Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on information accompanying transfers of funds
Date: 2013-02-05
Institutions: European Commission
Subjects: capital transfer, disclosure of information, economic offence, money laundering, personal data, terrorism, traceability

EUROPEAN 
COMMISSION 

Strasbourg, 5.2.2013  
COM(2013) 44 final 

2013/0024 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on information accompanying transfers of funds  

(Text with EEA relevance) 

{SWD(2013) 21} 
{SWD(2013) 22} 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Grounds for and objectives of the proposal 

The purpose of this proposal is to revise Regulation (EC) No 1781/2006 on information on the 
payer  accompanying  transfers  of  funds1  (hereinafter  referred  to  as  the  "Funds  Transfers 
Regulation")  in  ways  which  improve  traceability  of  payments  and  ensure  that  the  EU 
framework remains fully compliant with international standards.  

General context 

The  Funds  Transfers  Regulation  lays  down  rules  for  payment  service  providers  to  send 
information  on  the  payer  throughout  the  payment  chain  for  the  purposes  of  prevention, 
investigation and detection of money laundering and terrorist financing. 

The Regulation was to a large extent based on Special Recommendation VII on wire transfers 
adopted by the Financial Action Task Force2 (FATF) and aims to ensure that this international 
standard  is  transposed  uniformly  through  the  Union  and,  in  particular,  that  there  is  no 
discrimination between national payments within a Member State and cross-border payments 
between Member States. 

Against  the  background  of  the  changing  nature  of  money  laundering  and  terrorist  financing 
threats,  facilitated  by  a  constant  evolution  of  technology  and  means  at  the  disposal  of 
criminals,  the  FATF  has  undertaken  a  fundamental  review  of  the  international  standards, 
which culminated in the adoption of a new set of Recommendations in February 2012. 

In  parallel  to  this  process,  the  European  Commission  has  also  been  undertaking  its  own 
review of the EU framework. This review has comprised an external study published by the 
Commission  on  the  application  of  the  Funds  Transfers  Regulation,  extensive  contacts  and 
consultations  with  private  stakeholders  and  civil  society  organisations,  as  well  as  with 
representatives of EU Member State regulatory and supervisory authorities. 

The  implications  of  this  work  are  that  the  EU  framework,  including  the  Funds  Transfers 
Regulation,  will  need  to  evolve  and  adjust  to  changes  which  should  see  an  increased  focus 
placed  on  (a)  the  effectiveness  of  regimes  to  counter  money  laundering  and  terrorist 
financing,  (b)  greater  clarity  and  consistency  of  the  rules  across  Member  States,  and  (c)  a 
broadened scope designed to address new threats and vulnerabilities. 

Existing provisions in this area 

Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on 
the  prevention  of  the  use  of  the  financial  system  for  the  purpose  of  money  laundering  and 
terrorist  financing3  (hereinafter  referred  to  as  the  "Third  AML  Directive")  sets  out  the 
framework  designed  to  protect  the  soundness,  integrity  and  stability  of  credit  and  financial 
institutions  and  confidence  in  the  financial  system  as  a  whole,  against  the  risks  of  money 
laundering and terrorist financing. 

1 
2 

3 

OJ L 345, 8.12.2006, p. 1. 
FATF is the international body established by the Paris G7 summit in 1989, and which is considered as 
the world standard in the fight against money laundering and terrorist financing. 
OJ L 309, 25.11.2005, p. 15. 

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Directive 2006/70/EC4 (the "implementing Directive") lays down implementing measures for 
the  Third  AML  Directive  as  regards  the  definition  of  politically  exposed  persons  and  the 
technical  criteria  for  simplified  customer  due  diligence  procedures  and  for  exemption  on 
grounds of a financial activity conducted on an occasional or very limited basis. 

The  Funds  Transfers  Regulation  complements  those  measures  by  ensuring  that  basic 
information  on  the  payer  of  transfers  of  funds  is  immediately  available  to  appropriate  law 
enforcement  and/or  prosecutorial  authorities  to  assist  them  in  detecting,  investigating, 
prosecuting terrorists or other criminals and tracing the assets of terrorists.  

Consistency with other policies and objectives of the Union 

The proposal is consistent with and complements the Proposal for a Directive of the European 
Parliament  and  the  Council  on  the  prevention  of  the  use  of  the  financial  system  for  the 
purpose of money laundering and terrorist financing. These two legislative instruments pursue 
the  common  objective  of  revising  the  existing  anti-money  laundering  and  counter  terrorist 
financing EU framework in order to improve its effectiveness while ensuring its compliance 
with international standards. 
The  proposal  is  also  consistent  with  the  objectives  of  the  EU's  Internal  Security  Strategy5, 
which identifies the most urgent challenges to EU security in the years to come and proposes 
five strategic objectives and specific actions for 2011-2014 to help make the EU more secure. 
This includes tackling money laundering and preventing terrorism, in particular, by updating 
the  EU  framework  with  a  view  to  enhancing  the  transparency  of  information  on  beneficial 
ownership of legal persons. 

With regard to data protection, the proposed clarifications on the processing of personal data 
are in line with the approach set out in the Commission's recent data protection proposals6. 

With regard to sanctions, the proposal to introduce a set of minimum principle-based rules to 
strengthen administrative sanctions and measures is consistent with the Commission's policy 
as outlined in its Communication "Reinforcing  sanctioning regimes in the financial services 
sector"7. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

Consultation of interested parties 

In April 2012, the Commission adopted a report on the application of Directive 2005/60/EC 
and solicited comments from all stakeholders8. The annex to this report, in particular, focused 
on  cross-border  wire  transfers  and,  namely,  on  the  two  new  requirements  of  including 
beneficiary  information  in  wire  transfers,  and  taking  freezing  action  with  respect  to  UN 
Resolutions. 

