CDD to be undertaken on persons acting in the capacity as Nominee

In New Zealand, under AML regulations, when dealing with a nominee director or nominee general partner, a reporting entity is required to conduct "customer due diligence" which means verifying the identity of the beneficial owner behind the nominee, including their source of funds and details about their activities, to mitigate money laundering risks; essentially, you need to know who the real person is behind the nominee position. 

Key points about AML nominee requirements:

• New regulations:

  The Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Amendment Regulations 2021 introduced this specific obligation for nominee directors and general partners. 

• Customer due diligence:

  Reporting entities must conduct enhanced due diligence on nominee individuals, going beyond standard identification checks to fully understand the beneficial owner. 

• Compliance responsibility:

  Failure to comply with these regulations can be considered a breach of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. 

What information might be required for a nominee AML check:

• Full name of the nominee

• Beneficial owner details (name, address, date of birth)

• Proof of identity for the beneficial owner (passport, driver's license)

• Source of funds information

• Details about the nominee's role and responsibilities 

AML Partners recommends that Reporting Entities either amend their application or ask if anyone is acting in the capacity of nominee. This should be confirmed in writing by the customer so you meet this obligation.

Customer due diligence is to be undertaken for the person appointing the nominee and enhanced due diligence is to be undertaken on the customer.