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This note considers the 'hundred points' identity verification scheme in Australia under the Financial Transaction Reports Act 1988 and the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

It covers -

It supplements discussion elsewhere on this site regarding privacy principles, the Australian privacy regime, identity theft, security and forgery.


Identity verification in Australia has come to leverage the '100 Points' requirement under the 1988 Financial Transaction Reports Act (FTR), federal legislation initially enacted as the Cash Transactions Report Act 1988. That requirement is now used for a wide range of purposes, including obtaining a mobile phone and gaining a driver's licence.

The legislation established the Australian Transaction Reports & Analysis Centre (AUSTRAC), a federal government agency that serves as the national anti-money laundering regulator and specialist financial intelligence unit.

It also established mandatory reporting by a wide range of financial services providers (including banks, bullion dealers and solicitors) and the gambling industry. That reporting involves customer identification, with identity being verified through provision of documentation that in aggregate is equivalent to one hundred points. A 'primary' document (such as a passport) that features a photograph, is tamper-resistant and was obtained through a process that includes some checking is for example worth 70 points.

FTR data is used in action against welfare fraud, tax evasion, money laundering and other offences. It is provided to a range of federal and state/territory law enforcement and revenue agencies.


The federal 1987 Cash Transaction Reports Bill reflected government and community anxieties about "widespread abuse of the facilities provided by financial institutions" and about "the underground cash economy, tax evasion, money laundering and welfare fraud". Those anxieties were evident in calls at that time for a mandatory Australia Card.

Proponents of the Bill claimed that it was easy for individuals to create accounts with banks and other financial institutions using false identities, thereby evading tax and disguising the origins of money gained through illicit activity such as drug trafficking, prostitution or extortion. Acceptance by financial institutions of false identities also enabled people to improperly gain government benefits, in particular unemployment, disability pension and medical benefit scheme payments.

In calling for legislation those proponents noted that there was no federal government registration of bank accounts, that surveillance of money flows (particularly within Australia) was weak, that institutions tended to rely on the good faith of those opening/using accounts and that there was no specific legal prohibition of opening an account in a false name (although misuse of an account might be an offence under a range of federal and state/territory legislation). They also noted that there was some uncertainty about the incidence and seriousness of particular offences.

The expectation was that new legislation would assist law enforcement and inhibit a range of offences by -

  • requiring institutions to report particular types of transactions
  • requiring institutions to more effectively verify the identity of individuals opening accounts.

That expectation recognised Australia's move to a 'cashless economy', particularly one in which few bank customers were personal acquaintances of bank staff. It assumed that existing recordkeeping arrangements would provide a substantial match between the individual opening an account and the individual using that account.

The 1987 Bill, which came into force in 1988, was not developed in isolation. It reflected international discussion about the shape of restrictions on money laundering.

It also reflected debate in Australia about privacy protection - evident in the 1988 Privacy Act - and about personal identification mechanisms such as the Australia Card that would enable government agencies to uniquely tie an individual to an entitlement or transaction.

     the 1988 Act

The reporting regime has been extended and streamlined since 1988. Landmarks include -

  • mandatory reporting of suspect transactions (January 1990)
  • reporting on cash transactions and cash transfers into/out of Australia (July 1990)
  • implementation of account opening procedures (1991)

At the time of royal assent the Cash Transaction Reports Act 1988 established the Cash Transaction Reports Agency, a new federal government agency, and identified an offence of "operating a false name account". It required 'cash dealers' - essentially banks and credit unions - to verify the identity of signatories to accounts that had a cash balance exceeding $1,000 or an aggregate of credits exceeding $2,000 over a thirty day period.

Verification centred on an "identity reference": a signed statement from a referee. The statement certified that the signatory to the account was known by the name used for the account and that the referee had sighted particular identity documents.

That verification process was criticised as cumbersome and in 1990 the Act was amended (through Statutory Rules 340 and 341 of 1990) to allow an alternative method of identity verification, with further streamlining in 1991 and 1992 (under Statutory Rules 166 and 90 respectively).

The alternative method - the 100 Point scheme - involves the financial institution or other entity verifying an individual's identity -

  • by examination of several 'proof of identity' documents (eg a passport and a driver's licence) that are either provided by the individual
  • through reference to an independent database.

Each item is assigned a number of points, with establishment of an account being conditional on the points adding up to at least 100.

Assignment of points reflects the 'authority' of the individual document. A document such as a passport that

  • has been issued by a government agency through a process that involves some testing of claims (eg checking a register of births)
  • features a photograph or biometric identifier
  • is tamper-resistant

has a greater number of points than a document without those attributes (eg a letter from a landlord or a bill from a telephone company). The weighting of points is identified in the final page of this note.