The Commission received only 4 contributions referring expressly to the annex to the report. 
Respondents  were  asking  for  a  consultation  of  interested  parties  from  all  countries  and 
territories  affected  by  the  Funds  Transfers  Regulation,  highlighting  the  need  that  any 

4 
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6 
7 
8 

OJ L 214, 4.8.2006, p. 29. 
COM (2010)673 final. 
COM(2012)10 final and COM(2012)11 final. 
COM(2010)716 final. 
The  Commission  report,  the  replies  from  stakeholders  and  the  feedback  statement  are  available  at 
http://ec.europa.eu/internal_market/company/financial-crime/index_en.htm 

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additional  requirement  or  obligation  imposed  on  payment  service  providers  would  be 
proportionate and straightforward to meet. 

Extensive  consultations  with  interested  parties  have  been  undertaken  in  the  context  of  the 
external  consultants'  study9  carried  out  on  behalf  of  the  European  Commission,  which 
approached  108  stakeholders  and  involved  phone  interviews  and  the  completion  of  a 
structured questionnaire. 

Use of expertise 

Over  the  course  of  2012,  a  study  by  external  consultants  was  carried  out  on  behalf  of  the 
Commission  to  gather  evidence  about  how  the  Funds  Transfers  Regulation  is  working  in 
Member States and the problems which have arisen10. 

The study, in particular, provides a number of recommendations, including: 

– 

– 

– 

– 

– 

– 

– 

introduce  the  obligation  for  Payment  Service  Providers  to  ensure  that  all  originator 
and beneficiary information is retained with wire transfers;  

define what beneficiary information needs to be verified, and by whom; 

consider introducing a “simplified” regime for cross-border wire transfers amounting 
to  EUR  1  000  or  less,  unless  there  is  suspicion  of  money-laundering  or  terrorist 
financing; 

further clarify the reporting obligations for Payment Service Providers;  

explicitly  prohibit  the  execution  of  wire  transfers  if  it  does  not  comply  with  the 
necessary requirements (completeness and accuracy of the information);  

beneficiary  Payment  Service  Providers  to  implement  effective  risk-based  policies 
and procedures to determine appropriate follow-up actions; 

consider data protection implications. 

Impact assessment 

This proposal is accompanied by an impact assessment which identifies the main problems in 
the current EU anti-money laundering/combating terrorist financing legislative framework11: 
(i) inconsistency with the recently revised international standards; (ii) different interpretation 
of rules across Member States; and (iii) inadequacies and loopholes with respect to the new 
money laundering and terrorist financing risks. As a consequence, the effectiveness of counter 
money  laundering  and  terrorist  financing  regimes  is  reduced  with  a  negative  reputational, 
economic and financial impact. 

The impact assessment analyses the following three scenarios:  

(1) 

(2) 

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10 
11 

a base-line scenario that the Commission takes no action;  

an adjustment scenario that entails limited changes to the Funds Transfers Regulation 
necessary to either (i) align the legislative text to the revised international standards, 
or  (ii)  to  ensure  a  sufficient  level  of  consistency  between  national  rules,  or  (iii)  to 
address the most important shortcomings concerning the new emerging threats; and  

The study is available at http://ec.europa.eu/internal_market/company/financial-crime/index_en.htm 
Ibidem. 
The 
crime/index_en.htm 

is  available  at  http://ec.europa.eu/internal_market/company/financial-

Impact  assessment 

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(3) 

a  full  harmonisation  scenario  that  entails  major  policy  changes  and  additional 
elements of harmonisation, in recognition of any EU specificities.  

The analysis carried out in the impact assessment has demonstrated that the second scenario is 
the  most  balanced  in  aligning  the  Funds  Transfers  Regulation  with  the  revised  international 
standards while ensuring sufficient level of consistency between national rules and flexibility 
in their implementation. 

In  addition,  the  impact  assessment  analysed  the  impact  of  the  legislative  proposals  on  the 
Fundamental  Rights.  In  line  with  the  Charter  of  Fundamental  rights,  the  proposals  seek  in 
particular to ensure protection of personal data (Article 8 of the Charter) as regards the storage 
and transfer of personal data.  

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

Legal basis 

Article 114 of the Treaty on the Functioning of the European Union.  

Subsidiarity and proportionality 

There  is  a  general  consensus,  emanating  from  all  stakeholders  (in  particular  Member  States 
and the payment industry), that the objectives of the proposal cannot be sufficiently achieved 
by the Member States and would be better attained by EU action.  

Non-coordinated action by Member States alone in the field of cross-border transfers of funds 
could  significantly  impact  on  the  smooth  functioning  of  payment  systems  at  EU  level,  and 
therefore  damage  the  internal  market  in  the  field  of  financial  services  (see  Recital  2  of  the 
Funds Transfers Regulation). 

By  the  scale  of  its  action,  the  Union  shall  guarantee  a  uniform  transposition  of  new  FATF 
Recommendation  16  through  the  EU,  and,  in  particular,  that  there  is  no  discrimination 
between  national  payments  within  a  Member  State  and  cross-border  payments  between 
Member States. 

The proposal therefore complies with the subsidiarity principle. 

With regard to the proportionality principle, in conformity with the analysis carried out in the 
impact  assessment  the  proposal  transposes  the  revised  FATF  Recommendation  on  "wire 
transfers"  by  introducing  the  minimum  requirements  essential  to  ensure  the  traceability  of 
transfers of funds without going beyond what is necessary to achieve its objectives. 

4. 

BUDGETARY IMPLICATION 

This proposal has no impact on the Union budget. 

5. 

ADDITIONAL INFORMATION 

Detailed explanation of the proposal  

In  line  with  new  FATF  Recommendation  16  on  "wire  transfers"  and  the  accompanying 
Interpretative  note,  the  proposed  changes  are  aimed  at  addressing  areas  where  gaps  in 
transparency still remain. 

