AML, KYC and Identity Verification in Australia

Australia’s regulatory landscape can present complex challenges for organizations trying to achieve compliance while meeting customer expectations for fast, convenient onboarding experiences.

Whether organizations are onboarding people or businesses, the country has a host of requirements designed to defend against financial crimes.

A Brief Overview of Australia AML/KYC Verification Requirements 

The following Australian laws, authorities and regulations govern Anti-Money Laundering (AML), Know-Your-Customer (KYC) and identity verification.

Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)

The act provides the regulatory framework for AML and counter-terrorism financing measures. It requires that designated entities, including financial institutions, verify customers’ identities, conduct ongoing due diligence and report suspicious transactions.

Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007

The rules provide guidance for following the AML/CTF Act, including how to meet the requirements for identity verification, ongoing due diligence and recordkeeping.

Australian Transaction Reports and Analysis Centre (AUSTRAC)

AUSTRAC is the government’s financial intelligence agency responsible for detecting and preventing money laundering and terrorism financing. It also helps regulated entities comply with AML/CTF obligations. 

National Identity Proofing Guidelines

The guidelines provide a consistent and reliable approach to identity verification across public and private sectors.

Australian Securities & Investments Commission

The commission is the regulator for the country’s corporate, markets, financial services and consumer credit sectors.

Australian Prudential Regulation Authority

The Australian Prudential and Regulatory Authority, which regulates financial services institutions, requires that regulated entities comply with prudential standards.

Privacy Act and the Australian Privacy Principles

The federal act and principles apply to government agencies and organizations with an annual turnover of more than $3 million. Most states and territories also have data protection legislation. 

AML Programs in Australia

Organizations conduct KYC checks to understand the risk a customer poses and assess if that person’s activities could be linked to financial crimes.

Additional AML/CTF steps include:

• Creating verification procedures that correspond to a customer’s risk level
• Identifying politically exposed persons 
• Spotting and managing identity data discrepancies
• Implementing ongoing customer due diligence and beneficial ownership monitoring
• Developing internal controls, including a dedicated compliance officer and employee risk-awareness training
• Regularly assessing and refining internal programs

Identity Verification in Australia

When verifying people in Australia, organizations must collect and verify a full name and either an address or birth date. Two powerful data sources are the Document Verification Service and the electoral rolls. 

The Document Verification Service allows authorized entities to electronically verify evidence of identity issued by government agencies at the federal, state and territory levels. The electoral roll provides the ability to verify an individual’s data.

The verification process can either use documentation or electronic data.

Reporting entities can’t provide their services until they complete customer due diligence, and it’s up to them to determine the level of risk a customer poses and whether data or document verification is warranted.

There are three acceptable types of documents for verification.

• Identity document with a photo, such as a driver’s license or passport
• Identity document without a photo, such as a birth certificate
• Secondary identification document, such as notifications from an Australian government agency

A passport is acceptable up to two years after it expires, but all other documents should be current.

For data verification, AUSTRAC provides factors to consider. Is the data:

• Accurate
• Secure
• Current
• Comprehensive
• Verified by a reliable, independent source
• Maintained by a government body under legislation
• Able to be additionally authenticated

Business Verification in Australia

Australia also has requirements for verifying business entities, including companies, associations or trusts. Organizations also must verify the identity of anyone who is a beneficial owner of an entity. In Australia, a beneficial owner owns 25% or more of an entity or makes decisions about the entity’s finances and operations.

There are two numbers that empower organizations to perform business verification due diligence.

Australian Business Number (ABN)
The 11-digit ABN identifies all business entities registered in the Australian Business Register and is used in commercial transactions and dealings with the Australian Taxation Office. An ABN is issued to all businesses.

Australian Company Number (ACN)
An ACN is a 9-digit registration number given only to companies. The Australian Securities and Investments Commission issues ACNs.

Navigating Verification and Compliance in Australia

Trulioo state-of-the-art technology and local expertise can help organizations navigate the complexities of Australia’s regulatory landscape while streamlining person and business verification. 

The Trulioo suite of in-house verification capabilities covers the world and eliminates the need for multiple point solutions. Organizations can blend business and person verification to gain deep insights into entities and their beneficial owners. 

Companies can combine data and document verification to ensure they’re onboarding processes align with a customer’s risk level. Trulioo onboarding workflows automatically route users to the verification service that best fits any scenario as organizations expand across borders, face evolving fraud threats and adapt to shifting regulations.

No matter an organization’s verification needs, Trulioo stands as the trusted partner for any market anywhere in the world.