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23 Mar 2012

New "KYC" requirements on witnessing statutory declarations and affidavits

by Orla McCoy

It might be most notorious for the conferral of powers on police officers to require persons to remove face coverings for the purposes of being identified, but the Identification Legislation Amendment Act (NSW) 2011 does a couple of other things - making it legislation which both civil and criminal law practitioners need to be aware of.

Firstly, it introduces (by way of amendment of the Law Enforcement (Powers and Responsibilities) Act (NSW) 2002 No 103), a statutory definition of a human "face". The amendment defines person's face as "from the top of the forehead to the bottom of the chin, and between (but not including) the ears" (section 3(1)). It also defines "face covering" as "an item of clothing, helmet, mask or any other thing that is worn by a person and prevents the person’s face from being seen (whether wholly or partly)."

Further, and almost by way of afterthought, tucked away in Schedule 2 of the Act, are new sections 34 and 35 to be inserted into the Oaths Act (NSW) 1900 (the Act) which, together with the Oaths Regulation (NSW) 2011 have a commencement date of 30 April 2012.

The new provisions define prescribed steps that an Authorised Witness must take to:

1. Identify a person making a statutory declaration or affidavit and

2. Certify that those steps have been taken.

What will change?

Authorised Witnesses will need to sight appropriate identification documents and the face (as defined) of a person making a statutory declaration or affidavit, unless they are exempt. This must also be certified on the face of the document.

Section 34(5) of the Act also provides that face and face covering have the same meanings in section 34 as they have in the Law Enforcement (Powers and Responsibilities) Act (NSW) 2002.

What is an appropriate identification document (in original or certified form)?

An identification document may be any of the following:

a. A primary photographic identification document;

b. a primary non-photographic identification document;

c. Medicare card, Pension Concession card, Department of Veterans Affairs card or

d. Any other entitlement card issued by the Commonwealth or a State Government;

e. A credit card or account from a bank, building society or credit union (or alternatively a passbook or statement of account);

f. An electoral enrolment card or other evidence of enrolment as an elector;

g. A student identity card (or alternatively a certificate or statement of enrolment) from an educational institution.

It should be noted that a cancelled document or a document with an expiry date which has passed cannot be used. The following exceptions apply:

  • An Australian passport which has been expired for less than 2 years may be used;
  • An account or statement of account from a bank, building society or credit union must be less than 1 year old; and
  • An electoral enrolment card or student identity card (including a certificate or statement of enrolment) must be less than 2 years old.

Is there any occasion where the Authorised Witness is not required to see the face of a person making a statutory declaration or statement?

An Authorised Witness is exempt from the requirement under section 34(1)(a) of the Act to see the face of a person if:

1. The person is wearing a face covering and

2. The Authorised Witness is satisfied that the person has a special justification for not removing the face covering; or

3. The Authorised Witness has known the person for at least 12 months.

A special justification includes having a legitimate medical reason for not removing the face covering.

For how long must an Authorised Witness know a person, for the purpose of the Act, to not need to sight identification documentation?

A person is not known to an Authorised Witness for the purposes of section 34(1)(b) of the Act unless the Authorised Witness has known the person for at least 12 months.

If an Authorised Witness has known a person for this minimum period of time, they do not need to sight identification documentation and can adjust their declaration accordingly (see below).

They must still sight the person's face, unless they are exempt from this requirement.

What certification should be made on the relevant document?

Schedule 1 Form for Certificate under section 34(1)(c) of the Act suggests the following text be inserted and adjusted accordingly on the face of the document:

*Please cross out any text that does not apply

I [insert name of authorised witness], a [insert qualification to be authorised witness], certify the following matters concerning the making of this [statutory declaration/affidavit] by the person who made it:

1[I saw the face of the person] or [I did not see the face of the person because the person was wearing a face covering, but I am satisfied that the person had a special justification for not removing the covering].

2[I have known the person for at least 12 months] or [I have not known the person for at least 12 months, but I have confirmed the person’s identity using an identification document and the document I relied on was:

[describe identification document relied on].

[insert signature of authorised witness]

Date:

Who is an Authorised Witness?

The categories of person who are an Authorised Witness appear in sections 21, 26 and 27 of the Act. These include:

  • Justice of the Peace
  • Notary Public
  • Commissioner of the court for taking affidavits
  • Legal practitioner authorised under section 27(1) of the Act.

Further, in the instance where a person is making a declaration outside of NSW, section 26 of the Act authorises the following witnesses:

  • In any country or place outside of NSW before a Notary Public or any person having authority to administer an oath in that country or place; or
  • In any country or place outside of NSW before a British Consular Officer or an Australian Consular Officer exercising their function in that country or place.

What does this mean for practitioners?

In a world where crime, fraud and money laundering are ever more sophisticated, increasingly onerous "know your customer" requirements are becoming commonplace in the financial sector.

As a practical matter, the additional KYC requirements are likely to have the most significant impact on practitioners who offer drop-in witnessing and legalisation services to members of the public (other than existing clients). However, we can also expect to see some changes in the way practitioners will need to operate with existing clients.

Witnessing an affidavit is relatively straightforward, albeit formal, task. Commonly, with costs in mind, private practices will delegate this type of work to a more junior practitioner. For that practice to continue, and so that the Authorised Witness can make a proper certification:

(a) practitioners will need to alert deponents to the new KYC requirements; and

(b) deponents will need to ensure that they are in possession, at the time of swearing or affirming, of appropriate identification documentation (and a clearly visible face, unless exempted).

Alternatively, practitioners who know the deponent for longer than 12 months can, where possible, act as the Authorised Witness.

Care should also be taken to update templates and precedent affidavits so that the draft forms of certification are incorporated.


This article was published in the Law Society Journal Vol 50 No. 2 March 2012, and in LexisNexis In-house Counsel Bulletin Vol 15 No. 4 March 2012

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.