The intention is to enhance traceability by imposing the following main requirements: 

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include information on the payee; 

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– 

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– 

with regard to the scope of the Regulation, clarify that credit or debit cards, or mobile 
telephone  or  any  other  digital  or  IT  device  become  subject  to  the  provisions  of  the 
regulation if they are used to transfer funds person to person. In addition, clarify that 
below EUR 1 000, in the case of fund transfers outside the EU, a lighter regime of 
non-verified information on the payer and the payee applies (as opposed to possible 
exemptions from scope as in Regulation (EC) No 1781/2006); 

with  regard  to  obligations  of  the  Payment  Service  Provider  (PSP)  of  the  payee, 
imposing  a  requirement  to  verify  the  identity  of  the  beneficiary  (where  not 
previously identified) for payments originating outside the EU and where the amount 
is more than EUR 1 000. With regard to the PSP of the payee and the intermediary 
PSP,  an  obligation  to  establish  risk-based  procedures  for  determining  when  to 
execute,  reject  or  suspend  a  transfer  of  funds  which  lacks  the  required  information 
and to determine appropriate follow-up action; 

with  regard  to  data  protection,  align  the  requirements  of  record  keeping  of  the 
information  with  the  FATF  standards,  in  accordance  with  the  new  regime  foreseen 
by the Directive [xxxx/yyyy];  

with  regard  to  sanctions,  reinforcement  of  sanctioning  powers  for  competent 
authorities  and  a  requirement  to  coordinate  actions  when  dealing  with  cross-border 
cases;  a  requirement  for  sanctions  imposed  for  breaches  to  be  published;  and  a 
requirement to establish effective mechanisms to encourage reporting of breaches of 
the provisions of the Regulation. 

European Economic Area 

The  proposed  act  concerns  an  EEA  matter  and  should  therefore  extend  to  the  European 
Economic Area. 

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2013/0024 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on information accompanying transfers of funds  

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 114 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 
Having regard to the opinion of the European Economic and Social Committee1, 
Having regard to the opinion of the European Central Bank2, 
After consulting the European Data Protection Supervisor3, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

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. 

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  Union 
level.  By  its  scale,  Union  action  should  ensure  that  Recommendation  16  on  wire 
transfers  of  the  Financial  Action  Task  Force  (FATF),  adopted  in  February  2012  is 
transposed  uniformly  throughout  the  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  Union  level  and  therefore  damage  the 
internal market in the field of financial services. 

(3) 

It  has  been  pointed  out  in  the  Union’s  revised  Strategy on  Terrorist  Financing  of  17 
July 20084 that efforts have to be maintained to prevent terrorist financing and the use 

1 
2 
3 
4 

OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
http://register.consilium.europa.eu/pdf/en/08/st11/st11778-re01.en08.pdf 

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(4) 

(5) 

(6) 

(7) 

by suspected terrorists of their own financial resources. It is recognised that the FATF 
is  constantly  seeking  to  improve  its  Recommendations  and  working  towards  a 
common understanding of how these should be implemented. It is noted in the Union's 
revised  Strategy  that  implementation  of  those  Recommendations  by  all  FATF 
members  and  members  of  FATF-style  regional  bodies  is  assessed  on  a  regular  basis 
and  that  from  this  point  of  view  a  common  approach  to  implementation  by  Member 
States is important. 

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 of 27 December 2001 on specific restrictive measures 
directed against certain persons and entities with a view to combating terrorism5, and 
Council  Regulation  (EC)  No  881/2002  of  27  May  2002  imposing  certain  specific 
restrictive  measures  directed  against  certain  persons  and  entities  associated  with  the 
Al-Qaida  network6.  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 [xxxx/yyyy] of the European Parliament and of the Council 
of  on  the  prevention  of  the  use  of  the  financial  system  for  the  purpose  of  money 
laundering  and  terrorist  financing7  contains  a  number  of  such  measures.  Those 
measures  do  not,  however,  fully  prevent  terrorists  and  other  criminals  from  having 
access to payment systems for moving their funds. 

In  order  to  foster  a  coherent  approach  in  the  international  context  in  the  field  of 
combating money laundering and terrorist financing, further Union action should take 
account  of  developments  at  that  level,  namely  the  International  Standards  on 
combating money-laundering and the financing of terrorism and proliferation adopted 
in  2012  by  the  FATF,  and  in  particular  Recommendation  16  and  the  revised 
interpretative note for its implementation. 

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 
throughout  the  payment  chain,  to  provide  for  a  system  imposing  the  obligation  on 
payment service providers to have transfers of funds accompanied by information on 
the payer and the payee. 

The  provisions  of  this  Regulation  apply  without  prejudice  to  national  legislation 
implementing Directive 95/46/EC of the European Parliament and of the Council of 24 
October  1995  on  the  protection  of  individuals  with  regard  to  the  processing  of 
personal  data  and  on  the  free  movement  of  such  data8.  For  example,  personal  data 
collected  for  the  purpose  of  complying  with  this  Regulation  should  not  be  further 
processed  in  a  way  inconsistent  e  with  Directive  95/46/EC.  In  particular,  further 
processing  for  commercial  purposes  should  be  strictly  prohibited.  The  fight  against 
money laundering and terrorist financing is recognised as an important public interest 
ground by all Member States. Hence, in the application of this Regulation, the transfer 
of  personal  data  to  a  third  country  which  does  not  ensure  an  adequate  level  of 
protection  in  the  meaning  of  Article  25  of  Directive  95/46/EC  should  be  permitted 
according to Article 26 (d) of the same Directive. 

5 
6 
7 
8 

OJ L 344, 28.12.2001, p. 70. 
OJ L 139, 29.5.2002, p. 9. 
OJ L , , p. . 
OJ L 281, 23.11.1995, p. 31. 

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(8) 

(9) 

(10) 

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. 

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,  mobile  telephones  or  other  digital  or  information 
technology (IT) devices, Automated Teller Machine (ATM) withdrawals, 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. However, there must be no exemption when a debit 
or credit card, a mobile telephone or other digital or IT prepaid or postpaid device is 
used in order to effect a person-to-person transfer.  

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,. 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 
[xxxx/yyyy] have been met. 

