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Statutory Instruments
FINANCIAL SERVICES
Made
22nd November 2007
Laid before Parliament
23rd November 2007
Coming into force
15th December 2007
The Treasury are a government department designated M1 for the purposes of section 2(2) of the European Communities Act 1972 M2 in relation to the prevention of money laundering and terrorist financing;
The Treasury, in exercise of the powers conferred on them by section 2(2) of the European Communities Act 1972 and by sections 168(4)(b), 402(1)(b), 417(1) M3 and 428(3) of the Financial Services and Markets Act 2000 M4, make the following Regulations:
Marginal Citations
M21972 c. 68; section 2(2) was amended by section 27 of the Legislative and Regulatory Reform Act 2006 (c.51). By virtue of the amendment of section 1(2) made by section 1 of the European Economic Area Act 1993 (c.51) regulations may be made under section 2(2) to implement obligations of the United Kingdom created by or arising under the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 (Cm 2073, OJ No L 1, 3.11.1994, p. 3) and the Protocol adjusting that Agreement signed at Brussels on 17th March 1993 (Cm 2183, OJ No L 1, 3.1.1994, p.572).
M3See the definition of “prescribed”.
1.—(1) These Regulations may be cited as the Transfer of Funds (Information on the Payer) Regulations 2007 and come into force on 15th December 2007.
(2) These Regulations are prescribed for the purposes of sections 168(4)(b) (appointment of persons to carry out investigations in particular cases) and 402(1)(b) (power of the Authority to institute proceedings for certain other offences) of the 2000 Act.
2.—(1) In these Regulations—
“the 2000 Act” means the Financial Services and Markets Act 2000;
“authorised person” means a person who is authorised for the purposes of the 2000 Act M5;
“the Authority” means the Financial Services Authority;
“the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;
“money laundering” means an act which falls within section 340(11) of the Proceeds of Crime Act 2002 M6;
“notice” means a notice in writing;
“the payments regulation” means Regulation 1781/2006/EC of the European Parliament and of the Council of 15th November 2006 M7 on information on the payer accompanying transfers of funds;
“supervisory authority” in relation to any payment service provider means the supervisory authority specified for such a payment service provider by regulation 3;
“terrorist financing” means an offence under—
section 15 (fund-raising), 16 (use and possession), 17 (funding arrangements), 18 (money laundering) or 63 (terrorist finance: jurisdiction) of the Terrorism Act 2000;
paragraph 7(2) or (3) of Schedule 3 to the Anti-Terrorism, Crime and Security Act 2001 M8 (freezing orders);
article 10, 11, 12, 13, 14 or 16 of the Terrorism (United Nations Measures) Order 2009;]
(2) Unless otherwise defined, expressions used in these Regulations and the payments regulation have the same meaning as in the payments regulation.
(3) References in these Regulations to numbered Articles are references to Articles of the payments regulation.
Textual Amendments
F1Word in reg. 2(1) deleted (10.8.2009) by The Terrorism (United Nations Measures) Order (Consequential Amendments) Regulations 2009 (S.I. 2009/1912), regs. 1, 3(a)
F2Words in reg. 2(1) inserted (10.8.2009) by The Terrorism (United Nations Measures) Order (Consequential Amendments) Regulations 2009 (S.I. 2009/1912), regs. 1, 3(b)
Marginal Citations
M5See section 31(1).
M7OJ No L 345, 8.12.2006, p. 1.
3.—(1) The Authority is the supervisory authority for payment service providers who are authorised persons.
(2) The Commissioners are the supervisory authority for payment service providers who are not authorised persons.
4.—(1) A supervisory authority must effectively monitor the payment service providers for whom it is the supervisory authority and take necessary measures for the purpose of securing compliance by such payment service providers with the requirements of the payments regulation.
(2) A supervisory authority which, in the course of carrying out any of its functions under these Regulations, knows or suspects that a payment service provider is or has engaged in money laundering or terrorist financing must promptly inform the Serious Organised Crime Agency.
(3) A disclosure made under paragraph (2) is not to be taken to breach any restriction, however imposed, on the disclosure of information.
(4) The functions of the Authority under these Regulations shall be treated for the purposes of Parts 1, 2 and 4 of Schedule 1 to the 2000 Act (the Financial Services Authority) as functions conferred on the Authority under that Act.
5.—(1) The Authority and the Commissioners may impose charges on payment service providers supervised by them.
(2) Charges levied under paragraph (1) must not exceed such amount as the Authority or the Commissioners (as the case may be) consider will enable them to meet any expenses reasonably incurred by them in carrying out their functions under these Regulations or for any incidental purpose.
(3) Without prejudice to the generality of paragraph (2), a charge may be levied in respect of each of the premises at which a payment service provider carries on (or proposes to carry on) business.
(4) The Authority must apply amounts paid to it by way of penalties imposed under regulation 11 towards expenses incurred in carrying out its functions under these Regulations or for any incidental purpose.
6. In this Part—
“officer”, except in regulations 10(3) and 16, means—
an officer of the Authority, including a member of the Authority's staff or an agent of the Authority; or
an officer of Revenue and Customs;
“recorded information” includes information recorded in any form and any document of any nature.
