Over the past decade, the world has witnessed a growing demand for greater transparency. At the heart of this movement is the desire to know that people listed in records or operating online are, in fact, real people. Identity verification and connecting this to records allows for an interconnected, 'natural person' centric registry system.
Connecting ownership structures of corporations, land, securities, and occupations to the natural person(s) they pertain can be verified by their identification documents.
Defining the Identity Verified Record
An Identity Verified Record functions as an autonomous record, encompassing data typically associated with an individual and considered indisputable within that person's context – through a verification process. Such data may include a person's date and place of birth or an identity number like a tax or health system number. Contact details, such as mobile phone numbers, residential addresses, and email addresses, are also recorded. Notably, the primary email address must be unique within the Verified Persons Record, as it may be utilized for searching for a verified person, for example, when appointing a person to a role within an entity.
Trust and Security
Identity-verified records play a crucial role in the digital transformation of registries. They serve as authenticated records, confirming that the individual or entity behind a process is genuinely who they claim to be. This verification process helps prevent unauthorized actions, false identities, and potential fraud, enhancing the security, integrity, and transparency of various functions within registries. Essential to both Federal and local governments, covering diverse areas such as land ownership, business licensing, and vehicle registration. These registries' accuracy, reliability, and security are of utmost importance, and VIRs (Verified Identification Records) are instrumental in achieving these goals.
Benefits to Citizens: The Power of Identity Verified Records
Implementing Identity Verified Records creates a streamlined and user-centric experience for citizens. Here is how:
Verify Once, Use Everywhere: One of the most significant advantages of Identity Verified Records is the "verify once, use everywhere" approach.
Once a citizen's identity is verified and recorded in an Identity Verified Record, that verified information can be populated across any registries they are attached to. This eliminates the need for repeated verification processes, saving time and reducing administrative burdens for citizens. Identity Verified Records represent a paradigm shift in how citizens interact with governmental services and registries.
The benefits extend beyond mere convenience, fostering a more responsive and citizen-centric governance model. As Identity Verified Records evolve and become more integrated into various governmental operations, their positive impact on citizens' lives will grow, marking a significant advancement in public administration and service delivery.
Articles depicting the number of fictitious records created in companies' registers could be a thing of the past as they are linked to a verified natural person who can be held accountable.
In Practice:
Australia
The Australian government introduced a Director ID regime as a regulatory response to the proliferation of Phoenix-like companies. A director identification number (director ID) is a unique identifier issued to directors. It is designed to help prevent false or fraudulent director identities. There are 2.7 million directors who require this I.D.
The Australian director ID is a 15-digit identifier given to a director (or someone who intends to become a director) who has verified their identity with the Australian Business Registry Service.
United Kingdom
Identity verification is one of the significant measures being introduced by the Economic Crime and Corporate Transparency (ECCT) Bill in the U.K. (United Kingdom). Despite tech advancements, identity fraud in the U.K. is growing, with around 1 in 10 people affected yearly. The most common type of identity fraud is credit card fraud, but stealing personal, medical, or financial information to access services or benefits is also becoming more widespread.
U.K. Companies House will implement a new identity verification process to help deter those wishing to start companies for illegal purposes. Anyone setting up, running, owning, or controlling a company in the U.K. must verify their identity to prove they are who they claim to be. For new companies and other registerable legal entities, this will mean that all directors (or equivalent) and people with significant control (PSC) must complete identity verification before or as part of the company incorporation process. Identity verification will make it much harder to register fictitious directors or beneficial owners, stopping most fraudulent appointments from reaching the register.[1]
New Zealand
As a member of the inter governmental Financial Action Task Force (FATF), New Zealand has committed to complying with its standards. Outside the corporate governance regulatory system, New Zealand has also extended the anti-money laundering and countering the financing of terrorism (AML/CFT) regime to cover more businesses (including real estate agents and conveyancers, lawyers, and accountants, some businesses that deal in expensive goods, and betting on sports and racing). Legislation being introduced within New Zealand to record beneficial owners of companies and limited partnerships will create unique identifiers for those individuals. The legislation proposes that there should be systems within the "New Zealand Companies Office to ensure that the individual applying is a natural person and is the person they say they are.
Canada
In the commercial realm, the Microsoft-owned LinkedIn platform announced in August 2023 that it is giving its 22 million Canadian members the option to verify their profiles by providing a copy of their government identification to a third-party company partnering with LinkedIn.
The optional verification method, offered to U.S. users since the spring, is meant to bolster trust in the platform and boost safety in a digital age where identity can be essential.[2]
United Nations
The U.N. Company Registry is a one-stop shop for everything related to U.N. suppliers. Think of it as a LinkedIn for companies that want to work with the U.N. It's designed to make life easier for U.N. agencies by giving them quick access to a vetted list of companies. This way, they can make more informed decisions regarding procurement. So, not only does it streamline the buying process, but it also adds a layer of transparency crucial for an organization like the U.N.
Key impacts of Identity Verified Records:
- Public Trust: Identity Verified Records foster public trust by providing transparency and reliability. Citizens can be assured that their information is handled securely and that governmental processes are transparent and accountable.
- Enhanced Security: By adding an extra layer of security, Identity Verified Records ensures that only verified individuals or entities can access or modify records, reducing the risk of unauthorized changes, identity theft, and fraudulent activities.
- Data Integrity: Identity Verified Records guarantee that the information within the registry is accurate and current. This integrity is essential for the smooth operation of governmental processes and legal compliance.
- Streamlined Processes: By automating the verification procedure, Identity Verified Records make processes more efficient and streamlined, minimizing manual errors and accelerating transactions.
- Compliance and Regulation: Identity Verified Records help local governments comply with various laws and regulations by providing a robust framework for identity verification.
The Future of The Identity Verified Record and Its Challenges
Get ready for the Identity Verified Record (IVR) revolution. Exclusive to our Verne - Registry Aware Platform, IVR is already shaping our current projects. With the U.K. and Canada eyeing legislative changes to embrace IVR, it is poised to redefine registry implementation standards.
Beyond the complexities of legislative reforms and the implementation of Identity Verified Records in registers, the most significant challenge is the repercussions of heightened transparency.
There will be revelations with the layers of shell companies peeled back to their owners and fictitious non-verified records removed from registers. Media narratives and our understanding must adapt as public acceptance of ownership realities sinks in.
Managing societal changes aside, we are excited to see what the simplified, verified, transparent registry future holds. The ongoing proliferation of the Identity Verified Record in registers signifies a substantial step towards increased transparency in the global corporate landscape.
References:
[1] https://companieshouse.blog.gov.uk/2022/12/12/companies-house-reform-identity-verification/