(11)  Against  the  background  of  the  Union  payment  legislation  -  Regulation  (EC)  No 
924/2009  of  the  European  Parliament  and  of  the  Council  of  16  September  2009  on 
cross-border  payments  in  the  Community9,  Regulation  (EU)  No  260/2012  of  the 
European Parliament and of the Council of 14 March 2012 establishing technical and 
business  requirements  for  credit  transfers  and  direct  debits  in  euro10
  and  Directive 
2007/64/EC of the European Parliament and of the Council of 13 November 2007 on 
payment  services  in  the  internal  market11
  -  it  is  sufficient  to  provide  for  simplified 
information on the payer to accompany transfers of funds within the Union. 

(12) 

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  Union  to  outside  the  Union  should  carry 
complete information on the payer and the payee. 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. 

(13)  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  Union  to 
outside the Union, provision should be made for such individual transfers to carry only 

9 
10 
11 

OJ L 266, 9.10.2009, p. 11. 
OJ L 94, 30.3.2012, p. 22. 
OJ L 319, 5.12.2007, p. 1. 

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the  account  number  of  the  payer  or  his  unique  transaction  identifier  provided  that 
complete information on the payer and the payee is contained in the batch file. 

(14) 

In  order  to  check  whether  the  required  information  on  the  payer  and  the  payee 
accompanies  transfers  of  funds,  and  to  help  to  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. 

(15)  Owing  to  the  potential  terrorist  financing  threat  posed  by  anonymous  transfers,  it  is 
appropriate to require payment service providers to request information on the payer 
and  the  payee.  In  line  with  the  risk  based  approach  developed  by  FATF,  it  is 
appropriate  to  identify  areas  of  higher  and  lower  risk  with  a  view  to  better  targeting 
money  laundering  and  terrorist  financing  risks.  Accordingly,  the  payment  service 
provider of the payee and the intermediary service provider should establish effective 
risk-based procedures for cases where a transfer of funds lacks the required payer and 
payee  information,  in  order  to  decide  whether  to  execute,  reject  or  suspend  that 
transfer  and  what  appropriate  follow-up  action  to  take.  Where  the  payment  service 
provider  of  the  payer  is  established  outside  the  territory  of  the  Union,  enhanced 
customer due diligence should be applied, in accordance with Directive [xxxx/yyyy], 
in  respect  of  cross-border  correspondent  banking  relationships  with  that  payment 
service provider. 

(16)  The  payment  service  provider  of  the  payee  and  the  intermediary  payment  service 
provider should exercise special vigilance, assessing the risks, when it becomes aware 
that information on the payer and the payee is missing or incomplete and should report 
suspicious transactions to the competent authorities, in accordance with the reporting 
obligations set out in Directive [xxxx/yyyy] and national implementing measures. 

(17)  The  provisions  on  transfers  of  funds  where  information  on  the  payer  or  the  payee  is 
missing or incomplete apply without prejudice to any obligations on payment service 
providers  and  the  intermediary  payment  service  providers  to  suspend  and/or  reject 
transfers of funds which violate provisions of civil, administrative or criminal law. 

(18)  Until  technical  limitations  that  may  prevent  intermediary  payment  service  providers 
from satisfying the obligation to transmit all the information they receive on the payer 
are removed, those intermediary payment service providers should keep records of that 
information.  Such  technical  limitations  should  be  removed  as  soon  as  payment 
systems are upgraded. 

(19)  Since in criminal investigations it may not be possible to identify the data required or 
the individuals involved until many months, or even years, after the original transfer of 
funds  and  in  order  to  be  able  to  have  access  to  essential  evidence  in  the  context  of 
investigations, it is appropriate to require payment service providers to keep records of 
information  on  the  payer  and  the  payee  for the purposes of preventing,  investigating 
and detecting money laundering or terrorist financing. This period should be limited.  

(20)  To  enable  prompt  action  to  be  taken  in  the  fight  against  terrorism,  payment  service 
providers  should  respond  promptly  to  requests  for  information  on  the  payer  from  the 
authorities  responsible  for  combating  money  laundering  or  terrorist  financing  in  the 
Member State where they are established. 

(21)  The number of working days in the Member State of the payment service provider of 
the payer determines the number of days to respond to requests for information on the 
payer. 

EN 

10 

   EN 

(22) 

In  order  to  improve  compliance  with  the  requirements  of  this  Regulation  and 
following the Commission Communication of 9 December 2010 entitled 'Reinforcing 
sanctioning regimes in the financial services sector'12, the power to adopt supervisory 
measures  and  the  sanctioning  powers  of  competent  authorities  should  be  enhanced. 
Administrative  sanctions  should  be  foreseen  and,  given  the  importance  of  the  fight 
against  money  laundering  and  terrorist  financing,  Member  States  should  lay  down 
sanctions  that  are  effective,  proportionate  and  dissuasive.  Member  States  should  notify 
the  Commission  thereof,  as  well  as  the  European  Supervisory  Authority  (European 
Banking Authority) (hereinafter ‘EBA’), established by Regulation (EU) No 1093/2010 of 
the  European  Parliament  and  of  the  Council  of  24  November  2010  establishing  a 
European Supervisory Authority (European Banking Authority), amending Decision No 
716/2009/EC and repealing Commission Decision 2009/78/EC; the European Supervisory 
Authority  (European  Insurance  and  Occupational  Pensions  Authority)  (hereinafter 
‘EIOPA’), established by Regulation (EU) No 1094/2010 of the European Parliament and 
of  the  Council  of  24  November  2010  establishing  a  European  Supervisory  Authority 
(European  Insurance  and  Occupational  Pensions  Authority),  amending  Decision  No 
716/2009/EC  and  repealing  Commission  Decision  2009/79/EC;  and  the  European 
Supervisory  Authority  (European  Securities  and  Markets  Authority)  (hereinafter 
‘ESMA’), established by Regulation (EU) No 1095/2010 of the European Parliament and 
of  the  Council  of  24  November  2010  establishing  a  European  Supervisory  Authority 
(European  Securities  and  Markets  Authority),  amending  Decision  No  716/2009/EC  and 
repealing Commission Decision 2009/77/EC. 