The scheme does not involve the financial institution or other entity assigning the individual with unique number that is independent of the particular account with that institution or that is derived from a central identity register maintained by a government agency. It is a verification mechanism, not the Australian counterpart of the the US Social Security Number.

The scheme does not involve manual/automated reporting of each and every transaction. Instead it involves reporting on transactions - principally cash transactions - over a certain value (currently $10,000), by particular entities (eg organisations that are deemed to engage in/support terrorism) or that appear anomalous.

     development of the FTR and AML/CTF

The Cash Transaction Reports Act became the Financial Transaction Reports Act 1988 (with effect from 6 December 1992) under the provisions of the Cash Transaction Reports Amendment Act 1991. The same amendment renamed the Cash Transaction Reports Agency as the Australian Transaction Reports & Analysis Centre. The FTR has been amended since that time and in 2006 was extended through the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).

The 1991 amendment reflected an emphasis on monitoring financial transactions per se, rather than merely cash flows through a handful of institutions. In its current form the FTR thus encompasses solicitors, gambling, bullion dealing and international funds transfers in addition to deposits/withdrawals from banks and similar institutions.

The FTR mandates reporting to the Director of AUSTRAC regarding four types of financial transactions -

  • Significant Cash Transactions
  • Suspect Transactions
  • International Funds Transfer Instructions
  • International Currency Transfers.

The obligation to provide those reports centres on 'cash dealers', with solicitors for example only being required to report significant cash transactions to which they are a party and members of the public being required to report international currency transfers (eg bringing large amounts of cash into Australia).

The reporting regime complements requirements under the Banking (Foreign Exchange) Regulations and other legislation. The Reserve Bank of Australia for example indicated in 2001 that it was seeking to block accounts that might be held by terrorist organisations, associates and individuals. That reflected claims that groups such as Hezbollah, Hamas, the Chechen Mujahedin and Liberation Tigers of Tamil Eelam have raised funds in Australia or routed money thorough Australia.

Under the FTR cash dealers must report transactions that they suspect may be relevant to an investigation of a breach of Australian law, including those by or for entities proscribed under the Charter of the United Nations (Anti-terrorism Measures) Regulations 2001.

In 2004 and 2005 the federal Minister for Justice released a series of Issues Papers about changes to ensure conformity with the FATF40 anti-money laundering standards. They controversially featured a proposal to replace the 100 points test for financial accounts with a new scheme requiring customers to provide two identification documents. The primary document would be a government-issued photo ID such as a passport or driving licence. The secondary document would be a card with the customer's name, such as a credit/debit card or a government benefit card.

In October 2005 the government announced plans to strengthen anti-money laundering and counter-terrorist financing measures. Initial changes under the Anti-Money Laundering & Counter-Terrorism Financing Act 2006 (AML/CTF Act) cover the financial and gambling sectors and bullion dealers (and lawyers and accountants to the extent that they provide services in direct competition with the financial sector). Subsequent changes will extend obligations to real estate agents, to jewellers and to professionals such as accountants and lawyers when they provide non-financial services.

     outside the FTR

The 100 points requirement for identity verification has been widely adopted for purposes other than tagging money flows.

Those purposes include -

  • driver licencing
  • obtaining a mobile phone
  • gaining a range of benefits from the federal government and state/territory governments
  • obtaining workplace insurance (eg the Victorian WorkCover scheme)
  • registration as a nurse

The NSW Ministry of Transport thus indicates that

to obtain a public passenger vehicle driver authority, operator accreditation or vehicle licence you must prove your identity, date of birth and residential address ...

with that proof involving 100 points.

The federal government indicates that 100 point verification is required to obtain -

  • Age Pension
  • Youth Allowance, Parenting Payment and Carer Payment
  • Austudy Payment and Newstart Allowance
  • Partner Allowance, Bereavement Allowance, Widow Allowance and Wife Pension
  • Farm Help and Retirement Assistance for Farmers
  • Sickness Allowance and Disability Support Pension
  • Exceptional Circumstances Relief Payment
  • an Export Declaration (for all goods intended to be exported from Australia with a value of $2000 or more)
  • National Visits Media Card (NVMC) identifying the holder as
    "a person with a legitimate media interest in the visits of foreign dignitaries"

100 point verification is also required for obtaining a tertiary student ID Card.

As noted in the following page, the checking of different types of documentation and by different agencies varies considerably. As with any verification scheme it is open to subversion. Some organisations have accordingly moved to '200' or more points for particular purposes.

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version of November 2007
© Bruce Arnold
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