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Cash tracking ramps up


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The days of trotting into a law firm you’ve never dealt with to put an offer in on a property the same day may be over.

And, even if you’ve been a customer for decades, they may ask you where your money came from.

The law to prevent money laundering is slowly spreading to encompass more professions.

Banks have been asking customers for ID more since they came under the Anti-Money Laundering and Counter Financing of Terrorism Act, and from July 1 this year lawyers are subject to it.

It’s the turn of accountants in October, then real estate agents from January 1 next year.

“If a new client walks through the door, until we have all our due diligence done on them then we cannot act,” says Marta Wojcikowski, the practice manager at Gawith Burridge in Masterton.

“If they want to buy a property and they need an agreement looked over then we can’t do it on the same day.”

If the person is in Auckland, they have to get documents certified and the wording has to be perfect.

“There is a whole bunch of administration in the background that has to all be in place,” she said.

Few people dispute the thinking behind the law.

New Zealand has a reputation as one of the least corrupt countries in the world and the law is designed to keep it that way.

Wojcikowski worked at the giant Goldman Sachs in London that had a whole department of specialists doing what is known as compliance work.

Compliance is now more of an issue everywhere, including in small towns in New Zealand.

Wojcikowski said money laundering could happen anywhere and there was always a risk someone could seek out a firm in a small town rather than a large Auckland corporate with a team dedicated to compliance.

“We don’t think we have experienced it, but it is not impossible,” she said.

Possible scenarios were putting money into a lawyer’s trust account and then making an excuse to take it out to make it look cleaner, or buying a property here because having money come into New Zealand and then go out made it look clean.

Many people thought of money laundering in terms of international transactions but people with money from criminal activity locally also sought to clean it.

To prevent this, more people are going to be asked “where did your money come from”.

“It gets more difficult when you have enhanced due diligence,” Wojcikowski said.

“Then proving identity becomes more intrusive.

“You have to ask people the source of wealth and source of funds.”

People with “mum and dad” trusts may face such questions, and as the new regime spreads to accountants and real estate agents the chances of intrusive questions about personal finances will increase.

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