(23) 

In order to ensure uniform conditions for the implementation of Articles XXX of this 
Regulation,  implementing  powers  should  be  conferred  on  the  Commission.  Those 
powers should be exercised in accordance with Regulation (EU) No 182/2011 of the 
European  Parliament  and  of  the  Council  of  16  February  2011  laying  down  the  rules 
and  general  principles  concerning  mechanisms  for  control  by  Member  States  of  the 
Commission's exercise of implementing powers13. 

(24)  A  number  of  countries  and  territories  which  do  not  form  part  of  the  territory  of  the 
Union share a monetary union with a Member State, form part of the currency area of 
a Member State or have signed a monetary convention with the Union represented by 
a  Member  State,  and  have  payment  service  providers  that  participate  directly  or 
indirectly  in  the  payment  and  settlement  systems  of  that  Member  State.  In  order  to 
avoid  the  application  of  this  Regulation  to  transfers  of  funds  between  the  Member 
States concerned and those countries or territories having a significant negative effect 
on the economies of those countries or territories, it is appropriate to provide for the 
possibility  for  such  transfers  of  funds  to  be  treated  as  transfers  of  funds  within  the 
Member States concerned. 

(25) 

In  view  of  the  amendments  that  would  need  to  be  made  to  Regulation  (EC)  No 
1781/2006 of 15 November 2006 on information on the payer accompanying transfers 
of funds, it should be repealed for reasons of clarity. 

(26)  Since  the  objectives  of  this  Regulation  cannot  be  sufficiently  achieved  by  Member 
States  and  can  therefore,  by  reason  of  the  scale  or  effects  of  the  action,  be  better 
achieved  at  Union  level,  the  Union  may  adopt  measures,  in  accordance  with  the 
principle of subsidiarity  as  set  out  in  Article 5 of the Treaty.  In accordance with the 

12 
13 

COM(2010)716 final. 
OJ L 55, 28.2.2011, p. 13. 

EN 

11 

   EN 

                                                 
principle  of  proportionality,  as  set  out  in  that  Article,  this  Regulation  does  not  go 
beyond what is necessary in order to achieve those objectives. 

(27)  This  Regulation  respects  the  fundamental  rights  and  observes  the  principles 
recognized by the Charter of Fundamental Rights of the European Union, in particular 
the right to respect for private and family life (Article 7), the right to the protection of 
personal data (Article 8) and the right to an effective remedy and to a fair trial (Article 
47) and the principle of ne bis in idem. 

(28) 

In  order  to  ensure  a  smooth  introduction  of  the  new  anti-money  laundering  and 
terrorist financing framework, it is appropriate to coincide the application date of this 
Regulation with the end of the transposition deadline for Directive [xxxx/yyyy], 

HAVE ADOPTED THIS REGULATION: 

CHAPTER I 

SUBJECT MATTER, DEFINITIONS AND SCOPE 

Article 1 

Subject matter 

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

Article 2 

Definitions 

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

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

‘terrorist financing’ means terrorist financing as defined in Article 1(4) of Directive 
[xxxx/yyyy]; 

‘money laundering’ means the money laundering activities referred to in Article 1(2) 
or (3) of Directive [xxxx/yyyy]; 

‘payer’  means  a  natural  or  legal  person  who  either  carries  out  a  transfer  of  funds 
from his or her own account or who places an order for a transfer of funds; 

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

‘payment service provider’ means a natural or legal person who provides the service 
of transferring funds in his or her professional capacity; 

‘intermediary payment  service  provider’ means a payment service provider, neither 
of the payer nor of the payee, who receives and transmits a fund transfer on behalf of 
the payment service provider of the payer or of the payee or of another intermediary 
payment service provider; 

EN 

12 

   EN 

 
 
(7) 

(8) 

(9) 

‘transfer of funds’ means any transaction carried out by electronic means on behalf 
of a payer through a payment service provider, with a view to making funds available 
to a payee through a payment service provider, irrespective of whether the payer and 
the payee are the same person; 

‘batch  file  transfer’  means  a  bundle  of  several  individual  transfers  of  funds  put 
together for transmission; 

‘unique transaction identifier’ means a combination of letters or symbols determined 
by  the  payment  service  provider,  in  accordance  with  the  protocols  of  the  payment 
and  settlement  systems  or  messaging  systems  used  for  the  fund  transfer,  which 
permits traceability of the transaction back to the payer and the payee;  

(10) 

‘a  person-to-person’  transfer  of  funds  means  a  transaction  between  two  natural 
persons. 

Article 3 

Scope 

1. 

2. 

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

This  Regulation  shall  not  apply  to  transfers  of  funds  carried  out  using  a  credit  or 
debit card, or a mobile telephone or any other digital or information technology (IT) 
device, where the following conditions are fulfilled: 

(a) 

(b) 

the card or device is used to pay goods and services;  

the  number  of  the  abovementioned  card  or  device  accompanies  all  transfers 
flowing from the transaction.  

However,  this  Regulation  shall  apply  when  a  credit  or  debit  card,  or  a  mobile 
telephone,  or  any  other  digital  or  IT  device  is  used  in  order  to  effect  a  person-to-
person transfer of funds. 

3. 

This Regulation shall not apply to transfers of funds: 

(a)  where the transfer of funds entails the payer withdrawing cash from his or her 

own account; 

(b)  where funds are transferred to public authorities as payment for taxes, fines or 

other levies within a Member State; 

(c)  where  both  the  payer  and  the  payee  are  payment  service  providers  acting  on 

their own behalf. 

EN 

13 

   EN 

 
CHAPTER II 

OBLIGATIONS ON PAYMENT SERVICE PROVIDERS 

SECTION 1 

OBLIGATIONS ON THE PAYMENT SERVICE PROVIDER OF THE PAYER 

Article 4 

Information accompanying transfers of funds  

1. 

