How the Money Laundering Regulations 2007 are affected by the EU Payments Regulation

UK firms governed by the Money Laundering Regulations 2007 who operate as payment service providers (PSPs) also fall within the remit of the EU Payments Regulation 2007, also referred to as the EU Wire Transfer Regulation. This became part of UK law with The Transfer of Funds (Information on the Payer) Regulations 2007, the central effect of which is to further develop the requirement for due diligence, or to 'know your client', for firms involved in money transfer through systems such as SWIFT, BACS or CHAPS.

PSPs are now required to ensure that complete information on the payer travels with each payment. This duty falls on the PSP acting for the payer, on the PSP acting for the payee, and also on any intermediate PSPs involved in the transaction. Within a firm in the Regulated sector, this duty is likely to fall to the money laundering reporting officer (MLRO).

For this information to be complete, it should comprise the payer's name, and sufficient information to identify the transaction (such as an account number) and to identify the payer (such as an address or client identification number). It should also be verified on all transactions worth more than €1,000, and on groups of transactions above that value that appear to be linked. HMRC guidelines suggest that it is wise to verify this information for any first-time client.

PSPs acting on behalf of payees who do not receive full payer information are advised to demand it, and to consider rejecting the payment. If such failure leads a payee's PSP to suspect money laundering activity, a suspicious activity report could be filed with the firm's MLRO.

Records of the transfer and of the associated payer information should be stored for five years.

Investigations by HMRC into PSPs will examine the firm's compliance with all anti-money laundering law within its powers, including the EU Payments Regulation. It is therefore highly advisable that the MLRO of any firm acting in this area of the Regulated sector ensures that training has been undertaken by all relevant members of the firm to ensure they perform appropriately.

The Money Laundering Regulations 2007 and beyond
If it is important for an MLRO to be up to date with current anti-money laundering legislation and the duties it imposes on a firm in the Regulated sector, it is vital for a company offering training in this field to be so. At ML Solutions 4U, we pay very close attention to developments in this area of the law, to ensure that our workshops and courses are immediately relevant to the full range of current and foreseeable regulations.

For more details on our seminars or online instruction, please telephone 0845 402 0001 or complete the enquiry form. A representative will be happy to discuss your business needs regarding any aspect of money laundering training.

Money Laundering Information » EU Payments Regulation and Money Laundering Regulations 2007