New Zealand lawyers face AML obligations from 1 July 2018, accountants later in the year. Perhaps there Australian colleagues will over the next decade.
I was fortunate enough to be on the speaking panel for the Thompson Reuters AML Conference last week in Auckland. Over 70 lawyers, accountants, and other interested people attend this conference to hear from the New Zealand Police FIU, the Department of Internal Affairs (the supervisor), and several AML subject matter experts.
When implementing AML obligations into professional services firms, especially law firms, there are many issues not faced by other professions, and certainly not faced by financial business. So care must be taken to understand these issues when advising lawyers on designing and implementing AML programs. It is not enough to say that Phase 1 (or Tranche 1) organisations did it this way or faced these problems.
When talking to lawyers about implement AML programmes it is important to understand how law firms actually operate, the particular dynamic of a law firm, the risk issues faced, and the legal ethicals. As a former practising lawyer and someone who has advised lawyers on both risk management, AML programs, and legal ethics around AML I am fortunate enough to understand these tricky issues. Also, the challenges of actually implementing change in a law firm.
So, some topics that I was able to assist with at the conference over and above the basic AML issues:
- Linking the ML/TF Risk assessment on a client to general risk management
- Can / should a firm price for client risk – financial or ML?
- When should KYC/ CDD be carried out – before or after a conflicts search?
- Who pays for electronic verification – client or law firm?
- How do you deal with documenting a suspicious matter / activity report?
- Who owns the documents on a client file?
- Can / should you withdraw if you make a SMR/SAR?
- Does the firm change retainer letters, its costs disclosure?
- Does the firm change its Terms & Conditions?
- How to process map
- How to plan a project
- How to deal with a regulator / supervisor visit