7.—(1) An officer may, by notice to a payment service provider or to a person connected with a payment service provider, require the payment service provider or the connected person, as the case may be—
(a)to provide such information as may be specified in the notice;
(b)to produce such recorded information as may be so specified; or
(c)to attend before an officer at a time and place specified in the notice and answer questions.
(2) For the purposes of paragraph (1), a person is connected with a payment service provider if he is, or has at any time been, in relation to the payment service provider, a person listed in Schedule 1 to these Regulations.
(3) An officer may exercise powers under this regulation only if the information sought to be obtained as a result is reasonably required in connection with the exercise by the supervisory authority for which he acts of its functions under these Regulations.
(4) Where an officer requires information to be provided or produced pursuant to paragraph (1)(a) or (b)—
(a)the notice must set out the reasons why the officer requires the information to be provided or produced; and
(b)such information must be provided or produced—
(i)before the end of such reasonable period as may be specified in the notice; and
(ii)at such place as may be so specified.
(5) In relation to information recorded otherwise than in legible form, the power to require production of it includes a power to require the production of a copy of it in legible form or in a form from which it can readily be produced in visible and legible form.
(6) The production of a document does not affect any lien which a person has on the document.
(7) A person may not be required under this regulation to provide or produce information or to answer questions which that person would be entitled to refuse to provide, produce or answer on grounds of legal professional privilege in proceedings in the High Court, except that a lawyer may be required to provide the name and address of his client.
(8) Subject to paragraphs (9) and (10), a statement made by a person in compliance with a requirement imposed on that person under paragraph (1)(c) is admissible in evidence in any proceedings, so long as it also complies with any requirements governing the admissibility of evidence in the circumstances in question.
(9) In criminal proceedings in which a person is charged with an offence to which this paragraph applies—
(a)no evidence relating to the statement may be adduced; and
(b)no question relating to it may be asked,
by or on behalf of the prosecution unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.
(10) Paragraph (9) applies to any offence other than one under—
(a)section 5 of the Perjury Act 1911 M11 (false statements without oath);
(b)section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 M12 (false statements and declarations); or
(c)Article 10 of the Perjury (Northern Ireland) Order 1979 M13 (false unsworn statements).
(11) In the application of this regulation to Scotland, the reference in paragraph (7) to—
(a)proceedings in the High Court is to be read as a reference to proceedings in the Court of Session; and
(b)an entitlement on grounds of legal professional privilege is to be read as a reference to an entitlement on the grounds of confidentiality of communications—
(i)between a professional legal adviser and his client; or
(ii)made in connection with or in contemplation of legal proceedings and for the purposes of those proceedings.
8.—(1) Where an officer has reasonable cause to believe that any premises are being used by a payment service provider in connection with the payment service provider's business or professional activities, he may on producing evidence of his authority at any reasonable time—
(a)enter the premises;
(b)inspect the premises;
(c)observe the carrying on of business or professional activities by the payment service provider;
(d)inspect any recorded information found on the premises;
(e)require any person on the premises to provide an explanation of any recorded information or to state where it may be found;
(f)inspect any cash found on the premises.
(2) An officer may take copies of, or make extracts from, any recorded information found under paragraph (1).
(3) Paragraphs (1)(d) and (e) and (2) do not apply to recorded information which the payment service provider would be entitled to refuse to disclose on grounds of legal professional privilege in proceedings in the High Court, except that a lawyer may be required to provide the name and address of his client and, for this purpose, regulation 7(11) applies to this paragraph as it applies to regulation 7(7).
(4) An officer may exercise powers under this regulation only if the information sought to be obtained as a result is reasonably required in connection with the exercise by the supervisory authority for which he acts of its functions under these Regulations.
(5) In this regulation, “premises” means any premises other than premises used only as a dwelling.
9.—(1) A justice may issue a warrant under this paragraph if satisfied on information on oath given by an officer that there are reasonable grounds for believing that the first, second or third set of conditions is satisfied.
(2) The first set of conditions is—
(a)that there is on the premises specified in the warrant recorded information in relation to which a requirement could be imposed under regulation 7(1)(b); and
(b)that if such a requirement were to be imposed—
(i)it would not be complied with; or
(ii)the recorded information to which it relates would be removed, tampered with or destroyed.
(3) The second set of conditions is—
(a)that a person on whom a requirement has been imposed under regulation 7(1)(b) has failed (wholly or in part) to comply with it; and
(b)that there is on the premises specified in the warrant recorded information which has been required to be produced.
(4) The third set of conditions is—
(a)that an officer has been obstructed in the exercise of a power under regulation 8; and
(b)that there is on the premises specified in the warrant recorded information or cash which could be inspected under regulation 8(1)(d) or (f).
(5) A justice may issue a warrant under this paragraph if satisfied on information on oath given by an officer that there are reasonable grounds for suspecting that—
(a)an offence under these Regulations has been, is being or is about to be committed by a payment service provider; and
(b)there is on the premises specified in the warrant recorded information relevant to whether that offence has been, or is being or is about to be committed.
