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Accountants to comply with AML/CFT legislation

Some time ago New Zealand has passed a law called the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT).

The purpose of the law reflects New Zealand’s commitment to the international initiative to counter the impact that criminal activity has on people and economies within the global community.

The first sector required to comply with this legislation was the Finance sector (Banks, Financial Planners etc), lawyers are required to comply with the requirements of the AML/CFT Act from the 1st July 2018 and recent changes to the Act mean that from 1 October 2018 accountants are required to comply too.

The intent is for the entire professional services community (lawyers, accountants,banks, etc) to help combat money laundering and terrorist financing, and to help Police bring the criminals who do it to justice so even though the vast majority of our clients are honourable people we know well, and have had a long relationship with, this legislation requires us to do a number of things with regards to every client

The law says that we must assess the risk we may face from the actions of money launderers and people who finance terrorism as well as identify potentially suspicious activity and that means more paperwork for us and a requirement for you to supply us with more information.

For most of our clients we will be asking for certain information when you bring in your annual accounts work, while we need to have compliant processes in place by the 1st October we have a year or so to collect this information about all clients. New clients will need to provide the information BEFORE we can carry out any work.

To complete the risk assessment we must obtain and verify information from prospective and existing clients about a range of things. This is part of what AML/CFT calls “customer due diligence” (‘CDD’).

CDD requires us to undertake certain background checks before providing services to clients or customers. Accountants and other professionals must take reasonable steps to make sure the information they receive from clients is correct, so we need to ask for documents that show this and we need to keep the information on file for a minimum of five years.

If your business activities change significantly then we may need to update the CDD

The minimum information we will need to obtain from you and verify to meet these legal requirements includes:

  • your full name; and
  • your date of birth; and
  • your address.

To confirm these details, documents such as your driver’s licence or your birth certificate, and documents that show your address, such as a current bank statement will be required.

If we complete work for a company or trust we will need information about the company or trust too, including the people associated with it (such as directors and shareholders, trustees and beneficiaries).

We will need to ask you about the nature and purpose of the proposed work you are asking us to do for you; in most cases it will be business advisory and annual accounts/tax work.

We may need information confirming the source of funds for certain transaction to meet the legal requirements and we may also need to ask you for further information depending on a range of variables required by the legislation.

If we are not able to obtain the required information from you, it is likely we will not be able to act for you.

Before we start working for you, we will let you know what information we need, and what documents you need to show us and let us photocopy.

While we may shake our heads at some of the requirements, the Act is bringing New Zealand into line with other countries and if you have any queries or concerns please contact our Practice Manager, Neil Hodgson, who is our AML/CFT Compliance Manager.

From our business perspective there is a huge amount we need to put in place, including various compliance programmes and reporting systems, staff training programes all of which will be audited every two years (NOTE – this is not an audit of you, it is an audit of our systems). We need to keep records regarding AML/CFT for a minimum of five years and this will be held in individual client files as well as in our various compliance documents.

And just so you know they aren’t picking on you we even have to carry out Department of Justice checks and credit checks on our staff as part of our compliance programme.

Employment Relations Amendment Bill

The first wave of changes to legislation in the employment arena were announced last week. There was nothing unexpected, except for possibly the usefulness of NZ First to act as a hand brake for more widespread changes.

One of Labour’s flagship policies was the abolition of the 90 day trial period. The great news for SME’s is that if you have 19 or less employees, the trial period will still be available to you. An unexpected turn of events and a moved that has disappointed unions. Unions however did get a number of changes they were seeking.

The purpose of this Bill is to implement the Government’s post-election commitments to restore key minimum standards and protections for employees, and a suite of changes to promote and strengthen collective bargaining and union rights in the workplace. Read here a summary of the changes, and over the next few weeks we will detail how the changes may affect how you operate your business.

Proposed Amendments

Restoring Key Minimum Standards and Protections for Employees
  • Removing the exemption for employers with fewer than 20 employees from the current rules about business transfers, which will allow vulnerable workers of these employers to elect to transfer to an incoming employer
  • Extending the time frame for vulnerable workers to elect to transfer to an incoming employer and placing information and notification requirements on employers in respect of their employees’ personal information
  • Reinstating the right to prescribed rest and meal breaks, as applied previously regarding number and length of breaks within specified work time, with limited exceptions for essential services where certain conditions exist
  • Restoring reinstatement as the primary remedy in unjustified dismissal cases, where the employee requests it and where reinstatement is practicable and reasonable
  • Limiting trial periods to employers with fewer than 20 employees
Collective Bargaining and Unions

The proposed amendments include:

  • Removing the requirement for a union representative to gain consent from an employer before entering a workplace
  • Requiring employers to allow union delegates reasonable time during working hours to perform their duties in respect of the employees of that employer.
  • Reinstating that the parties are required to conclude a collective agreement, and repealing the provisions that enable the ERA can determine that bargaining has concluded
  • Reinstating the ability of unions to initiate collective bargaining 20 days before an employer
  • Repealing sections 44A to 44C that allow employers to opt out of multi-employer collective bargaining once bargaining has been initiated
  • Requiring that collective agreements must contain rates of pay and that rates of pay must be agreed during collective bargaining
  • Repealing the ability of employers to deduct pay as a response to partial strikes
  • Requiring that new employees are afforded the same terms and conditions as the applicable collective agreement relating to their work for the first 30 days of employment
  • Restoring key minimum standards and protections for employees
  • Requiring employers to provide the applicable collective agreement and union contact details and the option to join the union at the same time as they provide an intended individual employment agreement to an employee
  • Requiring that employers provide information about the role and functions of the applicable union when the intended employment agreement is given to prospective employees
  • Encouraging an active choice by a new employee on whether to join the union, and whether to object to the employee’s employer providing the employee’s name and notice of the employee’s choice to the relevant union
  • Extending the grounds for discrimination to include an employee’s union membership
  • Extending the time frame under section 107 for which an employee’s union activities may be considered to contribute to an employer’s discriminatory behaviour from 12 months to 18 months

Modernising Parental Leave

The Employment Standards Legislation Bill which came into effect on 1 April 2016 brings some changes to Parental Leave, including:

  • Parental leave payment period extended to 18 weeks
  • Parental leave payment extended to non-standard workers and those who have recently changed jobs
  • Entitlements extended to a wider range of permanent arrangement carers with primary responsibility of a child under 6 years
  • Unpaid leave can be taken flexibly within the first year
  • Introducing “Keeping in Touch” hours of work – for example to do training, hand overs and ease back into work
  • Extending unpaid leave to workers who have been with their employer for more than six months but less than 12
  • Allowing workers to resign and still receive payments
  • Increasing penalties for fraud
  • Providing additional parental leave payments for parents of preterm babies

Some of the above requires certain eligibility criteria be met and some are by mutual agreement with the Employer, so it pays to communicate your plans. To read more about the changes and to find out the details about leave entitlements and criteria visit one of these sites:

Ministry of Business, Innovation & Employment

IRD