Regulation (EC) No 1781/2006 of the European Parliament and of the Council of 15 November 2006 on information on the payer accompanying transfers of funds (Text with EEA relevance)

Publication Date08 December 2006
SubjectInformation and verification,Justice and home affairs
Official Gazette PublicationOfficial Journal of the European Union, L 345, 08 December 2006
Consolidated TEXT: 32006R1781 — EN — 28.12.2006

2006R1781 — EN — 28.12.2006 — 000.001


This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents

►B REGULATION (EC) No 1781/2006 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 15 November 2006 on information on the payer accompanying transfers of funds (Text with EEA relevance) (OJ L 345, 8.12.2006, p.1)


Corrected by:

►C1 Corrigendum, OJ L 323, 8.12.2007, p. 59 (1781/06)




▼B

REGULATION (EC) No 1781/2006 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 15 November 2006

on information on the payer accompanying transfers of funds

(Text with EEA relevance)



THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 95 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Central Bank ( 1 ),

Acting in accordance with the procedure laid down in Article 251 of the Treaty ( 2 ),

Whereas:
(1) Flows of dirty money through transfers of funds can damage the stability and reputation of the financial sector and threaten the internal market. Terrorism shakes the very foundations of our society. The soundness, integrity and stability of the system of transfers of funds and confidence in the financial system as a whole could be seriously jeopardised by the efforts of criminals and their associates either to disguise the origin of criminal proceeds or to transfer funds for terrorist purposes.
(2) In order to facilitate their criminal activities, money launderers and terrorist financers could try to take advantage of the freedom of capital movements entailed by the integrated financial area, unless certain coordinating measures are adopted at Community level. By its scale, Community action should ensure that Special Recommendation VII on wire transfers (SR VII) of the Financial Action Task Force (FATF) established by the Paris G7 Summit of 1989 is transposed uniformly throughout the European Union, and, in particular, that there is no discrimination between national payments within a Member State and cross-border payments between Member States. Uncoordinated action by Member States alone in the field of cross-border transfers of funds could have a significant impact on the smooth functioning of payment systems at EU level, and therefore damage the internal market in the field of financial services.
(3) In the wake of the terrorist attacks in the USA on 11 September 2001, the extraordinary European Council on 21 September 2001 reiterated that the fight against terrorism is a key objective of the European Union. The European Council approved a plan of action dealing with enhanced police and judicial cooperation, developing international legal instruments against terrorism, preventing terrorist funding, strengthening air security and greater consistency between all relevant policies. This plan of action was revised by the European Council following the terrorist attacks of 11 March 2004 in Madrid, and now specifically addresses the need to ensure that the legislative framework created by the Community for the purpose of combating terrorism and improving judicial cooperation is adapted to the nine Special Recommendations against Terrorist Financing adopted by the FATF.
(4) In order to prevent terrorist funding, measures aimed at the freezing of funds and economic resources of certain persons, groups and entities have been taken, including Regulation (EC) No 2580/2001 ( 3 ), and Council Regulation (EC) No 881/2002 ( 4 ). To that same end, measures aimed at protecting the financial system against the channelling of funds and economic resources for terrorist purposes have been taken. Directive 2005/60/EC of the European Parliament and of the Council ( 5 ) contains a number of measures aimed at combating the misuse of the financial system for the purpose of money laundering and terrorist financing. Those measures do not, however, fully prevent terrorists and other criminals from having access to payment systems for moving their funds.
(5) In order to foster a coherent approach in the international context in the field of combating money laundering and terrorist financing, further Community action should take account of developments at that level, namely the nine Special Recommendations against Terrorist Financing adopted by the FATF, and in particular SR VII and the revised interpretative note for its implementation.
(6) The full traceability of transfers of funds can be a particularly important and valuable tool in the prevention, investigation and detection of money laundering or terrorist financing. It is therefore appropriate, in order to ensure the transmission of information on the payer throughout the payment chain, to provide for a system imposing the obligation on payment service providers to have transfers of funds accompanied by accurate and meaningful information on the payer.
(7) The provisions of this Regulation apply without prejudice to Directive 95/46/EC of the European Parliament and of the Council ( 6 ). For example, information collected and kept for the purpose of this Regulation should not be used for commercial purposes.
(8) Persons who merely convert paper documents into electronic data and are acting under a contract with a payment service provider do not fall within the scope of this Regulation; the same applies to any natural or legal person who provides payment service providers solely with messaging or other support systems for transmitting funds or with clearing and settlement systems.
(9) It is appropriate to exclude from the scope of this Regulation transfers of funds that represent a low risk of money laundering or terrorist financing. Such exclusions should cover credit or debit cards, Automated Teller Machine (ATM) withdrawals, direct debits, truncated cheques, payments of taxes, fines or other levies, and transfers of funds where both the payer and the payee are payment service providers acting on their own behalf. In addition, in order to reflect the special characteristics of national payment systems, Member States may exempt electronic giro payments, provided that it is always possible to trace the transfer of funds back to the payer. Where Member States have applied the derogation for electronic money in Directive 2005/60/EC, it should be applied under this Regulation, provided the amount transacted does not exceed EUR 1 000.
(10) The exemption for electronic money, as defined by Directive 2000/46/EC of the European Parliament and of the Council ( 7 ), covers electronic money irrespective of whether the issuer of such money benefits from a waiver under Article 8 of that Directive.
(11) In order not to impair the efficiency of payment systems, the verification requirements for transfers of funds made from an account should be separate from those for transfers of funds not made from an account. In order to balance the risk of driving transactions underground by imposing overly strict identification requirements against the potential terrorist threat posed by small transfers of funds, the obligation to check whether the information on the payer is accurate should, in the case of transfers of funds not made from an account, be imposed only in respect of individual transfers of funds that exceed EUR 1 000, without prejudice to the obligations under Directive 2005/60/EC. For transfers of funds made from an account, payment service providers should not be required to verify information on the payer accompanying each transfer of funds, where the obligations under Directive 2005/60/EC have been met.
(12) Against the background of Regulation (EC) No 2560/2001 of the European Parliament and of the Council ( 8 ) and the Commission Communication ‘A New Legal Framework for Payments in the Internal Market’, it is sufficient to provide for simplified information on the payer to accompany transfers of funds within the Community.
(13) In order to allow the authorities responsible for combating money laundering or terrorist financing in third countries to trace the source of funds used for those purposes, transfers of funds from the Community to outside the Community should carry complete information on the payer. Those authorities should be granted access to complete information on the payer only for the purposes of preventing, investigating and detecting money laundering or terrorist financing.
(14) For transfers of funds from a single payer to several payees to be sent in an inexpensive way in batch files containing individual transfers from the Community to outside the Community, provision should be made for such individual transfers to carry only the account number of the payer or a unique identifier provided that the batch file contains complete information on the payer.
(15) In order to check whether the required information on the payer accompanies transfers of funds, and to help to identify suspicious transactions, the payment service provider of the payee should have effective procedures in place in order to detect whether information on the payer is missing.
(16) Owing to the potential terrorist financing threat posed by anonymous transfers, it is appropriate to enable the payment service provider of the payee to avoid or correct such situations when it becomes aware that information on the payer is missing or incomplete. In this regard, flexibility should be allowed as concerns the extent of information on the payer on a risk-sensitive basis. In addition, the accuracy and completeness of information on the payer should remain the responsibility of
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