Money laundering is a common tool used by criminals around the world in an effort to disguise the origin of their funds. Money laundering can make money generated from fraud, drug dealing and other illegal activities appear legitimate. In an effort to counteract money laundering, the New Zealand Government introduced the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT) in 2009.
Many financial service providers have abided by this legislation since the Act was introduced over 10 years ago. More recently, real estate agents have been obligated to comply with this Act. Real estate agents must operate under the Act so that criminals are unable to disguise their illegal funds as real estate.
If you are looking to buy commercial real estate, or any real estate for that matter, you can expect to go through quite a stringent identification process that verifies your identification. You will need to provide various documentation regarding your funds and transactions to ensure that their origins are legal.
Before your property investment can take place, a real estate agent will have to verify the source of your funds. This is why it is important to have all your financial documentation in order.
In some cases, a real estate agent will need to establish the source of the funds for the transaction and source of wealth (i.e. how those funds got there in the first place and how that money was obtained).