Legal provisions of COM(2005)343 - Information on the payer accompanying transfers of funds

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dossier COM(2005)343 - Information on the payer accompanying transfers of funds.
document COM(2005)343 EN
date November 15, 2006

Contents

CHAPTER I - SUBJECT MATTER, DEFINITIONS AND SCOPE


Article 1

Subject matter

This Regulation lays down rules on information on the payer to accompany transfers of funds for the purposes of the prevention, investigation and detection of money laundering and terrorist financing.

Article 2

Definitions

For the purposes of this Regulation, the following definitions shall apply:

(1)‘terrorist financing’ means the provision or collection of funds within the meaning of Article 1(4) of Directive 2005/60/EC;

(2)‘money laundering’ means any conduct which, when committed intentionally, is regarded as money laundering for the purposes of Article 1(2) or (3) of Directive 2005/60/EC;

(3)‘payer’ means either a natural or legal person who holds an account and allows a transfer of funds from that account, or, where there is no account, a natural or legal person who places an order for a transfer of funds;

(4)‘payee’ means a natural or legal person who is the intended final recipient of transferred funds;

(5)‘payment service provider’ means a natural or legal person whose business includes the provision of transfer of funds services;

(6)‘intermediary payment service provider’ means a payment service provider, neither of the payer nor of the payee, that participates in the execution of transfers of funds;

(7)‘transfer of funds’ means 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 a payment service provider, irrespective of whether the payer and the payee are the same person;

(8)‘batch file transfer’ means several individual transfers of funds which are bundled together for transmission;

(9)‘unique identifier’ means a combination of letters, numbers or symbols, determined by the payment service provider, in accordance with the protocols of the payment and settlement system or messaging system used to effect the transfer of funds.

Article 3

Scope

1. This Regulation shall apply to transfers of funds, in any currency, which are sent or received by a payment service provider established in the Community.

2. This Regulation shall not apply to transfers of funds carried out using a credit or debit card, provided that:

(a)the payee has an agreement with the payment service provider permitting payment for the provision of goods and services;

and

(b)a unique identifier, allowing the transaction to be traced back to the payer, accompanies such transfer of funds.

3. Where a Member State chooses to apply the derogation set out in Article 11(5)(d) of Directive 2005/60/EC, this Regulation shall not apply to transfers of funds using electronic money covered by that derogation, except where the amount transferred exceeds EUR 1 000.

4. Without prejudice to paragraph 3, this Regulation shall not apply to transfers of funds carried out by means of a mobile telephone or any other digital or Information Technology (IT) device, when such transfers are pre-paid and do not exceed EUR 150.

5. This Regulation shall not apply to transfers of funds carried out by means of a mobile telephone or any other digital or IT device, when such transfers are post-paid and meet all of the following conditions:

(a)the payee has an agreement with the payment service provider permitting payment for the provision of goods and services;

(b)a unique identifier, allowing the transaction to be traced back to the payer, accompanies the transfer of funds;

and

(c)the payment service provider is subject to the obligations set out in Directive 2005/60/EC.

6. Member States may decide not to apply this Regulation to transfers of funds within that Member State to a payee account permitting payment for the provision of goods or services if:

(a)the payment service provider of the payee is subject to the obligations set out in Directive 2005/60/EC;

(b)the payment service provider of the payee is able by means of a unique reference number to trace back, through the payee, the transfer of funds from the natural or legal person who has an agreement with the payee for the provision of goods and services;

and

(c)the amount transacted is EUR 1 000 or less.

Member States making use of this derogation shall inform the Commission thereof.

7. This Regulation shall not apply to transfers of funds:

(a)where the payer withdraws cash from his or her own account;

(b)where there is a debit transfer authorisation between two parties permitting payments between them through accounts, provided that a unique identifier accompanies the transfer of funds, enabling the natural or legal person to be traced back;

(c)where truncated cheques are used;

(d)to public authorities for taxes, fines or other levies within a Member State;

(e)where both the payer and the payee are payment service providers acting on their own behalf.

