Digital ID Standard and Safe Harbour: A conveyancer’s guide
AML Services Manager
On 12th March 2021, the HM Land Registry Digital ID Standard came into effect.
Why is this important?
If the Digital ID Standard is followed and strict requirements are met, a conveyancer will reach ‘Safe Harbour’. This is the ultimate protection level for conveyancers. HM Land Registry (HMLR) will not pursue any conveyancer in any recourse claim, resulting from the registration of a fraudulent transaction on the grounds that identity checks were inadequate.
What do I need to do?
- Understand the protection Safe Harbour offers (HMLR will not seek recourse).
- Understand and review your current processes.
- Ask your technology provider, how can you reach Safe Harbour through their platform?
- Review your policy controls and procedures and update accordingly.
What is the Digital ID Standard?
Digital ID Standard is an enhanced level of check and is defined by reference to a set of requirements.
The standard is founded on the principles within the Government’s Good Practice Guide (GPG45). The requirements involve biometric and cryptographic checking of identity and verification that the individual(s) are genuine parties to a registrable transaction.
When followed correctly, the standard constitutes what is regarded by HMLR as a ‘discharge of the duty’ to verify the identity of a party to a registrable transaction.
A conveyancer and/or conveyancing firm who adopts this approach will have fulfilled their obligation to take reasonable steps in relation to the requirement to verify their client’s identity. In other words, the conveyancer will reach ‘Safe Harbour’.
What is Digital ID Standard ‘Safe Harbour’?
If you, as a conveyancer, carry out the steps described in the standard, HMLR will not pursue any recourse claim against you resulting from the registration of a fraudulent transaction on the grounds that your identity checks were inadequate.
What are the requirements to reach Safe Harbour?
The first three requirements must be carried out by all conveyancers acting for a party to the transaction. The fourth requirement needs to be met by the conveyancer representing a transferor, borrower or lessor.
1. Obtain evidence
You must identify if the person you’re representing is who they say they are.
To meet this requirement, they must hold a form of evidence that can be checked by verifying cryptographic security features within that evidence. The security features must include an electronically held photo of the identity against which biometric facial recognition checks can be made. This can be a biometric passport, identity card or UK biometric residence permit.
2. Check the evidence
You must check that the evidence is genuine to ensure it has not been forged and is both in date and current.
Your technology provider should verify that the documentary and cryptographic security features of the evidence are genuine. The chip within the evidence must be read using Near Field Communication (NFC) by providing any required cryptographic keys. It will then:
- Check the digital signature.
- Check the signing key.
- Extract the biometric information needed.
*Note: using a photograph of the document, or of the Machine Readable Zone, will not meet the requirement
3. Match the evidence to the identity
You must ensure that the person presenting the information matches the photo in the evidence provided.
Your technology provider must do this by making sure that the biometric information captured from a ‘liveness check’ matches the biometric information in the chip, cross-matching this with the genuine evidence obtained.
4. Obtain evidence to ensure the transferor, borrower or lessor is the same person (or entity) as the owner
You must ensure you connect the individual to the property by obtaining two pieces of evidence (defined in the list within Practice Guide 81). Check that the name and address of the individual claiming the identity match those on the evidence provided.
What type of entity can the Digital ID Standard be applied to?
The Digital ID Standard can be applied to both natural persons and corporate entities.
Practice Guide 81 sets out the Digital ID Standard conditions for companies. One key difference to note is that a conveyancer may rely on the results of the checks for a period of up to six months. If the signing occurs more than six months after your original checks were carried out, you will need to complete the checks again.
What are the benefits of using technology to meet Digital ID Standard?
Using technology in your arsenal in the fight against money laundering comes with benefits beyond the Digital ID Standard. Other common benefits are:
- Enable remote/ distance without interruption.
- Minimise reliance on human control measures.
- Improved experience of all parties, saved costs and time spent.
- Enhanced security.
- Deterrent to criminals.
- Multiple source screening.
- Internal controls consistency.
Watch our webinar to find out more about Safe Harbour
While this is not a compulsory standard, hopefully this guide outlines the many benefits it offers. Would you like to learn more about how Thirdfort Standard ID can help your firm consistently reach Safe Harbour for all of your transactions? Adam from our Customer Success team will walk you through it in our on-demand webinar. Just click the link below to watch it now.
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