PAPERWORK IN A DIGITAL AGE

Posted by Rachel Holland on March 21 2023 in News

The pandemic and the electronic age have significantly impacted the way we use documents. When it comes to knowing what documents must be kept in their original form, there is considerable confusion.

Anti-Money Laundering and Countering Financing of Terrorism legislation (AML) has intensified a client’s need to understand the difference between original, certified, and verified documents. So, let me clarify where this stands in 2023:

Original documents 

The list of documents that must be kept in their original form which have evidence of being signed by a pen (also known as wet-ink signature) has been reduced over the years. There were temporary exceptions made during the Covid period due to the inability to meet in person. However, those exceptions have now been lifted. The current list is as follows:

• Wills.
• Codicils.
• Probates.
• Memorandum of Wishes.
• Enduring Powers of Attorney.
• Powers of Attorney — Deed of Delegation.
• Leases (and all associated variations) and occupational licenses until the final expiry date, and seven years afterward.
• Trust documents (note that under the new trust law, there is now an obligation for the trustees of the trust to keep original core documents relating to the trust):

1. Trust deed (and any other document that contains terms of the trust).
2. Any variations made to the trust.
3. Records of the trust property.
4. Records of trustee decisions.
5. Any written contracts entered into during the trustee's trusteeship.
6. Accounting records / financial statements.
7. Documents of appointment, removal, and discharge of trustees.
8. Any letter or memorandum of wishes.

All other documents can be signed, scanned, and filed in electronic format and the original destroyed. They can also be electronically signed, subject to certain requirements being met.

Copies – Certified and Verified 

If you are required to provide a copy of an original document to a third party, then you have two options.  

1. Verification
   You can take the document to a third party who will sight the original and make a copy of it – either by video (usually reserved for identification documents such as passports) or in person.  A copy of the original is generally taken and signed by trusted personnel employed by the third party.  This is called a verified document and the employee’s signature verifies that the copy is a true copy of the original document.  It does not verify that the original document was genuine, e.g., passport or visa.
2. Certification 
   You can take the original document to a person who meets the requirements of a person qualified to certify a document according to the law of the country where the third party resides (common examples are lawyers and Notary Public). This is called certification. The original will be photocopied, stamped, and signed by a qualified person as a certified true copy of the original.  This original certified copy must then be posted to the third party to retain.

Identity 

When supplying certified or verified copies of documents as evidence of identity, photographic identification must also be included. The documents must then be provided to the certifier and/or verifier by the person seeking identification to ensure the photo is a true likeness of the person. This can be done by video if necessary. 

Proof of address

And finally, verification of a residential address is usually a requirement. The person being identified is asked to supply a utility bill (or similar) with the person’s name and address on it, thereby proving the person’s place of residence. 

But in today’s world where the bills are usually provided by email, it’s often very difficult to provide an original document that isn’t simply a pdf. One option is to provide a bank statement that has been stamped as a legitimate document by your bank. Another option is to provide your address and allow the third party to run this through an electronic verification check. This will check Land Information New Zealand, power company, council rates, water rates, and databases and return a “pass” or “fail”. In some cases, using electronic verification will avoid the need to have verified or certified copies of the identity documents (simple copies will suffice). However, note that electronic verification is not possible where the person has an overseas passport or resides overseas.

Address information is most commonly provided for AML due diligence purposes and is therefore a third-party “know-your-client” risk assessment as to how far the third party is required to go to meet their AML Supervisor’s threshold for adequate verification. For lawyers, we may have visited the client at their address, particularly in cases where clients reside in retirement villages, which happens frequently and needs to be noted.

Hopefully, this has been a helpful succinct summary of what is acceptable regarding the retention and provision of original documents. If you are unsure, please speak to the third party to clarify what their specific requirements are.

Rachel Holland | Practice Director | Rachel.Holland@shieffangland.co.nz