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Internal Affairs Issues A Formal Warning To Kidd Legal For Anti-Money Laundering Non-compliance
Te Tari Taiwhenua Department of Internal Affairs (DIA) has issued a formal warning to law firm Kidd Legal under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act). This is the first formal warning issued to the legal sector under this legislation.
Kidd Legal operates two offices in Auckland and lists 10 staff on their website.
Kidd Legal has failed to meet several of their AML/CFT obligations relating to the establishment, implementation and maintenance of their AML/CFT programme, and was unable to demonstrate how they would ensure compliance from staff. They also failed to adequately understand or assess the risk of money laundering and terrorism financing within the business.
They are not alleged to be involved in money laundering or the financing of terrorism.
“The legal sector should be aiming to set the standard for AML/CFT compliance. Our inspection of Kidd Legal highlighted a lack of understanding and apathy towards developing and maintaining policies and procedures. This warranted the issue of a formal warning.” says Mike Stone, Director of DIA’s AML Group.
“New Zealand has a strong reputation globally and there is confidence in our financial system. We have a responsibility to maintain this for Kiwis, and for those outside our borders who want to do business here.”
Kidd Legal are required to take immediate action to rectify all areas of non-compliance and will continue to be closely monitored by DIA officials. The issue of a warning by DIA will also be referred to the New Zealand Law Society.
Penalties for non-compliance with the AML/CFT Act can result in civil penalties of up to $200,000 in the case of an individual, and $2 million, in the case of a body corporate; and criminal penalties of imprisonment for up to two years or a fine of up to $300,000, in the case of an individual, and $5 million in the case of a body corporate.
The AML/CFT Act established a system to detect and deter money laundering and the financing of terrorism, and to maintain and enhance New Zealand’s international reputation while growing public confidence in the financial system.
The formal warning to Kidd Legal was issued on 27 January 2021 under section 80 of the AML/CFT Act.
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