The payment service provider of the payer shall ensure that the transfer of funds is 
accompanied by the following information on the payer: 

(a) 

(b) 

the name of the payer; 

the  payer's  account  number,  where  such  an  account  is  used  to  process  the 
transfer  of  funds,  or  a  unique  transaction  identifier  where  no  such  account  is 
used for that purpose; 

(c) 

the  payer’s  address,  or  national  identity  number,  or  customer  identification 
number, or date and place of birth. 

2. 

The  payment  service  provider  of  the  payer  shall  ensure  that  transfers  of  funds  are 
accompanied by the following information on the payee:  

(a) 

(b) 

the name of the payee; and 

the  payee's  account  number,  where  such  an  account  is  used  to  process  the 
transaction, or a unique transaction identifier where no such account is used for 
that purpose. 

Before transferring the funds, the payment service provider of the payer shall verify 
the  accuracy  of  the  information  referred  in  paragraph  1  on  the  basis  of  documents, 
data or information obtained from a reliable and independent source. 

Where funds are transferred from the payer's account, the verification referred to in 
paragraph 3 shall be deemed to have taken place in the following cases:  

(a)  where  a  payer’s  identity  has  been  verified  in  connection  with  the  opening  of 
the  account  in  accordance  with  Article  11  of  Directive  [xxxx/yyyy]and  the 
information  obtained  by  this  verification  has  been  stored  in  accordance  with 
Article 39 of that Directive ; 

or 

(b)  where Article 12(5) of Directive [xxxx/yyyy] applies to the payer. 

However, by way of derogation from paragraph 3, in the case of transfers of funds 
not made from an account, the payment service provider of the payer shall not verify 
the information referred to in paragraph 1 if the amount does not exceed EUR 1 000 

3. 

4. 

5. 

EN 

14 

   EN 

 
 
 
1. 

2. 

1. 

2. 

and it does not appear to be linked to other transfers of funds which, together with 
the transfer in question, exceed EUR 1 000. 

Article 5  

Transfers of funds within the Union 

By  way  of  derogation  from  Article  4(1)  and  (2),  where  the  payment  service 
provider(s)  of  both  the  payer  and  the  payee  are  established  in  the  Union,  only  the 
account number of the payer or his unique transaction identifier shall be provided at 
the time of the transfer of funds. 

Notwithstanding paragraph 1, the payment service provider of the payer shall, upon 
request from the payment service provider of the payee or the intermediary payment 
service  provider,  make  available  the  information  on  the  payer  or  the  payee  in 
accordance with Article 4, within three working days of receiving that request. 

Article 6 

Transfers of funds to outside the Union 

In  the  case  of  batch  file  transfers  from  a  single  payer  where  the  payment  service 
providers of the payees are established outside the Union, Article 4(1) and (2) shall 
not apply to the individual transfers bundled together therein, provided that the batch 
file  contains  the  information  referred  to  in  that  Article  and  that  the  individual 
transfers carry the account number of the payer or his unique transaction identifier. 

By way of derogation from Article 4(1) and (2), where the payment service provider 
of the payee is established outside the Union, transfers of funds amounting to EUR 1 
000 or less shall be accompanied only by: 

(a) 

(b) 

(c) 

the name of the payer; 

the name of the payee;  

the account number of both the payer and the payee or the unique transaction 
identifier. 

This  information  need  not  be  verified  for  accuracy,  unless  there  is  a  suspicion  of 
money laundering or terrorist financing. 

SECTION 2 

OBLIGATIONS ON THE PAYMENT SERVICE PROVIDER OF THE PAYEE 

Article 7 

Detection of missing information on the payer and the payee 

1. 

The payment service provider of the payee shall detect whether the fields relating to 
the information on the payer and the payee in the messaging system or the payment 
and settlement system used to effect the transfer of funds, have been filled in using 
the characters or inputs admissible within the conventions of that system.  

EN 

15 

   EN 

 
 
 
 
2. 

The payment service provider of the payee shall have effective procedures in place in 
order  to  detect  whether  the  following  information  on  the  payer  and  the  payee  is 
missing: 

(a) 

(b) 

for  transfers  of  funds  where  the  payment  service  provider  of  the  payer  is 
established in the Union, the information required under Article 5; 

for  transfers  of  funds  where  the  payment  service  provider  of  the  payer  is 
established  outside  the  Union,  the  information  on  the  payer  and  the  payee 
referred  to  in  Article  4(1)  and  (2)  and  where  applicable,  the  information 
required under Article 14; 

3. 

4. 

1. 

2. 

and 

(c) 

for  batch  file  transfers  where  the  payment  service  provider  of  the  payer  is 
established outside the Union the information referred to in Article 4(1) and (2) 
in respect of the batch file transfer. 

For  transfers  of  funds  amounting  to  more  than  EUR  1  000,  where  the  payment 
service  provider  of  the  payer  is  established  outside  the  Union,  the  payment  service 
provider of the payee shall verify the identity of the payee if his or her identity has 
not already been verified.  

For transfers amounting to EUR 1 000 or less, where the payment service provider of 
the payer is established outside the Union, the payment service provider of the payee 
need not verify the information pertaining to the payee, unless there is a suspicion of 
money laundering or terrorist financing. 

Article 8 

Transfers of funds with missing or incomplete information on the payer and the payee 

The  payment  service  provider  of  the  payee  shall  establish  effective  risk-based 
procedures  for  determining  when  to  execute,  reject  or  suspend  a  transfer  of  funds 
lacking  the  required  payer  and  payee  information  and  the  appropriate  follow  up 
action. 

If  the  payment  service  provider  of  the  payee  becomes  aware,  when  receiving 
transfers  of  funds,  that  information  on  the  payer  and  the  payee  required  under 
Articles  4(1)  and  (2),  5(1)  and  6  is  missing  or  incomplete,  it  shall  either  reject  the 
transfer or ask for complete information on the payer and the payee.  

