AML/CFT Barristers exemption to certain provisions
The Associate Minister of Justice, under section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act), has exempted barristers as a class of reporting entities from provisions of the Act as set out below.
Before going into the details, I want to acknowledge that gaining this exemption required a great deal of work and we are indebted to Dr Derek Johnson and barrister, Ollie Neas, who worked closely with me on this project. Their input was substantial and significant in making this exemption a reality. Our thanks are also owed to the Minister, the Ministry of Justice and to the Law Society for their support.
In the first place, it is important to repeat a point that we have made in our previous communications on the issue: in practice, the number of barristers caught by the AML/CFT regime is relatively small. The regime applies only to barristers falling within the Act's definition of "designated non-financial business or profession". As we have discussed in previous articles, that definition will, for a barrister, tend to capture only involvement on the part of the barrister, in the ordinary course of their business, in advising on, documenting or effecting a transaction involving real property. Most barristers will rarely be involved in the transactional aspects of conveyancing or receiving or holding money on another’s behalf.
But for those who are caught, the regime imposes a range of obligations—from customer due diligence to suspicious activity reporting and record keeping requirements. Given the limited administrative resources of most barristers, these obligations are onerous. Accordingly, the exemption is an important measure.
A copy of the exemption letter is attached below. As foreshadowed, it applies to barristers who receive instructions from a solicitor (other than an in-house lawyer, or an in-house lawyer employed by the Crown) in respect of a client. It applies also to barristers who are instructed by the Crown (subject to suspicious activity reporting requirements).
Please note: Barristers captured by the definition of "designated non-financial business or profession" who are instructed directly by clients, must comply fully with all provisions in the Act.
The exempt sections can be found on this table and as a pdf file below.
|Section||Purpose||Instructions from a solicitor (non-inhouse counsel)||Instructed by the Crown|
|11||customer due diligence||Exempted||Exempted except where ss 2(1) and 22A apply|
|12||reliance on risk assessment when establishing level of risk||Exempted|
|14 to 21||standard and simplified customer due diligence||Exempted||Only exempted for standard customer due diligence – ss 14 -17|
|section 22(1 ), (2), and (5)||circumstances in which enhanced customer due diligence applies||Exempted||Exempted for subsections (2) and (5) - circumstances in which enhanced customer due diligence applies|
|sections 22A to 25||enhanced customer due diligence||Exempted|
|section 26||politically exposed person||Exempted||Exempted|
new or developing technologies, or products, that might favour anonymity
|31||ongoing customer due diligence and account monitoring||Exempted||Exempted|
|37 to 39||prohibitions||Exempted|
|56 and 57|
reporting entity must have AML/CFT programme and AML/CFT compliance officer; andminimum requirements for AML/CFT programmes
|58 and 59|
risk assessment; and
review and audit of risk assessment and AML/CFT programmes
|59B||who carries out audit||Exempted||Exempted|
|60||annual AML/CFT report||Exempted||Exempted|