Information you must send with a transfer of funds to prevent money laundering
Find out what information you must send with a transfer of funds if you’re a payment service provider.
Overview
You’re classed as a ‘payment service provider’ if your business provides transfer of funds services within the EU.
Businesses that transfer money (money transmitters) must follow the EU Funds Transfer Regulation in order to reduce the risk of money laundering and terrorist financing. You must also comply with the Money Laundering Regulations.
The EU Funds Transfer Regulation
The regulation specifies what information you must send with a transfer of funds in relation to the:
- payer - the person transferring the funds
- payee - the person receiving the funds
A ‘transfer of funds’ is any transfer made through a money transmitter to make funds available at another money transmitter, where at some stage the money is moved electronically. For example, this could be by bank transfer, email or fax.
The payer can transfer funds from one bank account to another, or they can give the funds to the money transmitter in cash, by cheque or by debit or credit card.
The funds can then be transferred electronically using Society for Worldwide Interbank Financial Telecommunications (SWIFT) or transmitted in another way.
When a money transmitter transfers funds, they must send ‘complete information’ about the payer and payee with the transfer. This allows payments to be traced if necessary.
What information you must send
When you make or receive any transfer of funds, the EU legislation states that you must have ‘complete information’ about the payer and payee and send this along with the transfer of funds. It explains what is classed as complete information.
This applies to all transfers of funds in any currency.
Payer
Complete information about the payer must include their:
- name
- full postal address, including postcode
- account number or a unique identifier which will allow the transaction to be traced back to them
If you do not have the payer’s full postal address, you can include either their:
- date and place of birth
- customer identification number
- national identity number, for example, a passport number
Payee
Complete information about the payee must include their:
- name
- account number or a unique identifier which will allow the transaction to be traced back to them
Verifying the information of payers and payees
In some cases, you may need to verify the complete information. You must do this using documents, data or information from a reliable and independent source such as:
- a passport
- a photocard driving licence
- documents issued by a government department
When you must verify information
As a payment service provider, you must verify the complete information of a payer or a payee if either:
- the transfer value is €1,000 or more
- any part of the transfer is funded by cash or anonymous e-money
Linked transactions
If there are multiple transactions of less than €1,000 which appear to be linked, you must check how much the linked transactions add up to. If they add up to €1,000 or more, you must verify the complete information of the payer or payee.
Regular transfers or business relationships
You’ll need to verify the complete information of a payer if you’re to handle transfers for them on a regular basis or you develop a ‘business relationship’.
Once you’ve verified the complete information of the payer, you do not have to do so for every transaction. You’ll need to verify it at regular intervals instead. How often you do this is up to you, as it depends on your assessment of the risk.
When to reject a transfer
If you’re acting as a payment service provider for a payee, it’s your responsibility to ensure you receive the complete information about the payer along with the transfer from their payment service provider. If you do not, you should consider rejecting the transfer.
If you deal regularly with a payment service provider that fails to send the complete information about the payer, you should consider warning them that you may reject future transfers or set a deadline by which you must receive it.
Penalties for non-compliance
If you do not comply with the EU Funds Transfer Regulation, HMRC can issue you with a penalty.
When HMRC visits your business, officers will check that you’re complying with these regulations.
Contact HMRC
If you need more information on the EU Funds Transfer Regulation, or you have any questions about how to comply, you can contact HMRC.
Updates to this page
Last updated 14 September 2017 + show all updates
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This guidance has been updated to reflect the 'Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017' which came into effect from 26 June 2017, replacing the EU Payments Regulation.
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First published.