Brussels, 7 July 2006
The European Commission has welcomed the European Parliament's agreement at first reading on the Commission's proposal for a Regulation to tighten controls on money transfers in order to cut off funding sources for terrorists and other criminals (see IP/05/1008). The proposed Regulation would require that money transfers be accompanied by the identity of the sender including the name, address and account number. This would assist the appropriate law enforcement authorities in detecting and investigating terrorists and other criminals, and in tracing their assets. This proposal is part of the EU Plan of Action to Combat Terrorism and would bring EU policy into line with the recommendations of the Financial Action Task Force (FATF), the international body that sets standards to combat money laundering and terrorist financing. The Council of Ministers is expected to vote on the proposal in due course.
Internal Market and Services Commissioner Charlie McCreevy said: “Today's vote is an important step towards our aim of cutting off terrorist funding. It shows the EU's determination to participate fully in the international effort to combat terrorism. I now call upon the Council to give its agreement as soon as possible.”
In order to ensure the traceability of money transfers, the proposed Regulation introduces 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, or detecting 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, they will have to subject
those funds to special scrutiny, regardless of the amounts involved. Ultimately
this could mean that banks or money remitters reject unidentified transfers, or
consider restricting or even terminating business relationships with their
counterparts when they systematically fail to provide information on the sender.
The Regulation is expected to come into force by 1st January 2007 at the