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20 November 2017 Supervision Supervision label Factsheet

The provisions of the Wire Transfer Regulation 2 (WTR2) on the traceability of transfers of funds are a valuable tool in the prevention, detection and investigation of money laundering and terrorist financing.

Background to WTR2

On 26 June 2017, Regulation (EU) 2015/847 on information accompanying transfers of funds entered into force. It replaces WTR1, or Regulation (EC) No 1781/2006. The aim of WTR1 and WTR2 is to improve the traceability of information accompanying transfers of funds in order to contribute to the prevention, detection and investigation of money laundering and terrorist financing.

WTR1 contained obligations regarding the recording of information on the payer in transfers of funds. Under WTR2, these obligations are expanded, in essence, to include the recording of information on the payee. This page provides a brief summary of WTR2.

Scope of application

WTR2 applies to transfers of funds which are sent or received by a payment service provider or an intermediary payment service provider established in the European Union (Article 2). While the Regulation has a broad scope of application, a number of specific exemptions apply to e.g. credit and debit cards, electronic money transfers and transfers effected with a mobile phone or other digital or IT device.

Obligations of payment service providers and intermediary payment service providers

Chapter II of WTR2 is divided into two sections, Section 1 addressing the obligations of the payment service provider of the payer and Section 2 addressing the obligations of the payment service provider of the payee. Briefly put, the payment service provider of the payer is responsible for adequate recording of information, while the payment service provider of the payee must check whether the information received is complete. Article 4 describes which information must be recorded and sent with the funds transfer. The information to be provided depends on whether the transfer is effected within, from or to the European Union. The intermediary payment service provider must ensure that all information about the payer and the payee is retained and included with the transfer.

Detecting and assessing missing or incomplete information

The payment service provider of the payee must have risk-based procedures in place to determine whether the information received is complete (Article 8). If the information is found to be incomplete, the payment service provider of the payee must suspend or reject the transfer, depending on which information is missing. Intermediary payment service providers are subject to specific rules (see Articles 10, 11 and 12), depending on whether the transfer is effected within, from or to the European Union. The European Banking Authority (EBA) has issued Guidelines on this topic.

EBA Guidelines

On 22 September 2017, the European supervisory authorities (EBA, EIOPA and ESMA) issued Joint Guidelines on WTR2. The document provides guidance on the procedures that financial institutions must have in place in order to deal with missing information on the payer or the payee in transfers of funds. The Joint Guidelines entered into effect in the Netherlands on 16 July 2018.

Notifications to FIU-the Netherlands

If information on the payer or payee is missing, this may be a reason to notify the Financial Intelligence Unit (FIU-the Netherlands) of an unusual transaction. This applies to both payment service providers and intermediary payment service providers (Articles 9 and 13). The Joint Guidelines list a number of additional indicators that may be relevant here, such as transfers to and from high-risk countries, transfers exceeding a specific value threshold or transfers where the name of the payer or payee is missing. See item 30 of the Joint Guidelines for more information.

Integrity supervision under the Wwft

The obligations of WTR2 must be viewed in the context of the obligations under the Anti-Money Laundering and Anti-Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme – Wwft). Financial institutions must integrate the WTR2 obligations into their operational procedures. In our supervision of financial institutions, we monitor these institutions' compliance with the obligations ensuing from the Wwft.

Relevant to:

  • Banks
  • Crypto service providers
  • Electronic money institutions