CHAPTER II - OBLIGATIONS ON THE PAYMENT SERVICE PROVIDER OF THE PAYER


Article 4

Complete information on the payer

1. Complete information on the payer shall consist of his name, address and account number.

2. The address may be substituted with the date and place of birth of the payer, his customer identification number or national identity number.

3. Where the payer does not have an account number, the payment service provider of the payer shall substitute it by a unique identifier which allows the transaction to be traced back to the payer.

Article 5

Information accompanying transfers of funds and record keeping

1. Payment service providers shall ensure that transfers of funds are accompanied by complete information on the payer.

2. The payment service provider of the payer shall, before transferring the funds, verify the complete information on the payer on the basis of documents, data or information obtained from a reliable and independent source.

3. In the case of transfers of funds from an account, verification may be deemed to have taken place if:

(a)a payer's identity has been verified in connection with the opening of the account and the information obtained by this verification has been stored in accordance with the obligations set out in Articles 8(2) and 30(a) of Directive 2005/60/EC;

or

(b)the payer falls within the scope of Article 9(6) of Directive 2005/60/EC.

4. However, without prejudice to Article 7(c) of Directive 2005/60/EC, in the case of transfers of funds not made from an account, the payment service provider of the payer shall verify the information on the payer only where the amount exceeds EUR 1 000, unless the transaction is carried out in several operations that appear to be linked and together exceed EUR 1 000.

5. The payment service provider of the payer shall for five years keep records of complete information on the payer which accompanies transfers of funds.

Article 6

Transfers of funds within the Community

1. By way of derogation from Article 5(1), where both the payment service provider of the payer and the payment service provider of the payee are situated in the Community, transfers of funds shall be required to be accompanied only by the account number of the payer or a unique identifier allowing the transaction to be traced back to the payer.

2. However, if so requested by the payment service provider of the payee, the payment service provider of the payer shall make available to the payment service provider of the payee complete information on the payer, within three working days of receiving that request.

Article 7

Transfers of funds from the Community to outside the Community

1. Transfers of funds where the payment service provider of the payee is situated outside the Community shall be accompanied by complete information on the payer.

2. In the case of batch file transfers from a single payer where the payment service providers of the payees are situated outside the Community, paragraph 1 shall not apply to the individual transfers bundled together therein, provided that the batch file contains that information and that the individual transfers carry the account number of the payer or a unique identifier.

CHAPTER III - OBLIGATIONS ON THE PAYMENT SERVICE PROVIDER OF THE PAYEE


Article 8

Detection of missing information on the payer

The payment service provider of the payee shall detect whether, in the messaging or payment and settlement system used to effect a transfer of funds, the fields relating to the information on the payer have been completed using the characters or inputs admissible within the conventions of that messaging or payment and settlement system. Such provider shall have effective procedures in place in order to detect whether the following information on the payer is missing:

(a)for transfers of funds where the payment service provider of the payer is situated in the Community, the information required under Article 6;

(b)for transfers of funds where the payment service provider of the payer is situated outside the Community, complete information on the payer as referred to in Article 4, or where applicable, the information required under Article 13;

and

(c)for batch file transfers where the payment service provider of the payer is situated outside the Community, complete information on the payer as referred to in Article 4 in the batch file transfer only, but not in the individual transfers bundled therein.

Article 9

Transfers of funds with missing or incomplete information on the payer

1. If the payment service provider of the payee becomes aware, when receiving transfers of funds, that information on the payer required under this Regulation is missing or incomplete, it shall either reject the transfer or ask for complete information on the payer. In any event, the payment service provider of the payee shall comply with any applicable law or administrative provisions relating to money laundering and terrorist financing, in particular, Regulations (EC) No 2580/2001 and (EC) No 881/2002, Directive 2005/60/EC and any national implementing measures.

