AML Overview

Concerned about AML? We can help! Will it apply to you? What will you need to do and how much will it cost you? 2Shakes’ customer onboarding software helps you get Anti Money Launder (AML) Customer Due Diligence (CDD) sorted.

Please Note: The information below was collated to help new reporting entities when Phase 2 AML originally came in, so please see your AML Supervisor’s website for latest information, thanks.

2Shakes client onboarding for Signup, Authorities & AML CDD

Get the benefits of onboarding that creates an agreement using NZBN data and ensure your authority to act for you clients with IRD, ACC and Companies Office is done correctly.  Your client e-signs, IDV for CDD are fast and robust and the data is uploaded to you practice management systems (Xero Practice Manager).

2Shakes Customer Due Diligence (CDD) helps you to comply with AML:

  • Beneficial Owners – A suggested list of people to consider for identity checks (directors, shareholders, effective controllers).

  • Trusts – Help to identity when ownership sits in a trust, and a trust tab to capture the required trust information specific to the type of trust.

  • Identity Verification – to automatically check passport, drivers license, date of birth, address against trusted external sources and do a PEP check and also biometric facially match the person against their Photo ID.

  • Capture Manual Identity checks – ability to securely record Identity evidence and additional measures.

  • E-sign & E IDV –  Option to capture Identity verification information during signing.

  • Risk – Ability for you to track the legislated factors that require Enhanced CDD with useful help text. You can record your risk assessment of the client along with the nature and purpose of your relationship.

  • Enhanced Customer Due Diligence – Ability for either you or your clients to securely upload proof of wealth / source of fund documents.

  • Annual Reporting – Onboarding Statistics for annual reporting.

  • AML compliance officer – System requires a final check and approval.

  • Records for Audit – AML Report created for each customer agreement.

Before we begin…the legal bit

2Shakes is a software company that thousands of Australian practices use to meet AML compliance. We are not AML lawyers or consultants, but we have been supporting business with onboarding and AML since 2016 and we are sharing useful information to help you understand AML and what it may mean for you. All information we provide comes with no warranties, guarantees or liabilities whatsoever. We recommend you verify your AML position for yourself – you can do that through such things as seeking advice from your professional bodies, others in your industry, your lawyers and AML specialists to understand your AML requirements, develop your programme etc.

What is AML/CFT?

Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act is legislation that aims to prevent criminals from using NZ to launder money.  Criminals launder money by hiding who they are and putting money through transactions that look legitimate. This ‘cleans’ the funds. Criminals often get respected professionals like Lawyers and Accountants to do these transactions for them. 

Will it affect me?

AML is services based, so it will apply if you provide services to clients that are in scope. You can find out by review DIA website here AML Info for Businesses. So for example it will generally impacts those in the accounting sector who:

  • manage client funds

  • acting as a formation agent of legal persons or arrangements

  • arranging for a person to act as a nominee director or nominee shareholder or trustee in relation to legal persons or arrangements

  • providing a registered office, a business address, a correspondence address, or an administrative address for a company, a partnership, or any other legal person or arrangement

How 2Shakes Helps

We automate the client onboarding process and include AML Customer Due Diligence so you and your clients get a automated, easy, and auditable CDD solution that is securely stored for you in the cloud.

What will I need to do?

Businesses who provide ‘in-scope’ services need to report on that, and are referred to as AML Reporting Entities. Reporting Entities need to set up an AML/CFT Programme with a designated Compliance Officer and perform a Risk assessment. They need to vet and train staff and file an annual report to DIA. They also need to report any suspicious activities or prescribed transactions to the police. If you provide in-scope services you will be considered a reporting entity, and have obligations under the Act. Day to day, you will need to perform Due Diligence checks on your customers. If you do not comply with legislation then the Supervisor can enforce penalties. Here’s how it fits together.

How 2Shakes Helps

AML is triggered by the services you offer and you only need to do AML CDD if you provide a client in-scope services. In 2Shakes we ask if the services are in-scope for AML/CFT. If they are, we help you record the nature and purpose of the business relationship, the risk assessment, and capture other factors for Annual AML/CFT Reporting. All this supports your decision on the CDD level to use for each customer.

If you provide in-scope services for you customers then your onboarding process will need to:

  • Determine people who are the customer, who control the customer or who are beneficial owners of the customer.