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.  

EN 

16 

   EN 

 
Article 9 

Assessment and Reporting 

The payment service provider of the payee shall consider missing or incomplete information 
on  the  payer  and  the  payee  as  a  factor  in  assessing  whether  the  transfer  of  funds,  or  any 
related transaction, is suspicious, and whether it must be reported to the Financial Intelligence 
Unit. 

SECTION 3 

OBLIGATIONS ON INTERMEDIARY PAYMENT SERVICE PROVIDERS 

Article 10 

Keeping information on the payer and the payee with the transfer 

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

1. 

2. 

Article 11 

Detection of missing information on the payer and the payee 

The intermediary payment service provider shall detect whether the fields relating to 
the information on the payer and the payee in the messaging system or the payment 
and settlement system used to effect the transfer of funds, have been filled in using 
the characters or inputs admissible within the conventions of that system. 

The intermediary payment service provider shall have effective procedures in place 
in  order  to  detect  whether  the  following  information  on  the  payer  and  the  payee  is 
missing: 

(a) 

(b) 

for  transfers  of  funds  where  the  payment  service  provider  of  the  payer  is 
established in the Union, the information required under Article 5; 

for  transfers  of  funds  where  the  payment  service  provider  of  the  payer  is 
established  outside  the  Union,  the  information  on  the  payer  and  the  payee 
referred  to  in  Article  4(1)  and  (2)  or,  where  applicable,  the  information 
required under Article 14; 

and 

(c) 

for  batch  file  transfers,  where  the  payment  service  provider  of  the  payer  is 
established  outside  the  Union,  the  information  referred  to  in  Article  4(1)  and 
(2) in respect of the batch file transfer. 

Article 12 

Transfers of funds with missing or incomplete information on the payer and the payee 

1. 

The  intermediary  payment  service  provider  shall  establish  effective  risk-based 
procedures  for  determining  when  to  execute,  reject  or  suspend  a  transfer  of  funds 
lacking  the  required  payer  and  payee  information  and  the  appropriate  follow  up 
action. 

EN 

17 

   EN 

 
 
 
 
2. 

If  the  intermediary  payment  service  provider  becomes  aware,  when  receiving 
transfers  of  funds,  that  information  on  the  payer  and  the  payee  required  under 
Articles  4(1)  and  (2),  5(1)  and  6  is  missing  or  incomplete,  it  shall  either  reject  the 
transfer or ask for complete information on the payer and the payee.  

Where a payment service provider regularly fails to supply the required information 
on the payer, the intermediary payment service provider 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  intermediary  payment  service  provider  shall  report  that  fact  to  the  authorities 
responsible for combating money laundering or terrorist financing.  

Article 13 

Assessment and Reporting 

The intermediary payment service provider shall consider missing or incomplete information 
on  the  payer  and  the  payee  as  a  factor  in  assessing  whether  the  transfer  of  funds,  or  any 
related transaction, is suspicious, and whether it must be reported to the Financial Intelligence 
Unit.  

Article 14 

Technical limitations  

1. 

2. 

3. 

4. 

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

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. 

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. 

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. 

EN 

18 

   EN 

 
 
CHAPTER III 

COOPERATION AND RECORD KEEPING  

Article 15  

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 
established, to enquiries from the authorities responsible for combating money laundering or 
terrorist  financing  of  that  Member  State  concerning  the  information  required  under  this 
Regulation.  

Article 16 

Record keeping  

The  payment  service  provider  of  the  payer  and  the  payment  service  provider  of  the  payee 
shall keep records of the information referred to in Articles 4, 5, 6 and 7 for five years. In the 
cases  referred  to  in  Article  14(2)  and  (3),  the  intermediary  payment  service  provider  must 
keep records of all information received for five years. Upon expiry of this period, personal 
data  must  be  deleted,  unless  otherwise  provided  for  by  national  law,  which  shall  determine 
under  which  circumstances  payment  service  providers  may  or  shall  further  retain  data. 
Member  States  may  allow  or  require  further  retention  only  if  necessary  for  the  prevention, 
detection  or  investigation  of  money  laundering  and  terrorist  financing.  The  maximum 
retention period following carrying-out of the transfer of funds shall not exceed ten years.  

CHAPTER IV 

SANCTIONS AND MONITORING 

Article 17 

Sanctions 

1. 

2. 

3. 

Member  States  shall  lay  down  the  rules  on  administrative  measures  and  sanctions 
applicable to breaches of the provisions of this Regulation and shall take all measures 
necessary to ensure that they are implemented. The sanctions  provided for must be 
effective, proportionate and dissuasive.  

Member States shall ensure that where obligations apply to payment services providers, 
in case of a breach sanctions may be applied to the members of the management body 
and to any other individuals who under national law are responsible for the breach. 

By [24 months after entry into force of this Regulation] Member States shall notify 
the rules referred to in paragraph 1 to the Commission and to the Joint Committee of 
the  EBA,  EIOPA  and  ESMA.  They  shall  notify  the  Commission  and  the  Joint 

EN 

19 

   EN 

 
 
Committee  of  the  EBA,  EIOPA  and  ESMA  without  delay  of  any  subsequent 
amendment thereto. 

4. 

Competent authorities shall have all investigatory powers that are necessary for the 
exercise  of  their  functions.  In  the  exercise  of  their  sanctioning  powers,  competent 
authorities shall cooperate closely to ensure that sanctions or measures produce the 
desired results and coordinate their action when dealing with cross border cases.  

Article 18 

Specific provisions 

1. 

This Article shall apply to the following breaches: 

(a) 

(b) 

(c) 

repeated  non-inclusion  of  required  information  on  the  payer  and  payee,  in 
breach of Articles 4, 5 and 6; 

serious  failure  of  payment  service  providers  to  ensure  record  keeping  in 
conformity with Article 16;  

failure  of  the  payment  service  provider  to  put  in  place  effective  risk-based 
policies and procedures required under Articles 8 and 12. 

