What the Anti Money Laundering Legislation means for business lending
The ‘Anti-Money Laundering and Countering Financing of Terrorism Act 2009’ is designed to counter the impact of criminal activities on people and economies. It also serves to maintain international confidence in the integrity of our financial system.
What it also does is add a layer of complexity to those seeking finance. As the Act regulates the financial services sector (along with others), lenders must meet certain legislative requirements to comply. Unfortunately, different lenders have their own perspective on how to do this, which complicates things slightly.
While we can appreciate that complying with the Act will cause some annoyance, every lender is bound by the legislation so there is no escaping it. Bear this in mind if you have plans that require funding and allow a little more time for us at Finance New Zealand and our lenders to get things done right.
For businesses that have trusts as shareholders (generally over 25 percent), the legislation requires that all trustees submit appropriate identification documentation, as well as a copy of the fully executed original trust deed and all amendments thereafter. This is more complicated when solicitors have established trustee companies to act as the independent trustee. In these circumstances, all the directors and shareholders of the trustee company must also be identified.
All this, naturally, adds complexity to settlements and consequently more time needs to be allowed for this, especially where outside parties are in different locations.
And, because each lender has different requirements, you will need to be identified with each lender! Fortunately, once Finance New Zealand has this information, we are able to make the introduction of a new lender far more easily.
We will work with you to ensure compliance with the Act is straightforward and easy for you, even if that simply means coming to you to collect the documentation. We also have Don Morgan, our General Manager - Risk and Operations, to assist with compliance requirements and ongoing regulations.