Advisers fuming at AML proposal

The Ministry of Justice has asked for feedback on a proposal to require reporting entities to report all international wire transfers and large cash transactions to the police, regardless of whether the transactions are suspicious.

Under the new AML regime due to kick in from the start of July, reporting entities including Authorised Financial Advisers (AFAs) have to keep records of transactions in a “readily reconstructed” form.

But the new proposal is for them to also have to send records of the specified types of transactions to the Police Financial Intelligence Unit within 10 working days.

SIFA president Robert Oddy described the proposal as “bureaucracy gone berserk” and said it would impose extra costs and inconvenience on advisers.

He said the rules around wire transfers could affect advisers with clients who had money in overseas investments including UK listed trusts, managed funds and direct equities and bonds.

“It’s just absurd. It’s a mindless increase in bureaucratic accumulation of data and you have to ask what the benefit is and who is going to look at it,” he said.

“A lot of this is coming out of bureaucrats in cupboards which must be windowless and airless. No cost-benefit analysis seems to have been undertaken… someone just dreams this up and plants it on us.”

Oddy also questioned the need for New Zealand to copy Australia, which already has these requirements: “That’s not a good reason to do something, just because Australia does it.”

Murray Weatherston said suspicious transactions were a “whole different kettle of fish” to the regular transactions that would nonetheless have to be reported to the police.

“The mythical person who comes in with $100,000 in a suitcase… it’s never happened to me and I never expect it to happen,” he said.

“The presumption is we are all involved in money laundering and the financing of terrorism unless we can prove we aren’t.”

The proposed changes, if they do go ahead, are unlikely to be passed before next year.

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Comments from our readers

On 14 February 2013 at 5:09 pm traveller said:

This is exactly what happens when people making the rules have no experience of the real business world.

On 15 February 2013 at 9:38 pm Mike said:

......and the Police will be able to cope with this flood of reporting - yeah right!
.....and there will be a guarantee of privacy with no leaks - yeah right!
....and clients will not be guilty before being found innocent - hope so!

On 18 February 2013 at 10:13 am paul said:

And how many advisers actually handle the clients money and make the transfers? I'd suggest very few will have to do any reporting around this.

Advisers fuming at AML proposal

Advisers have slammed a proposed change to Anti-Money Laundering legislation described by one financial planner as “bureaucracy gone berserk”.

Thursday, February 14th 2013, 9:04AM 3 Comments

Comments from our readers

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