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FINTRAC releases new guidance on digital identity verification

Tuesday, 26 November, 2019

In line with the public consultation on the Financial Action Task Force’s (FATF’s) draft guidance on digital identity, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has updated its guidance, Methods to verify the identity of an individual and confirm the existence of a corporation or an entity other than a corporation.

The aim of the FATF consultation is to develop a system by which governments and financial institutions can undertake effective identity authentication, in a move that will support the anti-money laundering crackdown in jurisdictions globally.

FINTRAC’s guidance follows amendments to identity verification regulations in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (S.C. 2000, C.17), which allow reporting entities to verify individuals’ identities through digital methods.

If an individual is present, the reporting entity can verify government-issued identity by looking at the characteristics of the original physical document and its security features and being satisfied that it is authentic as issued by the competent authority, and is valid and current.

If the individual is not present, the guidance states that the identity must be “determined by using a technology capable of assessing the document's authenticity”; and, furthermore, that “the individual presenting the government-issued photo identification document matches the name and photo of the person in the authenticated document provided.”

FINTRAC confirms that it is not sufficient for reporting entities to “just view a person and their government-issued photo identification document through a video conference or any other type of virtual application. You must use a software or some type of technology that would be able to authenticate the government-issued photo identification document.”

According to the guidance, the “dual process method” can also be used, whereby reporting entities must refer to two of:

  • information from a reliable source that includes the individual's name and address;
  • information from a reliable source that includes the individual's name and date of birth; or
  • information that includes the individual's name and confirms that they have a deposit account, credit card or other loan account with a financial entity.

The FATF consultation on digital identity closes this Friday (November 29, 2019).

Sources