Traceability of money transfers

SUMMARY OF:

Regulation (EU) 2015/847 on information accompanying transfers of funds

WHAT IS THE AIM OF THE REGULATION?

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*.
European Union (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 the 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 the payer or 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 Member States 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 (EU) 2015/849 on preventing the use of the financial system for money laundering or terrorist financing (the fourth anti-money laundering directive) — see summary.
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 preparing 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;
- an informal network of financial intelligence units (the EU FIUs platform);
- the Joint Committee of European Supervisory Authorities.

Amendment

Regulation (EU) 2019/2175 updates Regulation (EU) 2015/847 with regard to data protection aspects to take into account the adoption of Regulation (EU) 2016/679 (the general data protection regulation — see summary).
It also requires the European Banking Authority, as of 1 January 2020, to take over from the European supervisory authorities the task of issuing any guidelines addressed to the competent authorities and the payment service providers on measures to be taken in accordance with Regulation (EU) 2015/847.

Repeal

Regulation (EU) 2015/847 repeals Regulation (EC) No 1781/2006.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 26 June 2017.

BACKGROUND

For further information, see:

Anti-money laundering and countering the financing of terrorism (European Commission).

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.

Terrorist financing. The provision or collection of funds intended to be used to carry out terrorist offences.

Financial Action Task Force (FATF). The intergovernmental body responsible for designing and promoting, at both the national and the 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.

MAIN DOCUMENT

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 (OJ L 141, 5.6.2015, pp. 1–18).

Successive amendments to Regulation (EU) 2015/847 have been incorporated in the original text. This consolidated version is of documentary value only.