It’s said that they would buy and use cash-only laundromats in order to disguise the origin of their ill-gotten gains, generally attained from bootleg alcohol, prostitution and other crimes.
Whether or not that’s true, money laundering isn’t just the stuff of thriller- movies. It happens here in New Zealand, and much more often than many of us realise.
In fact, it’s been estimated that $1 billion from drug dealing, fraud, human trafficking and other crime is laundered through illicit business activities, including real estate transactions throughout the country each year.
Basically the idea is to make it look as if the money has come from a legitimate source, which helps criminals avoid detection, and as a country we simply can’t afford to ignore the issue, which our government takes very seriously indeed. Countering the financing of terrorism also comes under the Act, because those criminal financers use methods that are similar to the techniques employed by money launderers, in order to send money to violent organisations all over the world.
The Anti-Money Laundering and Countering Financing Terrorism Act has been in force in New Zealand since 2013, and initially it applied to banks, casinos, financial institutions and some trust and company service providers, since these entities could work to disguise the ultimate beneficial ownership of real estate.
In 2018, lawyers, conveyancers and all trust and company service providers joined that list, as did accountants, and providers of accountancy services. Then - on January 1 2019, it was applied for the first time to the real estate industry.
In terms of buying and selling houses and other property it probably won’t have too much effect on you personally, but you will notice that stringent processes around identification are now in place and you will need to prove who you are without any measure of doubt, and also, possibly provide information about the source of your money.
Your estate agent needs to identify any real estate transaction that may suggest a connection to money laundering, for example, by looking at property that is being bought and sold regularly, within a short space of time, or vendors who are selling property below market value, without obvious concern as to possible loss in profits.
A key legal requirement for all agents is to now complete an identification process with all people wanting to sell or lease property. This process is known as CDD, or customer due diligence, and First National Real Estate has adapted technology and systems to make this process as secure and as short and streamlined as possible for you, whilst still complying with the Act in every way.
First National Real Estate agents do want to make the process (known as CDD, or customer due diligence) as short and streamlined as possible for you, whilst still complying with the act in every way.
Strict reporting requirements apply to them, as a business, so all the relevant paperwork needs to be in order. They don’t want it to seem sinister, frightening or intrusive - or for you to feel singled out, because you really aren’t. It’s just that the terms of the act must apply to absolutely every vendor and buyer, in order to achieve the desired result of curbing criminal-money-laundering and possible terrorism-funding activity in, or through, New Zealand.
Owen Norrish, Principal Officer for First National Marlborough commented that First National commented that First National fully supports these new requirements as being in the best interests of keeping New Zealand safe from any form of crime relation to money laundering.
He says that over the past three months, all First National Marlborough agents have been fully trained not only how to detect possible illegal or suspicious activity, but also on using systems and technology that will enable them to explain and complete CDD with clients, in a friendly and informative manner.
“While this is a complex matter, in most instances our agents will be able to explain and fully complete CDD with a client within a few minutes and reassure that client around any privacy concerns,” says Mr Norrish.