After an agency files a suspicious activity report about a vendor, the vendor phones the salesperson and asks whether the agency has "reported me to anyone". Under s 46 of the AML/CFT Act 2009, what must the salesperson do?
Correct Answer
D) Not disclose the report or anything likely to reveal that it exists.
Section 46 of the AML/CFT Act protects any suspicious activity report and any information that discloses, or is reasonably likely to disclose, that a report exists. A reporting entity must not disclose that information except as the Act allows. The salesperson must not confirm or hint at the report and should refer the call to the compliance officer.
Why This Is the Correct Answer
Section 46 forbids disclosing, directly or indirectly, that a suspicious activity report exists.
Why the Other Options Are Wrong
Option A: Tell the vendor about the report, because clients are owed full disclosure.
Section 46 prohibits disclosing a suspicious activity report or information likely to reveal its existence, except as the Act permits.
Option B: Confirm the report was made but decline to give the vendor its contents.
Even confirming that a report exists discloses information protected by s 46.
Option C: Refer the vendor to the Real Estate Authority, which can confirm the report.
Reports go to the Police Commissioner, not the Authority, and pointing the vendor anywhere to confirm one would still tip them off.
Background Knowledge for Compliance
Source: https://www.legislation.govt.nz/act/public/2009/0035/latest/whole.html
Exam Tip for Compliance
Never tip off: do not confirm, deny with hints, or discuss a suspicious activity report with the customer.
Common Mistakes to Avoid on Compliance Questions
- •Thinking the duty of disclosure to a client overrides the AML/CFT confidentiality rule.
More Compliance Questions
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Under the Fair Trading Act 1986, which statement about advertising a property for sale is correct?
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An agent holds $180,000 in trust across four transactions. One agreement is validly cancelled because the purchaser's finance condition was not met, and both parties' lawyers confirm the $60,000 deposit is to be refunded to the purchaser. What is the correct trust account procedure?
Under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, what is the minimum threshold for conducting customer due diligence when establishing a business relationship in real estate transactions?
- → An international client buying a $2.8 million commercial property provides a copy of their overseas passport but refuses any further identity checks or information, claiming diplomatic immunity. How should the agent proceed under AML/CFT requirements?
- → Which statement best describes the trust account requirements under the Real Estate Agents Act 2008?
- → An agency's trust account reconciliation reveals that interest earned on client deposits has been retained by the agency rather than distributed to clients. This practice is:
- → According to trust account regulations, how long must real estate agencies retain records of trust account transactions?
- → What is the primary purpose of the Consumer Guarantees Act 1993 in relation to real estate services?
- → Under the Consumer Guarantees Act 1993, if a real estate agent fails to exercise reasonable care and skill when marketing a property, what remedy might be available to the client?
- → A real estate agency's trust account shows a shortage of $5,000 during a routine audit. What is the most serious disciplinary order available under the Real Estate Agents Act 2008?
- → A real estate agent advertises a property as having a 'new roof' when they know it was repaired but not replaced. A buyer purchases based on this information and later discovers the truth. Which Acts could potentially apply to this situation?
- → Which statement best describes the primary purpose of trust accounts in real estate transactions?
- → A property advertisement states 'Guaranteed rental return of 8% per annum', although no one has contracted to pay that return. Under the Fair Trading Act 1986, this statement is:
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