AML Overview

How 2Shakes Helps

We are experts in automating your onboarding processes, and we have extended our existing cloud software to deliver a range of smart AML/CFT features to help you comply. With 2Shakes your  AML Customer Due Diligence is embedded as part of the onboarding process.  So you use a single application to get an automated, efficient, repeatable and auditable CDD solution that is securely stored for you in the cloud.

What will I need to do?

Businesses (like you) who provide ‘in-scope’ services need to report on that, and are referred to as AML Reporting Entities. Reporting Entities need to set up an AML/CFT Program with a designated Compliance Officer and perform a Risk assessment. They need to vet and train staff and file an annual report to DIA. They also need to report any suspicious activities or prescribed transactions to the police. If you provide in-scope services you will be considered a reporting entity, and have obligations under the Act. Day to day, you will need to perform Due Diligence checks on your customers. If you do not comply with legislation then the Supervisor can enforce penalties. Here’s how it fits together.

Who do I need to do Customer Due Diligence on?

Customer Due Diligence are checks that you need to perform on ‘natural’ people who are associated with the customer you provide services to.  Section 11 of the Act states

A reporting entity must conduct customer due diligence on:

a). a customer,

b). any ‘beneficial owner’ of a customer,

c). any person acting on behalf of a customer.

Beneficial Owners are people that:

• own more than 25%.

• have effective control

• the transactions conducted on behalf of

Determining who you need to perform customer due diligence on can be complicated.  For example shares in a company can be owned by another company, whose shares are also owned by another company.  This can look a bit like this…

In this example Customer Due Diligence needs to be carried out on John – as the Director who is in effective control of the company – and on Don – a shareholder who owns a company at three levels below the customer, through which he owns more than 25% of Cards Ltd!

How 2Shakes Helps

2Shakes has smart recursive look up technology that goes through the levels of company ownership. We integrate with NZ Companies Register using the NZBN to help you identify the people and entities associated with your customers.  We show you the shareholders, directors, possible trusts, possible foreign companies and possible listed companies for clients listed on the Companies Register. That way 2Shakes shows you an aggregate picture of all the different people and other entities associated with the companies you are signing up.  And unlike doing those searches manually, where we have been told of it taking a person days to complete, 2Shakes does it for you in seconds!

More on CDD..

CDD stands for Customer Due Diligence.  The Act outlines 3 levels of CDD:

The Department of Internal Affairs also offers 3 options for verification of identity

How 2Shakes Helps

You can record the CDD level in 2Shakes, and then use 2Shakes to record identity & address verification, all as part of the onboarding process. You can choose how you do this, either manually or electronically.

In 2Shakes, your clients can now do everything needed to sign up in one electronically signed step:

• Sign your services agreement, agreeing fees and Ts &Cs

• Authorise you to act on their behalf with Inland Revenue, ACC, Companies Office

• Authorise you to act on their behalf with private organsations

• Consent to and complete Identity and Address checking

Our system integrates with third party Identity Verification services.  This means we can automatically electronically verify both identity credentials (NZ passport or Drivers License) & NZ addresses against trusted external databases. At the same time we check to see if the customer is a foreign Politically Exposed Person (PEP).

Client forgot to bring proof of address?  Client forgot to bring their passport?
With 2Shakes you can email links to clients to get them to verify their identity and address remotely from their own computer or smart phone.

Enhanced CDD? You can record notes and uploading files every step of the way. 2Shakes’ Hints and Tips gives examples of the types of source of funds/proof of wealth documents your client could provide.

Find out more about how electronic Identity Verification (eIDV) works, when you should use it and how much it costs.

Audit Records

AML/CFT requires reporting entities to be audited every two years by an Independent Appropriately Qualified Person.  This audit is to determine the adequacy and effectiveness of your AML/CFT programme. For audit you will need to provide access to files, customer identification records, transactions and/or outputs from your systems.

See DIA AML COP link for more information.

How 2Shakes Helps

In 2Shakes you can make notes and upload documents at every step of the way through onboarding. Our software captures a record of what you did, and what the result was. Our electronic identity verification reports show the results for each external data source. And when you need it, we have everything available for you from anywhere, on any device, in our secure, highly-available Microsoft Azure cloud datacentre – so everything is in one place for audit purposes.

2Shakes recognises that AML checks sometime takes time. Where there are trusts or non-resident or foreign owners you may need to chase after the evidence or information you need. Our system allows you to get your agreement signed, while you wait for your AML/CFT CDD requirements to be completed. We make it easy to keep track of where all you customers’ agreements and AML statuses are at, whatever is required by your AML/CFT policy and procedures.

And once done, 2Shakes has a section for your business’ AML Compliance officer to do a final review and confirmation check that AML CDD is complete.