United Kingdom

The 2017 Regulations establish obligations for preventing the use of the financial system for money laundering and terrorist financing. They require relevant persons, including financial institutions and payment service providers, to apply risk-based measures for customer due diligence, record-keeping, internal controls, and the reporting of suspicious activity. A key component is the regulation of information accompanying transfers of funds to ensure transparency and traceability of payer and payee data.

Requirements for Payment Service Providers

Part 7 of the Regulations governs transfers of funds and mandates that payment service providers include specific information about the payer and payee when processing wire transfers. The sending payment service provider must ensure that the transfer includes the payer name, account number, and either their address, official personal document number, customer identification number, or date and place of birth. The payee name and account number must also be included.

Obligations for Intermediary & Payee PSPs

Intermediary payment service providers are required to ensure that the information received with the transfer is retained and transmitted unchanged. If technical constraints prevent full transmission, they must ensure that the data is traceable. Receiving payment service providers must detect whether information on the payer or the payee is missing or incomplete, and take appropriate measures to either obtain it or reject the transfer, depending on the circumstances.

Verification & Record-Keeping

Payment service providers must verify the accuracy of payer and payee information using reliable and independent sources before execution of the transfer. They must keep records of all relevant information and any measures taken to detect and handle non-compliance for at least five years. Records must be made available to the appropriate supervisory authorities upon request.

Risk-Based Monitoring & Compliance Controls

The Regulations require firms to adopt a risk-based approach to ensure that controls and monitoring are proportionate to the level of risk presented by their customers and transactions. Firms must implement internal policies, procedures, and training to prevent and detect money laundering through fund transfers. This includes ongoing monitoring and escalation procedures where irregularities are detected.

Enforcement & Penalties

The Regulations grant powers to supervisory authorities to monitor compliance, conduct inspections, and impose sanctions for breaches. Enforcement actions may include warnings, fines, suspension of activities, or criminal prosecution depending on the severity of the violation.

Conclusion: WTR Compliance Integration

The 2017 Regulations create a structured and detailed framework for ensuring that transfers of funds within and outside the UK financial system are accompanied by sufficient information to identify both parties. This transparency is critical for preventing the misuse of payment systems for illicit purposes and forms a central pillar of the UK's anti-money laundering regime.