Navigating The Complexity of Ownership From The Lens of Sanction By Extension

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Lapses in UBO Identification, Sanctions Compliance, and Corporate data

Tuesday, 30th April. 13:00 - 14:00 London Time (GMT+1)


Mark Bain


Louie Vargas


Michael Harris


Current State of Business Verification in Australia

19 April, 2024

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The Australian business ecosystem faced a tremendous rise in new businesses of over 406 thousand, which caused the fiscal year 2023 to end with 2.5 million new companies operating in Australia.  The importance of robust verification processes cannot be overstated in the vibrant landscape of Australian business. Ensuring a high level of accuracy of business verification is the cornerstone of the stable business ecosystem, from ensuring regulatory compliance to maintaining trust among stakeholders. However, the impediments of business verification pose more significant challenges when navigating through multiple data sources of business information and maintaining compliance with the regulatory framework. This article explores the evolving data landscape of available registries, highlighting the efficacy and limitations of existing business verification systems in Australia. 

Business Verification Challenges in Australia:

Business verification in Australia faces substantial challenges for multiple reasons, such as obstacles to corporate compliance. A few of the major challenges are stated below;

  • No information about Beneficial information:

Knowing the details of business owners is imperative in the business verification process to trace any risky thread in the intricate ownership structure. The official business registries do not provide information about the ultimate beneficial ownership. This can create a significant loophole during corporate due diligence. Lack of information about it poses businesses at risk of non-compliance with regulatory obligations, exposing themselves to legal repercussions and reputational damage. Therefore, enhancing mechanisms to capture and disclose beneficial ownership information is essential to bolster transparency, accountability, and the overall integrity of the business ecosystem.

  • Paid Access to Business Documents:

The official business registry of Australia does not provide free access to official business verification records. The documents of filing details like title, description, and File  URL are available but paid. Filing details are vital to business verification, as they help counter-check data accuracy and ensure regulatory compliance. In cases where timely access is required, delays in accessing such documents might impede better opportunities in the business ecosystem. 

  • Resolving the conundrum of ABN and ACN:

Australian Business Numbers and Australian Company Numbers are crucial in business verification in Australia. Both these numbers are of greater importance while performing company checks in Australia, which signifies that the entity is legally compliant. ACN is for companies that are legally different from the owner; only companies can have an Australian Company Number, whereas businesses that follow any other business structure are eligible to get Australian Business Numbers, 

Primary Regulatory Bodies for Compliance:

  • Australian Transaction Reports and Analysis Centre (AUSTRAC):

AUSTRAC sets regulations for financial institutions and businesses to evade the risks of Money laundering and terror financing. Non-compliance with regulations can result in possible sanctions, fines, and legal action by AUSTRAC. It also employs sophisticated data intelligence to trace patterns of illicit activities or potential risks of terror financing

  • Australian Securities and Investments Commission (ASIC):

ASIC is the national corporate regulator that protects Australian consumers, investors, and creditors. It ensures complete compliance with regulations that govern company transparency to maintain investor trust in the marketplace. ASIC contributes to the credibility and trustworthiness of the Australian financial system and business environment by performing market surveillance and maintaining high standards of market integrity.

Data Score of Business Information for Australia: 

The figure below shows the Data Score of information available and unavailable on the official registry for KYB verification in Australia.

Data Score of Business Information for Australia

Key Beneficial Ownership Information:

The figure below shows the Data Score of information available and unavailable on Australia’s official UBO verification registry.

Beneficial Ownership Information Australia

How can The KYB help?

The KYB removes the hassle of accessing multiple registries for business verification by providing data from 20+ official business registries in Australia. This includes big data sources like ASIC, the Australian Chamber of Commerce and Industry, the Department of Foreign Affairs and Trade, and data from many more official data sources. The official registry of Australia does not provide any information for beneficial ownership, which can raise a serious risk during business onboarding. UBO verification is the backbone of knowing your business process and can secure corporate compliance. The KYB provides complete information about UBO that helps navigate complex ownership structures and comply with AML regulations in corporate due diligence.

Contact us for secure business verification services in Australia.

Read More: Current State of Business Verification in Canada

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