IVCOP Review: Key Proposed Changes and What They Mean for Reporting Entities

The AML Supervisors are currently seeking submissions on proposed updates to the Identity Verification Code of Practice (IVCOP). This review forms part of the broader programme of AML reform aimed at strengthening the response to organised crime while simultaneously reducing unnecessary compliance burden.

The overarching objective of the proposed changes is to modernise and future-proof the IVCOP, ensuring reporting entities have clear, practical, and contemporary guidance for verifying customer identity. The Supervisors also highlight ongoing issues such as parents facing difficulties when opening accounts for their children, and individuals without standard identity documents struggling to access essential financial services.

Below is a summary of the key proposals and my preliminary views on their likely impact:

NZ Driver’s Licences as Standalone Identification

Despite strong stakeholder support, the proposal confirms that a New Zealand driver’s licence alone will continue to not be considered sufficient as a standalone form of identification.

Beneficial Ownership

The Proposal introduces several options that would allow reporting entities to apply a risk-based approach when verifying the identity of low-risk beneficial owners. For example, uncertified scanned copies of documents could be accepted. However, taking this approach would mean the reporting entity no longer receives the ‘safe harbour’ protection offered under the IVCOP.

I have mixed views on this amendment: while it would ease compliance requirements, it also introduces a degree of uncertainty for entities that rely heavily on the ‘safe harbour’ defence.

Certified Copies

Certified copies of identity documents would only be acceptable where the individual is genuinely unable to meet face-to-face. Entities would also be required to document the reasons why face-to-face verification was not conducted. This amendment is unlikely to reduce compliance burden or improve accessibility for customers.

‘Wet-Ink’ Certified Copies

The proposal requires the original ‘wet-ink’ certified copy of an identity document. This represents an increase in compliance burden, particularly given that current Department of Internal Affairs (DIA) guidance states that wet-ink copies are only needed based on a risk-based decision.

Trusted Referees

Trusted referees will no longer need to state that the documents “represent the identity of the named individual” where the identity can be verified by other reliable means.
Although the proposal does not detail what those alternative means might be, this change has the potential to streamline some processes if implemented carefully.

 Electronic Verification

Government-maintained sources, such as the DIA Confirmation Service and the New Zealand Transport Agency Driver Licence Verification Service, would be recognised as reliable primary data sources. Where these sources offer sufficient assurance, the need for a second corroborating source would be removed.

Incorporating New Technologies

The proposal includes guidance on how new technologies can be used for identity verification, including services provided under the Digital Services Trust Framework. These tools are not currently recognised within the existing IVCOP, so this update is both timely and constructive.

Next Steps

The AML Supervisors will accept feedback until 19 January 2026, with a draft of the updated IVCOP expected to be released in April 2026.

If you require assistance preparing a submission or would like to discuss how these proposed changes may affect your AML processes, please feel free to get in touch.