New Client Requirements

Information required from new clients

Why we need to ask you for information

Like all NZ law firms, we are required by law to collect certain information about our clients. Please don’t be offended when we ask for your personal details.

We must obtain information about our clients to comply with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT), the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standards (CRS).

Please note that we will not be able to start work for you until we have all the required information. We will need your full name, residential address, date of birth, and whether you are a New Zealand resident/citizen or not. We will need to verify your ID and will need proof of your residential address.

Information confirming the source of funds for a transaction may also be necessary to meet the legal requirements (especially when a trust is involved).

Process

We will ask you to complete an onboarding form.

We then need to verify your identity. We outsource this process to a company called First AML. 

  • In the onboarding form you need to provide your consent for us to pass on your name and contact details to First AML.
  • They will send you an email with instructions.  It is a straight forward process using your phone and your ID.
  • Please attend to this verification asap as we are not able to start work for you until the process is completed.

For further information about First AML’s data security and privacy policy, refer to www.firstaml.co.nz/security/

First AML’s fees for verifying your identity will be included in our invoice to you.

Entity information

If you are a company or trust or other entity type, First AML will ask you to provide information to confirm the structure of the entity. This may include corporate information, partnership documents, trust deeds etc. This information is required in order to determine who are the controlling parties and beneficial owners of the entity. The associated directors, shareholders, partners, trustees and beneficiaries may also need to provide identity information.

Source of funds

Please be aware that, depending on the type of transaction and the entities involved, we may be required to ask for information about your source of funds or source of wealth.

Further information

www.keepourmoneyclean.govt.nz

If we are not able to obtain all the required information from you, it is likely we will not be able to act for you. Because the law applies to everyone, we need to ask for the information even if you have been a client of ours for a long time.

Information required when we place funds on interest bearing deposit in our trust account

If we will be holding your funds in our trust account you may want these funds placed on interest-bearing deposit, on-call.  If so, we will need to ask whether you are a tax resident of NZ or another country and you must complete a form provided by our bank.

If we place funds on interest-bearing deposit (IBD) on your behalf we are required to report to our bank whether you are a US tax resident or a tax resident of another country.

We are not allowed to place funds on IBD without holding a FATCA form signed by you, confirming if you are a tax resident of another country.

This requirement is primarily because of FATCA.  What is FATCA?   FATCA is the United States Foreign Account Tax Compliance Act and the intergovernmental agreement between the United States and New Zealand relating to it.  The FATCA agreement between NZ and the US is directed at reducing tax evasion by US taxpayers. FATCA requires financial institutions to report on financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. Whilst AlexanderDorrington is not a “financial institution”, our trust account is subject to the FATCA provisions.  You can read about privacy issues relating to FATCA.

What is a US citizen or tax resident?  A US citizen includes persons born in the US, having a US citizen parent or persons who are US-naturalised.  A US tax resident includes a green card holder and someone who satisfies the substantial presence test.  The substantial presence test is satisfied when a person is present in the US for 31 days in the current year (calendar year), and for at least 183 days in the period of the current year and the two years prior to the current year.  When assessing the 183 days, this includes all days present in the US in the current year, 1/3 of the days present in the US in the year prior to the current year, and 1/6 of the days present in the US in the year two years prior to the current year.