Formal Warning Issued to Law Firm One AML

For the first time, the Department of Internal Affairs (DIA) has issued a formal warning to a law firm under the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT Act).

An Auckland-based firm is the recipient of the warning.

Failing to Meet Obligations

Although the firm is not alleged to be involved in money laundering or the financing of terrorism, they failed to meet several of their AML/CFT obligations relating to the establishment, implementation and maintenance of their AML/CFT programme. They were also unable to demonstrate how they would ensure staff compliance, and they failed to adequately understand or assess the risk of money laundering and terrorism financing within the business.

Immediate Action Required

The DIA requires the law firm to take immediate action to rectify all areas of non-compliance and says the firm will continue to be closely monitored by DIA officials.

This comes after the DIA issued the first formal warning to a real estate agent earlier this month, and it serves as a stark warning of the costs and consequences of non-compliance with the Act, which was implemented in 2013 to preserve our international reputation as a good place to do business, and protect ourselves from the dangers that money laundering and terrorist financing can bring.

The Penalties of Non-Compliance

Penalties for non-compliance with the AML/CFT Act can result in civil penalties of up to $200, 000 in the case of an individual and $2 million in the case of a body corporate. Criminal penalties of imprisonment may also apply.

Observing compliance obligations can be a time-consuming, complex and costly process for Reporting Entities. But, this incident is a reminder of the fact that compliance simply must be a priority – non-compliance is not worth the reputational damage or financial costs.

We can help

Here at One AML, we understand this more than anyone – and we are here to help.

If you would like assistance in understanding and meeting your obligations, to ensure that you do not end up in the same position as Kidd Legal, then get in touch with us today. We are experts in all things AML/CFT and are here to provide you with professional advice and guidance.