A Key to any successful venture when expanding a business to different territories is understanding both international and local laws. In this blog post, we are going to explore the CPF check - a unique ID system used by the Brazilian government to track individuals' financial activities. We will also look at how this system can be used regarding identity verification and complying with international and local laws.
What is the CPF Number?
Cadastro de Pessoas Físicas or the CPF number is a unique identification number that is assigned to each resident of Brazil. Similar to the US Social Security Number, it is used to trace an individual’s financial activities such as banking or credit history, taxes, and pension contributions. The CPF number is required for a variety of activities, such as opening a bank account, filing taxes, purchasing a property and getting utility services, and purchasing online. This is why it becomes necessary when it comes to KYC & AML checks of Brazilian residents.
The CPF number consists of 11 digits, with the first nine digits representing the individual's date of birth, gender, and the state in which they are registered. The last two digits are used as a control number. Someone can confuse the CPF number with CNPJ. While both numbers are issued by Federal Revenue Bureau, CNPJ is an identification number for the companies that operate in Brazil.
Law No. 14.534/23, makes the CPF the only common identification number in the country. This law will come into effect in 2024, but by then everyone must have a CPF: the document will be mandatory for services in Brazil and abroad, including requesting certificates and renewing passports. A CPF number is issued only once (unique and final) and cannot be registered twice. It should be kept in a safe place or memorized as "CPF cards" are no longer issued.
What about the "RG"?
In Brazil, a CPF is treated as a second form of identification. The official identity card for citizens is called the RG, or "Registro Geral". This is because a single ID is needed, even though the RG only applies to the state you are from. It's possible that two people could have the same RG number from two different states. Moreover, one person could have up to 26 RGs, according to a Folha de São Paulo report.
Experts point out that this lack of a nationwide system makes the RG number vulnerable to identity theft. To address this, the Federal government introduced a new card called the "Carteira Nacional de Identidade" in February 2022. This way RG numbers are planned to be outplaced by 2032.
What is the Purpose of a CPF Check?
A CPF check is an essential part of the KYC process, which is designed to verify the identity of an individual and comply with all the regulations and local laws. Within this one number, we can verify the age of the holder, nationality, tax status, and registration region. All this information is crucial for businesses to comply with regulatory requirements, such as anti-money laundering (AML) and counter-terrorism financing (CTF) laws. Additionally, it helps businesses to reduce financial and reputational risks by ensuring that they are doing business with legitimate customers, preventing identity theft and money laundering.
How to Use the CPF Check to Make Smart Business Decisions
Organizations operating in the Brazilian market are legally required to collect and verify customers’ CPF numbers to comply with AML and CTF laws. Therefore, using KYC is going to be a smart business decision.
Secondly, KYC services save any business time and money. Automated checks can be performed in a matter of seconds and provided in the most secure ways. Plus, a good KYC provider takes off businessmen's shoulders many problems of storing the data, a resources-consuming manual verification by human managers of every document, customers’ and legal support.
In addition to verifying a customer's identity, a CPF check can also provide businesses with valuable insights into their customers' financial activities. This information can be used to make informed decisions about the customer's creditworthiness, as well as to evaluate their financial stability.
KYCAID is the answer to your business needs
The CPF check is an essential part of doing business in Brazil. By verifying a customer's CPF number, businesses can ensure that they comply with local laws and regulations, mitigate the risk of fraud and money laundering, and make informed decisions about their customers.
KYCAID is a one-stop-shop compliance platform that offers a range of advanced solutions to businesses that require reliable KYC & AML services. As part of its comprehensive suite of offerings, KYCAID performs CPF (Cadastro de Pessoas Físicas) checks, which are essential for businesses operating in Brazil. By leveraging KYCAID's CPF check service, organizations can streamline their customer onboarding process, improve their compliance posture, and reduce their exposure to financial and reputational risks. KYCAID's new CPF check service is accurate, fast, and secure, and it offers an unmatched level of convenience to businesses that need to validate their customers' identities in Brazil.
CPF check by KYCAID
Utilize KYCAID's CPF check service to enhance the customer onboarding process, regulatory compliance, and decrease its potential for financial and credit risks.