Brussels, 26 July 2005
A proposal to tighten controls of money transfers in order to cut off funding sources for terrorists and other criminals has been presented by the European Commission. The proposed Regulation would require that money transfers be accompanied by the identity of the sender including the name, address and account number. The proposed measures will ensure that this information will be immediately available to the appropriate law enforcement authorities and will assist them in detecting, investigating and prosecuting terrorists and other criminals and tracing their assets. This proposal is part of the EU Plan of Action to Combat Terrorism.
Internal Market Commissioner Charlie McCreevy said: “The fight against terrorism requires a sustained and focused effort on many fronts. One of these is to cut off the funding for terrorist actions. Only one month after the final adoption by the Financial Action Task Force, of an international standard on money transfers, the Commission shows, with the adoption of this proposal, its determination to fully participate in the international effort to combat terrorism”.
In order to ensure the traceability of money transfers, the proposal establishes obligations for banks and money remitters involved in the payment chain. The requirements apply to transfers of funds in any currency that are sent or received by a payment service provider in the EU. The name, address and account number of the sender of the transfer must always be transmitted together with the funds. This information will only be provided to the competent authorities for the purposes of preventing, investigating, detecting, or prosecuting money laundering or terrorist financing.
A simplified version of this regime is proposed for money transfers within the EU, in line with the efforts to build a single market for payments.
As even small amounts can be used to finance terrorism, banks or money remitters will have to transmit information on the sender regardless of the amounts involved. Similarly, when receiving funds, regardless of the amounts involved, they will have to subject those funds to special scrutiny, and ultimately reject any unidentified transfers or terminate business relationships with their counterparts when these systematically fail to provide information on the sender.
The UK Presidency has indicated that it will give priority to this proposal
and technical discussions are due to begin imminently.
 The Financial Action Task Force (FATF) was established by G7 in 1989. It is the world standard in the fight against money laundering and terrorist financing.