Information accompanying transfers of funds

PURPOSE: to improve traceability of payments and to prevent and detect money laundering and terrorist financing when transferring funds.

LEGISLATIVE ACT: Regulation (EU) 2015/847 of the European Parliament and of the Council on information accompanying transfers of funds and repealing Regulation (EC) No 1781/2006.

CONTENT: this Regulation, adopted at the same time as Directive (EU) 2015/849, updates and improves the EU’s existing 3rd Anti-Money Laundering Directive (Regulation (EC) No 1781/2006) in ways which improve traceability of payments and ensure that the EU framework remains fully compliant with international standards (FATF recommendations).

This Regulation lays down rules on the information on payers and payees, accompanying transfers of funds, for the purposes of preventing, detecting and investigating money laundering and terrorist financing.

Scope: this Regulation shall apply to transfers of funds, in any currency, which are sent or received by a payment service provider or an intermediary payment service provider established in the Union. It shall not apply to transfers of funds carried out using a payment card, an electronic money instrument or a mobile phone, or any other digital or IT prepaid or postpaid device with similar characteristics, where certain conditions are met. A Member State may decide not to apply this Regulation to transfers of funds within its territory to a payee's payment account permitting payment exclusively for the provision of goods or services where the amount of the transfer of funds does not exceed EUR 1 000.

Information accompanying transfers of funds: although existing legislation already requires financial service providers to ensure that transfers of funds are accompanied by information on the payer, the new rules require that information should include details as regards the payee (such as the name of the payee and he payee's payment account number).

Transfers of funds to outside the Union: these transfers should carry complete information on the payer and the payee. Those authorities should be granted access to complete information on the payer and the payee only for the purposes of preventing, detecting and investigating money laundering and terrorist financing.

Obligations on the payment service provider of the payee: in order to check whether the required information on the payer and the payee accompanies transfers of funds, and to help identify suspicious transactions, the payment service provider of the payee and the intermediary payment service provider should have effective procedures in place in order to detect whether information on the payer and the payee is missing or incomplete. Those procedures should include ex-post monitoring or real-time monitoring where appropriate.

The Regulation stipulates that the obligation to check whether information on the payer or the payee is accurate should, in the case of transfers of funds where verification has not yet taken place, be imposed only in respect of individual transfers of funds that exceed EUR 1 000, unless the transfer appears to be linked to other transfers of funds which together would exceed EUR 1 000, the funds have been received or paid out in cash or in anonymous electronic money, or where there are reasonable grounds for suspecting money laundering or terrorist financing.

With the aim of assisting payment service providers to put effective procedures in place to detect cases in which they receive transfers of funds with missing or incomplete payer or payee information and to take follow-up actions, the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority) (EIOPA), and the European Securities and Markets Authority (ESMA), should issue guidelines.

Retention of information and data protection: personal data shall be processed by payment service providers only for the purposes of the prevention of money laundering and terrorist financing. In order to facilitate criminal proceedings, the Regulation requires payment service providers to keep records of information on the payer and the payee for a period of time for the purposes of preventing, detecting and investigating money laundering and terrorist financing. That period should be limited to five years, after which all personal data should be deleted unless national law provides otherwise.

Sanctions: the sanctions and measures provided for shall be effective, proportionate and dissuasive and shall be consistent with those laid down in Directive (EU) 2015/849.

ENTRY INTO FORCE: 25.6.2015. The Regulation shall apply from 26.6.2017.