2. Where a payment service provider regularly fails to supply the required information on the payer, the payment service provider of the payee shall take steps, which may initially include the issuing of warnings and setting of deadlines, before either rejecting any future transfers of funds from that payment service provider or deciding whether or not to restrict or terminate its business relationship with that payment service provider.

The payment service provider of the payee shall report that fact to the authorities responsible for combating money laundering or terrorist financing.

Article 10

Risk-based assessment

The payment service provider of the payee shall consider missing or incomplete information on the payer as a factor in assessing whether the transfer of funds, or any related transaction, is suspicious, and whether it must be reported, in accordance with the obligations set out in Chapter III of Directive 2005/60/EC, to the authorities responsible for combating money laundering or terrorist financing.

Article 11

Record keeping

The payment service provider of the payee shall for five years keep records of any information received on the payer.

CHAPTER IV - OBLIGATIONS ON INTERMEDIARY PAYMENT SERVICE PROVIDERS


Article 12

Keeping information on the payer with the transfer

Intermediary payment service providers shall ensure that all information received on the payer that accompanies a transfer of funds is kept with the transfer.

Article 13

Technical limitations

1. This Article shall apply where the payment service provider of the payer is situated outside the Community and the intermediary payment service provider is situated within the Community.

2. Unless the intermediary payment service provider becomes aware, when receiving a transfer of funds, that information on the payer required under this Regulation is missing or incomplete, it may use a payment system with technical limitations which prevents information on the payer from accompanying the transfer of funds to send transfers of funds to the payment service provider of the payee.

3. Where the intermediary payment service provider becomes aware, when receiving a transfer of funds, that information on the payer required under this Regulation is missing or incomplete, it shall only use a payment system with technical limitations if it is able to inform the payment service provider of the payee thereof, either within a messaging or payment system that provides for communication of this fact or through another procedure, provided that the manner of communication is accepted by, or agreed between, both payment service providers.

4. Where the intermediary payment service provider uses a payment system with technical limitations, the intermediary payment service provider shall, upon request from the payment service provider of the payee, make available to that payment service provider all the information on the payer which it has received, irrespective of whether it is complete or not, within three working days of receiving that request.

5. In the cases referred to in paragraphs 2 and 3, the intermediary payment service provider shall for five years keep records of all information received.

CHAPTER V - GENERAL OBLIGATIONS AND IMPLEMENTING POWERS


Article 14

Cooperation obligations

Payment service providers shall respond fully and without delay, in accordance with the procedural requirements established in the national law of the Member State in which they are situated, to enquiries from the authorities responsible for combating money laundering or terrorist financing of that Member State concerning the information on the payer accompanying transfers of funds and corresponding records.

Without prejudice to national criminal law and the protection of fundamental rights, those authorities may use that information only for the purposes of preventing, investigating or detecting money laundering or terrorist financing.

Article 15

Penalties and monitoring

1. Member States shall lay down the rules on penalties applicable to infringements of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. Such penalties shall be effective, proportionate and dissuasive. They shall apply from 15 December 2007.

2. Member States shall notify the Commission of the rules referred to in paragraph 1 and the authorities responsible for their application by 14 December 2007at the latest, and shall notify it without delay of any subsequent amendment affecting them.

3. Member States shall require competent authorities to effectively monitor, and take necessary measures with a view to ensuring, compliance with the requirements of this Regulation.

Article 16

Committee procedure

1. The Commission shall be assisted by the Committee on the Prevention of Money Laundering and Terrorist Financing established by Directive 2005/60/EC, hereinafter referred to as ‘the Committee’.

2. Where reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof and provided that the implementing measures adopted in accordance with this procedure do not modify the essential provisions of this Regulation.

The period laid down in Article 5(6) of Decision 1999/468/EC shall be set at three months.

