AML / CFT : Due Diligence Alert - that UK Identity Card is void.

The Identity Card scheme that was a sinking flagship throughout the period of more than a decade of Labour government is dead. It ran into non-stop resistance, over-ran on time and went so far out of budget that even after spending more than original estimates, only a quarter of the new estimated cost had been spent.

The scheme has been scrapped in The Identity Documents Bill which is expected to receive the Royal Assent today.

Cards which have been issued will become invalid in one month, providing a period for those who are using them to travel to make other arrangements.

The scheme was widely regarded as an affront to civil liberties: the UK is one of very few countries not to have a centralised identity card system and was widely seen as an indicator of a police state. While that was probably an over-reaction, the fact that it was tied to the National Identity Register which retained fingerprints and other data was a serious concern.

Home Office Minister Damian Green said "The Identity Card Scheme represented the worst of government. It was intrusive, bullying, ineffective and expensive."

It was certainly that. Scrapping it will involve cost - including that of closing the Office of the Identity Commissioner. But even so, more than GBP85 million will be saved in the next four years. But that's in relation to the trials and a small number of foreigners who were obliged to obtain a card. As the scheme rolled out, compulsorily, to the entire UK population, the future costs saved are estimated at approx GBP835 million.

The Home Office says "The Identity Documents Bill invalidates the identity card, meaning that within one month, holders will no longer be able to use them to prove their identity or as a travel document in Europe."

The National Identity Register, the database which contains the biographic information and biometric fingerprint data of card holders, will be physically destroyed within two months.

It is therefore imperative that financial institutions realise that the cards are no longer valid - and also the risk that fraudsters, especially overseas, will try to make use of copies of cards as a form of identification knowing that very few people will ever have seen one.

The Identity Card is not a passport although it was designed to double as an intra-Europe travel document - even though the UK is not a member of the Schengen scheme.

The Bill makes provision for the cancellation of the UK National Identity Card, the Identification Card for EEA nationals and the destruction of the National Identity Register. The identity card for foreign nationals (biometric residence permit) is not being scrapped.

Many temporary immigrants were required to obtain an identity card and this has been a valuable document in proving their identity for account opening purposes, relieving financial institutions of the burden of proving the legitimacy of foreign-issued documents.

The Bill is at http://services.parliament.uk/bills/2010-11/identitydocuments.html