  • Perform Customer Due Diligence on each natural person, which includes proof of Identity, proof of address and can include proof of wealth (also called source of funds) as well as capturing additional details, such as for trusts.

Who do I need to do Customer Due Diligence on?

Customer Due Diligence are checks that you need to perform on ‘natural’ people who are associated with the customer you provide services to.  Section 11 of the Act states

A reporting entity must conduct customer due diligence on:

a). a customer,

b). any ‘beneficial owner’ of a customer,

c). any person acting on behalf of a customer.

Beneficial Owners are people that:

  • own more than 25%.

  • have effective control

  • the transactions conducted on behalf of

Determining who you need to perform customer due diligence on can be complicated.  For example shares in a company can be owned by another company, whose shares are also owned by another company.  This can look a bit like this…

In this example Customer Due Diligence needs to be carried out on John – as the Director who is in effective control of the company – and on Don – a shareholder who owns a company at three levels below the customer, through which he owns more than 25% of Cards Ltd!

How 2Shakes Helps

2Shakes has devloped an algorithm that searches levels of company ownership to help you identify the people and entities associated with your customers.  We show you the shareholders, directors, possible trusts, possible foreign companies and possible listed companies for clients listed on the Companies Register.

Customer Due Diligence (CDD)

The Act outlines 3 levels of CDD:

How 2Shakes Helps

You can record the CDD level in 2Shakes, and then use 2Shakes to record identity & address verification, all as part of the onboarding process. You can choose how you do this, either manually, electronically or biometrically.

In 2Shakes, your clients can now do everything needed to sign up in one electronically signed step:

  • Sign your services agreement, agreeing fees and Ts &Cs

  • Authorise you to act on their behalf with Inland Revenue, ACC, Companies Office

  • Authorise you to act on their behalf with private organsations

  • Consent to and complete Identity and Address checking

Our system automatically verifies passport or Drivers License & addresses against trusted external databases. At the same time we check to see if the customer is a foreign Politically Exposed Person (PEP). We can also biometrically match the video (selfie) of a person against their photo ID.

If enhanced CDD applies you can collect and store evidence of proof of wealth or source of funds.

Audit Records

AML/CFT requires reporting entities to be audited by an Independent Appropriately Qualified Person.  This audit is to determine the adequacy and effectiveness of your AML/CFT programme. For audit you will need to provide access to files, customer identification records, transactions and/or outputs from your systems.

How 2Shakes Helps

In 2Shakes you capture what you did, and what the result was so that so it is in one place for audit purposes.

2Shakes recognises that AML checks sometime takes time. Where there are trusts or non-resident or foreign owners you may need to chase after the evidence or information you need. 2Shakes lets you to get your agreement signed, while you wait for your AML/CFT CDD requirements to be completed. We make it easy to keep track of where all you customers’ agreements and AML statuses are at, whatever is required by your AML/CFT policy and procedures.

And once done, 2Shakes has a section for your business’ AML Compliance officer to do a final review and confirmation check that AML CDD is complete.

Looking for AML help, Setting up your Programme, Audits and Reporting?

  • Aro Advisers can help with a package of resources focused specifically on the accounting sector. These resources can save you days and days of effort. Aro Advisers also show you their own documents as examples. Aro Advisers are well established 2Shakes users, so you can see how they have incorporated our software into their AML programme.

    2Shakes discount on Aro Advisers AML package.

  • CAANZ have created AML guidance documents and webinars for their members.

  • Have a look at Real Estate Authority website. Read DIA’s Real Estate Agent Guidelines. 2Shakes can help with section 5. Do you know your client (also known as KYC).

  • Our Audit Partner, Silks Audit, are a firm of experienced Accounting & AML auditors. Silks Audit are available to perform your AML/CFT programme audit. See our Audit page for more.

  • You can download the DIA Accounting Sector guide directly from DIA website using this Accounting Sector Guide link. If you have confirmed that AML applies to you then you should also download the Sector Risk Assessment as well as the NZ Police FIU Guide to registering for goAML. If after reading this information you need to check in with DIA, then remember you can ask for clarification about AML/CFT using this email amlcft@dia.govt.nz

More Help

Didn’t find what you need here? You can find lots more help on our main Support Page.

Or you can contact us or email us at support@2shakes.co.nz and we can help you with what you need to know.

Thanks very much,
The 2Shakes Team