About a month ago i wrote a post What Is FATF & How Will It Impact My Payments? It provides an overview of the the FATF Recommendations and the impact on MT101 payments into Europe. The post triggered A LOT of emails, and so in this post i thought i would recap as simply as i could what changes to MT101 wire payments the FATF Recommendations will require. So here goes in 251 words…
1. FATF – Financial Action Task Force
Is all about combating money laundering, terrorist financing and other dangers to the financial system
2. FATF Recommendations
Are 40 recommendations that are recognised globally as the international standard for anti money laundering (AML) and countering the financing of terrorism (CFT)
3. FATF Recommendation 16
States that financial institutions should include accurate originator and beneficiary information on wire transfers
4. EU Regulation 2015/847
EU Regulation 2015/847, published on 20th May, 2015 are the EU rules around payer and payee information on wire transfers, which correspdon with the FATF Recommendations
5. Required Payer & Payer Information (Article 4)
Required payer (person paying) Information:
a.) Name of the Payer
b.) Payers payment account number
c.) Payers address OR Official personal document number OR Customer Identification Number OR Date and place of birth
Required payee (person being paid) Information:
d.) Name of the payee
e.) Payees account number
6. Payments / Funds Transfers Within the EU (Article 5)
If the amount is:
- Over EUR 1000 – a.), b.) c.) d.) e.) are all required
- Less than EUR 1000 – a.) b.) d.) e.)
7. Payments / Fund Transfers Outside of the EU (Article 6)
If the amount is:
- Over EUR 1000 – a.), b.) d.) e.) are all required
- Less than EUR 1000 – a.), b.) d.) e.) are all required — I need to check this…!
8. Obligations on the Payment Service Providers
Banks needs to check and monitor in real time that payments adhere to the above rules. If the payments are not compliant the bank should either request the missing information, reject or suspend the payment transfer
9. Record Retention
Payment information should be retained for 5 years
10. FATF Recommendation: EU Deadline
26th June, 2017!