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Anti-money Laundering Compliance and KYC check for clients

ycjulia
Active Member
Yingchun Z Member Since: Jun 17, 2021
1 of 8

Hi,

 

I am a freelance accountant. The anti-money laundering regulation requires ID check before we take on any client (such as obtain a copy of passport, proof of residency, company registration documents, etc.). How does it work through Upwork? Can I ask clients to send me ID and KYC info and arrange online meetings? 

 

Many thanks in advance for your help. 

prestonhunter
Community Guru
Preston H Member Since: Nov 24, 2014
BEST ANSWER
2 of 8

Upwork is not an accounting site. It is a general freelancing site.

 

So as you can imagine, Upwork does not have specific provisions for such a situation. You may need to carve out a plan. This thread could be where you do that.

 

But to address your specific questions: Upwork has no rules prohibiting a freelancer from asking her client for ID such as passport or for KYC info.

 

Also, Upwork explicitly ALLOWS freelancers to arrange online meetings with their clients, using any tools or means of communication that they want to use. Upwork even provides many tools, such as built-in audio call, video conferencing, and built-in Zoom that freelancers may use to meet with clients AND prospective clients. Before being officially hired, freelancers and prospective clients communicate only using the Upwork platform. But once an Upwork contract is in place, there are zero restrictions on communication and meeting methods.

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ycjulia
Active Member
Yingchun Z Member Since: Jun 17, 2021
3 of 8

Hi Preston,

 

Thank you so much for advising. I'm new to Upwork. Your advice helps me to plan and get started. Smiley Happy

petra_r
Community Guru
Petra R Member Since: Aug 3, 2011
4 of 8

I doubt that many (if any) clients would provide a complete stranger on the Internet with such sensitive documents which would be sent via insecure channels. I have never heard of a freelancer being required to ask their client for such documents.

 

I would suggest that you double check whether you really ARE required to do so, because I would hazard a guess that clients (with very good reason) will not often comply.


Upwork constantly warns freelancers to not send such documents to clients, so whilst it isn't exactly "forbidden" to ask for ID documents, it is probably neither safe nor a good idea

ycjulia
Active Member
Yingchun Z Member Since: Jun 17, 2021
5 of 8

Hi Petra,

 

I agree that nobody should provide a complete stranger with personal information.

 

It is a mandatory requirement in the UK for accountancy and tax professionals to comply with anti-money laundering (AML) regulations and it's a common practice that clients normally would co-operate and provide ID documents as this is for a legitimate reason and the freelancer is verifiable through ICO, AML supervisory and professional bodies.

 

The clients can choose not to provide ID documents for freelance accountants, but whether the accountants accept the work or not is a question whether it is compliant with the AML regulations.

prestonhunter
Community Guru
Preston H Member Since: Nov 24, 2014
6 of 8

I'm not an accountant.

 

But as a database designer and database programmer, I can confirm that clients routinely provide me with access necessary to do my job.


That includes providing me with access to databases that store patient medical information, user financial details, contact information, credit card information, etc.


Such access is not necessary for every freelancer. But it is necessary for specific types of professionals in order to do the work. This can be done in ways that are legal, comply with Upwork ToS, and applicable regulations such as HIPAA, PCI DSS, etc.

petra_r
Community Guru
Petra R Member Since: Aug 3, 2011
7 of 8

There is a huge difference between "providing access" and sending complete strangers on the Internet ID documents via insecure channels.

 

Hello? Identity theft? 

ycjulia
Active Member
Yingchun Z Member Since: Jun 17, 2021
8 of 8

Yes, it needs to be done prfessionally and securely. I watched a GDPR training webinar presented by an ICO officer. It is secure to use cloud based software with 2-way verification for document sharing, but of course, it needs to be for legitimate reasons. 

 

We all need to be cautious for those who claim to be somebody and ask you to provide ID documents. Firstly, we need to ask why? Is this required by law or for carrying out the work? Secondly, some business sectors are regulated by professional bodies, therefore, the person is verifiable by searching the names and membership numbers on the websites of the professional bodies. 

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