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Traceability of money transfers

Traceability of money transfers

SUMMARY OF:

Information to accompany money transfers — Regulation (EU) 2015/847

SUMMARY

WHAT DOES THIS REGULATION DO?

It sets out rules on the information on payers* and payees*, accompanying transfers of funds*, in order to help prevent, detect and investigate money laundering* and terrorist financing*.

EU rules in this area are largely based on international recommendations adopted by the Financial Action Task Force (FATF*).

KEY POINTS

As regards scope, the regulation applies to transfers of funds, in any currency, sent or received by a payment service provider (PSP)* or an intermediary PSP* established in the EU.

The PSP of the payer is required to provide specific information on both payer and payee, for example, the name of the payee and the payee’s payment account number and to check the accuracy of the information provided.

The PSP of the payee and any intermediary PSP are required to have effective procedures in place for detecting whether the information provided on payer or payee is missing or incomplete. In the case of missing or incomplete information, the PSPs must have effective risk-based procedures for deciding whether to execute, reject or suspend a transfer of funds lacking the required information.

Personal data obtained by PSPs should be used only for the purpose of preventing money laundering and terrorist financing, and PSPs should ensure the confidentiality of such data.

Any record of information on payer/payee should not be kept longer than is necessary for the purposes of preventing, detecting and investigating money laundering and terrorist financing. That period should be limited to 5 years, after which all personal data should be deleted unless national law provides otherwise.

EU countries are required to establish effective, proportionate and dissuasive sanctions for breach of this Regulation.

The regulation is part of a package of EU legislative measures aimed at preventing money laundering and terrorist financing, including Directive 2015/849 on preventing the use of the financial system for money laundering or terrorist financing (fourth anti-money laundering directive).

The regulation is part of a broad EU strategy to tackle financial crime that also includes the work of:

an Expert group on Money Laundering and Terrorist Financing which meets regularly to exchange views and assist the Commission in the preparation of legislation or in policy definition,

a Committee on the Prevention of Money Laundering and Terrorist Financing which may provide opinions on implementing measures proposed by the Commission,

WHEN DOES THIS REGULATION APPLY?

From 26 June 2017. It repeals Regulation (EC) No 1781/2006.

BACKGROUND

KEY TERMS

* Payer: a natural or legal person who is the account holder and who allows a transfer of funds to leave that account, or in the absence of an account, the natural or legal person who gives the order to carry out a transfer of funds.

* Payee: a natural or legal person who is the intended final recipient of transferred funds.

* Transfer of funds: any transaction carried out on behalf of a payer through a payment service provider by electronic means with a view to making funds available to a payee at another payment service provider, irrespective of whether the payer and the payee are the same person.

* Money laundering: the conversion of the proceeds of crime into apparently clean funds, usually via the financial system. This may be achieved for instance by disguising the sources of the money, changing its form, or moving the funds to a place where they are less likely to attract attention

* Terrorist financing is the provision or collection of funds intended to be used to carry out terrorist offences

* FAFT: the intergovernmental body responsible for designing and promoting, at both national and international level, strategies to combat money laundering and terrorism financing.

* Payment service provider (PSP): a natural or legal person whose business includes the provision of fund transfer services.

* Intermediary payment service provider: a payment service provider which is neither that of the payer nor that of the payee and which participates in the execution of transfers of funds.

ACT

Regulation (EU) 2015/847 of the European Parliament and of the Council of 20 May 2015 on information accompanying transfers of funds and repealing Regulation (EC) No 1781/2006

REFERENCES

Act

Entry into force

Deadline for transposition in the Member States

Official Journal

Regulation (EU) 2015/847

25.6.2015

OJ L 141, 5.6.2015, pp. 1–18

RELATED ACTS

Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, pp. 73–117)

last update 13.10.2015

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