Melissa AU Team | AML, Australia, Identity Verification, KYC | AML, Australia, identity verification, KYC

Businesses need to know their customer details not only to be able to assess their needs but also to comply with governmental KYC and AML regulations. In Australia, any business that provides services listed under section 6 of the AML/CTF Act needs to perform a certain level of identification for all their customers. What’s more, AUSTRAC, the Australian Government agency is due to amp up the identification procedures and due diligence required.

Australia’s AML/CTF Program

Australia allows the reporting entities to decide how likely a customer is to use the business for terrorism or money laundering activities based on its size and complexity after taking into account who the customers are, the services provided, how these services are provided and the foreign jurisdictions they are subject to. 

There are 2 parts to Australia’s AML/CTF Program; the processes and procedures used to identify and manage risks and secondly, the procedures used to identify and verify customers and beneficial owners.

Know Your Customer (KYC)

KYC is an important part of the AML/CTF Program. Reporting entities must apply KYC procedures to all customers and document the procedures used for different customers. Verification of customer identities should not be limited to customer onboarding but must be conducted regularly to maintain a high-quality database. Data must be collected and verified both for individual customers and non-individual customers such as companies, trusts and associations. KYC policies must be designed to ascertain that

• Individuals are who they claim to be
• Non-individual customers are real entities. In such cases, the identity of the beneficial owner must be known and verified.

Verifying customer identities makes the reporting entities aware of any suspicious or unusual activities and reduces the risk of their organization being used to finance terrorism or launder money.

KYC For Individuals In Australia

At the very minimum, businesses must know and verify all their customers’ full names and either their date of birth or residential address. The verification may be based either on documentation or electronic data. Only when these details have been verified to be complete and accurate can the business provide any service to the customer. Like customers, employees must also undergo verification to assess their risk level.

Document Verification

In terms of document verification, the customer’s identity may be verified using the original copy of a primary identification document with or without the person’s photograph or the original copy of a secondary identification document.

Some of the documents that may be used include passports, driver’s licenses, birth certificates and notifications from Australian government agencies. Addresses can be verified with an Australian citizenship certificate, current utility bill, bank statement or document issued by the Australian government.

Data Verification

Businesses choosing to verify a customer’s data with electronic data must check to see that the data is accurate, up-to-date, comprehensive, secure and verified by an independent, reliable source. The data must also be maintained by a legislated government body.

There may be some citizens who do not have conventional forms of ID such as a passport or a driver’s license. For example – the Aboriginal and Torres Strait Islander customers or customers who have lost their belongings in a fire.

In such cases, a flexible approach may be taken or secondary identification documents may be used to verify their identity. This includes government correspondence, self-attestations, official stationery, etc.

KYC For Entities In Australia

Just as you need to verify an individual’s identity, you also need to verify the identity of an entity such as a company, trust or association and the identity of the entity’s beneficial owner. A beneficial owner is an individual who owns a minimum of 25% of the company’s equity and has the right to make decisions about the company’s operations and finances.

According to the Australian standard for identity verification, you must be reasonably satisfied that the entity exists and is what it claims to be. The details that need to be collected and verified to achieve this are:

• Full name of the company
• Company’s status of registration with the Australian Securities & Investments Commission. Is it a public or a private company?
• Australian Registered Body Number (ARBN) or Australian Company Number (ACN)

Ensuring Compliance And Customer Satisfaction With Melissa

Melissa understands the reporting needs of Australian businesses and offers real-time identity verification services to establish a customer’s identity. It helps businesses comply with the country’s AML/CTF Program, Politically Exposed Persons (PEP) and Bank Secrecy Act (BSA) without any inconvenience to the customer. Services can be tailored to maintain quick onboarding and seamless checkouts.

Melissa checks and verifies identities against a global watchlist to ensure that businesses are at minimal risk for fraud. In addition, customers are scored with detailed firmographic and demographic data for better targeting. While they are being verified, the records are also enhanced with missing details such as phone numbers, email addresses, etc. to ensure they are complete.