation. In some cases, this time may need to be extended, depending upon the nature of the transaction and the work that is necessary to undertake in order to comply with the statutory requirements.

Failure to be given sufficient time may mean the transaction you wish to undertake is not completed in time. If this occurs, you could be charged penalty interest by a party you are contracting with.

On a personal note, I appreciate the aims of AML. That said, it appears to me to contravene the ethos of our government, which is to decrease the time, effort and costs businesses and individuals currently incur in carrying out everyday transactions. 

The above aside, we must comply with the law. This means when we act for you as your professional trustee, we will need to complete more documentation than we previously have.

To ensure your transactions proceed smoothly, help your advisers by communicating with them. In particular, tell your bankers, solicitors and professional trustees of what you are planning. When planning activities, be mindful that adequate time needs to be given to advisers to satisfy all of the new legislative requirements.  Specifically, when opening bank accounts, be mindful that the process can now take a week or more. 

When raising finance, appreciate it can take lenders four days or more to issue documentation. Sufficient time must then be given for all parties, including your professional trustee, to sign loan documentation. 

As always, we wish to assist you in your affairs to the best of our abilities, so ensure you talk to us in advance of your transactions. That way, we'll be best placed to help you.

The Professional Trustee Team
The Professional Trustee Team
© Gilligan Rowe & Associates LP

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Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.
Hi John, I just wanted to say a huge thank you for sitting down with me the other day to do the review. I learnt so much from this time with you and its really giving me some good things to consider with moving forward - Sam, October 2018

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Gilligan Rowe and Associates is a chartered accounting firm specialising in property, asset planning, legal structures, taxation and compliance.

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