CHAPTER VI - DEROGATIONS


Article 17

Agreements with territories or countries which do not form part of the territory of the Community

1. The Commission may authorise any Member State to conclude agreements, under national arrangements, with a country or territory which does not form part of the territory of the Community as determined in accordance with Article 299 of the Treaty, which contain derogations from this Regulation, in order to allow for transfers of funds between that country or territory and the Member State concerned to be treated as transfers of funds within that Member State.

Such agreements may be authorised only if:

(a)the country or territory concerned shares a monetary union with the Member State concerned, forms part of the currency area of that Member State or has signed a Monetary Convention with the European Community represented by a Member State;

(b)payment service providers in the country or territory concerned participate directly or indirectly in payment and settlement systems in that Member State;

and

(c)the country or territory concerned requires payment service providers under its jurisdiction to apply the same rules as those established under this Regulation.

2. Any Member State wishing to conclude an agreement as referred to in paragraph 1 shall send an application to the Commission and provide it with all the necessary information.

Upon receipt by the Commission of an application from a Member State, transfers of funds between that Member State and the country or territory concerned shall be provisionally treated as transfers of funds within that Member State, until a decision is reached in accordance with the procedure set out in this Article.

If the Commission considers that it does not have all the necessary information, it shall contact the Member State concerned within two months of receipt of the application and specify the additional information required.

Once the Commission has all the information it considers necessary for appraisal of the request, it shall within one month notify the requesting Member State accordingly and shall transmit the request to the other Member States.

3. Within three months of the notification referred to in the fourth subparagraph of paragraph 2, the Commission shall decide, in accordance with the procedure referred to in Article 16(2), whether to authorise the Member State concerned to conclude the agreement referred to in paragraph 1 of this Article.

In any event, a decision as referred to in the first subparagraph shall be adopted within eighteen months of receipt of the application by the Commission.

Article 18

Transfers of funds to non-profit organisations within a Member State

1. Member States may exempt payment service providers situated in their territory from the obligations set out in Article 5, as regards transfers of funds to organisations carrying out activities for non-profit charitable, religious, cultural, educational, social, scientific or fraternal purposes, provided that those organisations are subject to reporting and external audit requirements or supervision by a public authority or self-regulatory body recognised under national law and that those transfers of funds are limited to a maximum amount of EUR 150 per transfer and take place exclusively within the territory of that Member State.

2. Member States making use of this Article shall communicate to the Commission the measures that they have adopted for applying the option provided for in paragraph 1, including a list of organisations covered by the exemption, the names of the natural persons who ultimately control those organisations and an explanation of how the list will be updated. That information shall also be made available to the authorities responsible for combating money laundering and terrorist financing.

3. An up-to-date list of organisations covered by the exemption shall be communicated by the Member State concerned to the payment service providers operating in that Member State.

Article 19

Review clause

1. By 28 December 2011 the Commission shall present a report to the European Parliament and to the Council giving a full economic and legal assessment of the application of this Regulation, accompanied, if appropriate, by a proposal for its modification or repeal.

2. That report shall in particular review:

(a)the application of Article 3 with regard to further experience of the possible misuse of electronic money, as defined in Article 1(3) of Directive 2000/46/EC, and other newly-developed means of payment, for the purposes of money laundering and terrorist financing. Should there be a risk of such misuse, the Commission shall submit a proposal to amend this Regulation;

(b)the application of Article 13 with regard to the technical limitations which may prevent complete information on the payer from being transmitted to the payment service provider of the payee. Should it be possible to overcome such technical limitations in the light of new developments in the payments area, and taking into account related costs for payment service providers, the Commission shall submit a proposal to amend this Regulation.

CHAPTER VII - FINAL PROVISIONS


Article 20

Entry into force

This Regulation shall enter into force on the 20th day following the day of its publication in the Official Journal of the European Union, but in any event not before 1 January 2007.

This Regulation shall be binding in its entirety and directly applicable in all Member States.