Since Realaml only works with law firms, the New Zealand National Risk Assessment (NRA) 2024 directly affects your business in several key ways. Law firms are highlighted as high-risk for money laundering, meaning compliance requirements will increase, and demand for Realaml’s AML tools will grow.
1. Law Firms Are Officially a High-Risk Sector
Lawyers & conveyancers are identified as "gatekeepers" for money laundering.
Many law firms are not meeting AML/CFT obligations, with some failing to conduct proper CDD.
The most common red flag is clients refusing to provide Source of Wealth (SoW) documentation.
Trust accounts are being used to launder illicit funds.
🔹 What This Means for Realaml:
✅ Law firms will be under more pressure to strengthen their AML processes.
✅ Demand for robust IDV, UBO verification, and document validation will increase.
✅ Realaml can market itself as a “compliance partner” for law firms adapting to these new risks.
2. Increased AML Scrutiny on Property Transactions
44% of law firm SARs (Suspicious Activity Reports) were related to property transactions.
Clients are trying to purchase real estate without disclosing their Source of Funds.
Trust accounts and nominee directors are being used to obscure ownership.
🔹 What This Means for Realaml:
✅ Law firms will need stricter IDV and Source of Wealth verification for real estate transactions.
✅ Realaml’s audit trail and document collection tools can help firms meet AML requirements.
✅ More law firms will require automated AML tools to streamline compliance.
3. Stricter Compliance & More Reporting for Law Firms
Only 20% of law firms are submitting SARs, despite being a high-risk sector.
The Department of Internal Affairs (DIA) has issued formal warnings to law firms for non-compliance.
Law firms that fail to comply will face increased audits and potential fines.
🔹 What This Means for Realaml:
✅ Law firms need better tools to detect, report, and prevent suspicious activity.
✅ Realaml can position its IDV and AML checks as a way to avoid regulatory penalties.
✅ Firms will require automated systems to streamline SAR reporting and compliance tracking.
4. Trusts & UBO Verification Are Key Focus Areas
Lawyers are helping clients set up trusts and companies that criminals use to launder funds.
Foreign trusts are a major vulnerability, with criminals using them to move illicit wealth into NZ.
Lawyers acting as nominee directors or trustees create compliance risks.
🔹 What This Means for Realaml:
✅ **Law firms will need stronger UBO verification and trust deed analysis tools.
✅ Realaml’s trust verification solutions can ensure law firms meet compliance standards.
✅ More demand for automated entity verification to detect hidden beneficial owners.
5. Foreign Money & International Transactions Are a Risk
Foreign-generated illicit wealth is being placed into New Zealand via law firms.
Clients are using foreign trusts and offshore accounts to fund purchases.
Banks and law firms are failing to detect money laundering from high-risk jurisdictions (China, UAE, Malaysia, etc.).
🔹 What This Means for Realaml:
✅ Law firms will need enhanced due diligence (EDD) for foreign transactions.
✅ Realaml can offer stronger ID verification for international clients.
✅ Firms handling offshore clients will require compliance automation to reduce risk.
Opportunities for Realaml
🚀 Law firms will need better IDV, KYC, and UBO verification solutions to comply with tighter AML regulations.
🚀 Realaml’s tools can help law firms avoid regulatory penalties and improve AML processes.
🚀 More firms will seek automated compliance tools to reduce the workload on legal teams.
This NRA validates Realaml’s role in the legal sector and creates new opportunities for expansion into trust verification, document validation, and AML automation for law firms.