PRESS RELEASE 26 March 2007
COMMISSION PUBLISHES DRAFT REQUIREMENTS TO IMPLEMENT FATF RECOMMENDATION ON WIRE TRANSFERS
The Commission has today published details of draft requirements to implement Financial Action Task Force (“FATF”) Special Recommendation VII (“SR VII”) on wire transfers.
SR VII establishes requirements for information to accompany payments that are made electronically (“transfers”). Obligations are placed on the payment service provider of the customer requesting that a transfer be made (referred to as the “payer”), the payment service provider of the person that is to receive the transfer (referred to as the “payee”) and on any intermediate payment service providers (such as correspondent banks).
The European Union (“EU”) has already issued a Regulation implementing SR VII - Regulation (EC) No 1781/2006 of the European Parliament and of the Council on information on the payer accompanying transfers of funds (“EU Payments Regulation”) - which has had direct effect in EU Member States since 1 January 2007.
The EU Payments Regulation permits Member States to treat transfers both within and between States as domestic transfers. Transfers made between a Member State and any other jurisdiction, including Jersey, must be treated as cross-border transfers.
Notwithstanding this, Article 17(1) of the EU Payments Regulation permits a Member State to apply to the European Commission (“EC”) to be able to treat transfers to and from its dependent territories as transfers within that Member State. The United Kingdom (“UK”) has made an application in respect of each of the Crown Dependencies – so that transfers between the UK and Crown Dependencies may be treated as domestic transfers (but not transfers between other Member States and the Crown Dependencies – which will be treated as cross-border).
The EC may approve the UK’s application in respect of Jersey (and the other Crown Dependencies) only if it is satisfied that Jersey payment service providers are required to apply the “same rules” as those established in the EU Payments Regulation.
The draft requirements published today are intended to apply such rules, in order that transfers between the UK and Jersey may continue to be made cheaply and quickly using UK payment systems, including BACS . Without such rules, the use of BACS for making transfers between Jersey and the UK will be limited.
Similar legislation is to be introduced in the Bailiwick of Guernsey and the Isle of Man.
The draft requirements have already been the subject of an extensive period of consultation with the Jersey Bankers’ Association. They have also been discussed with Her Majesty’s Treasury in the UK.
Given the above, the limited discretion available to the Island in implementing SR VII, and the EC’s request for further information to support the UK’s application under Article 17(1) of the EU Payments Regulation, it is not practicable to consult any further on the draft requirements.
The draft requirements to implement SR VII on wire transfers are set out in Position Paper No. 1 2007, which can be obtained by clicking here or from the reception desk at its offices at Nelson House, David Place, St Helier.
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For further information please contact: -
Andrew Le Brun,
Director, International & Policy Division
Jersey Financial Services Commission
Tel: + 44 (0) 1534 822065
Fax: + 44 (0) 1534 82001
Notes to Editors.
1. Though SR VII was published in October 2001 – in response to events in the United States on 11 September of that year - an Interpretative Note setting out how the Recommendation should be implemented was not finalised until June 2005. The Interpretative Note requires FATF member states to implement SR VII by 1 January 2007.
2. In considering the UK’s application made under Article 17(1) of the EU Payments Regulation, the EC has requested further information (which is likely to include the draft requirements). On this basis, implementation in Jersey has been delayed – so that any changes that may be required can be incorporated into the legislation before it is lodged for debate by the States.