To help prevent and combat money laundering, by law some businesses have to ask their customers to confirm who they are and ask questions about their transactions. This helps detect crime and deters criminals from abusing New Zealand’s financial system.
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Money laundering is how criminals ‘clean’ the money they make from illegal activities such as fraud, drugs and tax evasion.
They launder money so it looks like it comes from a legitimate source, to cover their tracks and avoid being detected. They then spend the money or use it to fund their criminal activities.
People who finance terrorism also use these methods to send money to violent causes and to disguise who is providing and receiving the money.
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The Government has extended the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act to more businesses including real estate agents and conveyancers; many lawyers and accountants; some high value dealers (like auctioneers, jewellers, and motor vehicle and boat dealers); and betting on sports and racing.
Criminals use some of the services these businesses and professions provide to launder money. Any business that provides these ‘at risk’ services will need to put systems and processes in place to stop criminals from trying to exploit them, and detect suspicious financial activities if they occur.
A business may ask you, as their customer, to confirm your identity. In some circumstances (such as if you’re acting for a company or trust) they may also ask for information about where money came from and the other people involved.
Banks, other financial services providers and casinos already do this, as they’ve had to comply with the AML/CFT Act since 2013.
Asking customers basic questions to confirm who they are and about the source of funds discourages criminals from trying to exploit these legitimate businesses. It’s an effective way of shutting down the methods criminals use to launder money.
If businesses notice things that are potential signs of money laundering or financing of terrorism, they need to report that information to Police.
Ultimately, when something’s wrong, it makes it easier for authorities to find out where ‘dirty’ money came from, prosecute criminals, seize illegally earned money and assets, and stop crime.
You’ll have to provide identification if:
You may have to provide documents confirming your name, birthdate and address, for example:
If you represent a company or trust, you may have to provide extra information like:
The business or professional may not be able to complete your transaction.
The business or professional will keep a secure record of your information, in the same way they already keep other customer information about you.
If they notice something that’s a potential warning sign of money laundering or financing of terrorism, by law they must report it to Police (although this is optional for businesses that deal in high value goods).
The Police Financial Intelligence Unit (FIU) will then analyse the information you provided and other relevant details about the transaction or activity to decide which situations need to be referred to investigative branches of Police or other agencies.
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