2. 

In  the  cases  referred  to  in  paragraph  1,  administrative  measures  and  sanctions  that 
can be applied include at least the following:  

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

a public statement which indicates the natural or legal person and the nature of 
the breach; 

an order requiring the natural or legal person to cease the conduct and to desist 
from a repetition of that conduct; 

in  case  of  a  payment  service  provider,  withdrawal  of  the  authorisation  of  the 
provider; 

a  temporary  ban  against  any  member  of  the  payment  service  provider's 
management  body  or  any  other  natural  person,  who  is  held  responsible,  to 
exercise functions with the payment service provider; 

in case of a legal person, administrative pecuniary sanctions of up to 10 % of 
the  total  annual  turnover  of  that  legal  person  in  the  preceding  business  year; 
where the legal person is a subsidiary of a parent undertaking, the relevant total 
annual  turnover  shall  be  the  total  annual  turnover  resulting  from  the 
consolidated  account  of  the  ultimate  parent  undertaking  in  the  preceding 
business year; 

in case of a natural person, administrative pecuniary sanctions of up to EUR 5 
000 000, or in the Member States where the Euro is not the official currency, 
the corresponding value in the national currency on the date of entry into force 
of this Regulation; 

(g) 

administrative  pecuniary  sanctions  of  up  to  twice  the  amount  of  the  profits 
gained or losses avoided because of the breach where those can be determined. 

EN 

20 

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Article 19 

Publication of sanctions 

Administrative  sanctions  and  measures  imposed  in  the  cases  referred  to  in  Articles  17  and 
18(1) shall be published without undue delay including information on the type and nature of 
the  breach  and  the  identity  of  persons  responsible  for  it,  unless  such  publication  would 
seriously jeopardise the stability of financial markets.  

Where publication would cause a disproportionate damage to the parties involved, competent 
authorities shall publish the sanctions on an anonymous basis. 

Article 20 

Application of sanctions by the competent authorities 

When  determining  the  type  of  administrative  sanctions  or  measures  and  the  level  of 
administrative  pecuniary  sanctions,  the  competent  authorities  shall  take  into  account  all 
relevant circumstances, including: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

the gravity and the duration of the breach; 

the degree of responsibility of the responsible natural or legal person;  

the  financial strength of the responsible  natural or legal person, as indicated by the 
total turnover of the responsible legal person or the annual income of the responsible 
natural person; 

the importance of profits gained or losses avoided by the responsible natural or legal 
person, insofar as they can be determined; 

the losses for third parties caused by the breach, insofar as they can be determined; 

the level of cooperation of the responsible natural or legal person with the competent 
authority; 

(g) 

previous breaches by the responsible natural or legal person. 

Article 21 

Reporting of breaches 

1. 

2. 

Member States shall establish effective mechanisms to encourage reporting of breaches 
of the provisions of this Regulation to competent authorities. 

The mechanisms referred to in paragraph 1 shall include at least: 

(a) 

(b) 

specific procedures for the receipt of reports on breaches and their follow-up;  

appropriate protection for persons who report potential or actual breaches; 

(c)  protection  of  personal  data  concerning  both  the  person  who  reports  the 
breaches  and  the  natural  person  who  is  allegedly  responsible  for  a  breach,  in 
compliance with the principles laid down in Directive 95/46/EC. 

3. 

The payment service providers shall establish appropriate procedures for their employees 
to report breaches internally through a specific channel. 

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Article 22 

Monitoring 

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. 

1. 

2. 

1. 

CHAPTER V 

IMPLEMENTING POWERS 

Article 23 

Committee procedure 

The  Commission  shall  be  assisted  by  the  Committee  on  the  Prevention  of  Money 
Laundering and Terrorist Financing, hereinafter referred to as ‘the Committee’. The 
Committee  shall  be  a  committee  within  the  meaning  of  Regulation  (EU)  No 
182/2011. 

Where  reference  is  made  to  this  paragraph,  Article  5  of  Regulation  (EU)  No 
182/2011 shall apply. 

CHAPTER VI 

DEROGATIONS 

Article 24 

Agreements with territories or countries mentioned in Article 355 of the Treaty 

The  Commission  may  authorise  any  Member  State  to  conclude  agreements  with  a 
country or territory which does not form part of the territory of the Union mentioned 
in Article 355 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 all the following conditions are met: 

(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 Union 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. 

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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 notify the requesting Member State accordingly within one month 
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 23(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 18 months of receipt of the application by the Commission. 

CHAPTER VII 

FINAL PROVISIONS 

Article 25 

Repeal 

Regulation (EC) No 1781/2006 is repealed. 

References to the repealed Regulation shall be construed as references to this Regulation and 
shall be read in accordance with the correlation table in the Annex. 

Article 26 

Entry into force 

This Regulation shall enter into force on the 20th day following that of its publication in the 
Official Journal of the European Union. 

It shall apply from [coincide with the date of transposition of Directive xxxx/yyyy]. 

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

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Done at Strasbourg, 

For the European Parliament 
The President 

For the Council 
The President 

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Correlation table referred to in Article 25. 

ANNEX  

Regulation (EC) No 1781/2006 

This Regulation  

Article 1 

Article 2 

Article 3 

Article 4 

Article 5 

Article 6 

Article 7  

Article 8 

Article 9 

Article 10 

Article 11 

Article 12  

Article 13 

Article 14  

Article 15 

Article 16 

Article 17 

Article 18 

Article 19 

Article 20 

Article 1 

Article 2 

Article 3 

Article 4(1) 

Article 4 

Article 5 

Article 7 

Article 7 

Article 8 

Article 9 

Article 16 

Article 10 

Article 11 

Article 12 

Article 13 

Article 14 

Article 15 

Articles 17 to 22 

Article 23 

Article 24 

- 

- 

Article 25 

Article 26 

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EN 

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