On Monday an agency's compliance officer forms a suspicion that a vendor's sale is linked to laundering. Under s 40 of the AML/CFT Act 2009, by when must the agency report it to the Police Commissioner (the Financial Intelligence Unit)?
Correct Answer
A) As soon as practicable, but no later than 3 working days after forming the suspicion.
Section 40(1) of the AML/CFT Act requires a reporting entity other than a high-value dealer or law firm to report suspicious activity to the Commissioner as soon as practicable, and no later than 3 working days after forming its suspicion. Law firms have 5 working days. Real estate agencies are held to the 3-working-day limit.
Why This Is the Correct Answer
Section 40(1) sets 3 working days for reporting entities such as real estate agencies.
Why the Other Options Are Wrong
Option B: Within 20 working days, the same deadline as for prescribed transaction reports.
Twenty working days applies to prescribed transaction reports under s 48A; suspicious activity must be reported within 3 working days.
Option C: Within 5 working days, the deadline that applies to every reporting entity.
Five working days applies to law firms under s 40(2); other reporting entities have 3 working days.
Option D: Only after the sale settles, so the report can include the final figures.
Reporting is due within 3 working days of forming the suspicion, not after settlement.
Background Knowledge for Compliance
Source: https://www.legislation.govt.nz/act/public/2009/0035/latest/whole.html
Exam Tip for Compliance
Suspicious activity report: 3 working days; prescribed transaction report: 20 working days.
Common Mistakes to Avoid on Compliance Questions
- •Mixing up the suspicious activity report and prescribed transaction report deadlines.
More Compliance Questions
A real estate advertisement states 'Best value in the area' without any supporting evidence. Under the Fair Trading Act, this statement is:
Under the Fair Trading Act 1986, which statement about advertising a property for sale is correct?
A client provides a bank cheque for $30,000 as a deposit and mentions recently selling cryptocurrency to fund the purchase. Under AML/CFT requirements, what is the appropriate next step?
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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Twelve working days after receiving a deposit, an agency gets a letter from the buyer's lawyer raising a written requisition on the title. The vendor wants the deposit released. Under s 123(3) of the Real Estate Agents Act 2008, what applies?