(6) A warrant issued under this regulation shall authorise an officer—
(a)to enter the premises specified in the warrant;
(b)to search the premises and take possession of any recorded information or anything appearing to be recorded information specified in the warrant or to take, in relation to any such recorded information, any other steps which may appear to be necessary for preserving it or preventing interference with it;
(c)to take copies of, or extracts from, any recorded information specified in the warrant;
(d)to require any person on the premises to provide an explanation of any recorded information appearing to be of the kind specified in the warrant or to state where it may be found;
(e)to use such force as may reasonably be necessary.
(7) Where a warrant is issued by a justice under paragraph (1) or (5) on the basis of information on oath given by an officer of the Authority, for “an officer” in paragraph (6) substitute “ a constable ”.
(8) In paragraphs (1), (5) and (7), “justice” means—
(a)in relation to England and Wales, a justice of the peace;
(b)in relation to Scotland, a justice within the meaning of section 307 of the Criminal Procedure (Scotland) Act 1995 M14 (interpretation);
(c)in relation to Northern Ireland, a lay magistrate.
(9) In the application of this regulation to Scotland, the references in paragraphs (1), (5) and (7) to information on oath are to be read as references to evidence on oath.
Marginal Citations
10.—(1) If, on an application made by a supervisory authority it appears to the court that a person (the “information defaulter”) has failed to do something that he was required to do under regulation 7(1), the court may make an order under this regulation.
(2) An order under this regulation may require the information defaulter—
(a)to do the thing that he failed to do within such period as may be specified in the order;
(b)otherwise to take such steps to remedy the consequences of the failure as may be so specified.
(3) If the information defaulter is a body corporate, a partnership or an unincorporated body of persons which is not a partnership, the order may require any officer of the body corporate, partnership or body, who is (wholly or partly) responsible for the failure to meet such costs of the application as are specified in the order.
(4) In this regulation, “court” means—
(a)in England and Wales and Northern Ireland, the High Court or the county court;
(b)in Scotland, the Court of Session or the sheriff court.
11.—(1) A supervisory authority may impose a penalty of such amount as it considers appropriate on a payment service provider in respect of any transfer of funds to which the payments regulation applies—
(a)in the case of the payment service provider of the payer, if he fails to comply with any requirement in—
(i)Article 5(1) read with Article 6(1) (information accompanying transfers of funds within the EEA);
(ii)Article 5(2) read with Article 5(3) or (4) (whichever is relevant) (verification of information);
(iii)Article 5(5) (record keeping);
(iv)Article 6(2) (information to be provided following request);
(v)Article 7(1) read with Article 7(2) (information accompanying transfers of funds from the EEA to outside the EEA);
(b)in the case of the payment service provider of the payee, if he fails to comply with any requirement in Article 8 (detection of missing information), 9(1) (transfers of funds with missing or incomplete information), 9(2) sub-paragraph 2 (reporting) or 11 (record keeping);
(c)in the case of the intermediary payment service provider, if he fails to comply with any requirement in Article 12 (keeping information on the payer with the transfer) or 13(3), (4) or (5) (use of a payment system with technical limitations);
and, for this purpose, “appropriate” means effective, proportionate and dissuasive.
(2) The supervisory authority must not impose a penalty on a person under paragraph (1) where there are reasonable grounds for it to be satisfied that the person took all reasonable steps and exercised all due diligence to ensure that the requirement would be complied with.
(3) In deciding whether a person has failed to comply with any requirement of the payments regulation, the supervisory authority must consider whether the person followed any relevant guidance which was at the time—
(a)issued by a supervisory authority or any other appropriate body;
(b)approved by the Treasury; and
(c)published in a manner approved by the Treasury as suitable in their opinion to bring the guidance to the attention of persons likely to be affected by it.
(4) In paragraph (3), an “appropriate body” means any body which regulates or is representative of any trade, profession, business or employment carried on by the payment service provider.
(5) Where the Commissioners decide to impose a penalty under this regulation, they must give the payment service provider notice of—
(a)their decision to impose the penalty and its amount;
(b)the reasons for imposing the penalty;
(c)the right to a review under regulation [F312A]; and
(d)the right to appeal under regulation [F412].
(6) Where the Authority proposes to impose a penalty under this regulation, it must give the payment service provider notice of—
(a)its proposal to impose the penalty and the proposed amount;
(b)the reasons for imposing the penalty; and
(c)the right to make representations to it within a specified period (which may not be less than 28 days).
(7) The Authority must then decide, within a reasonable period, whether to impose a penalty under this regulation and it must give the payment service provider notice of—
(a)its decision not to impose a penalty; or
(b)the following matters—
(i)its decision to impose a penalty and the amount;
(ii)the reasons for its decision; and
(iii)the right to appeal under regulation 13(1)(a).
(8) A penalty imposed under this regulation is payable to the supervisory authority which imposes it.
Textual Amendments
F3Word in reg. 11(5)(c) substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 177(2)
F4Word in reg. 11(5)(d) substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 177(3)
12.—(1) Any payment service provider who is the subject of a decision by the Commissioners to impose a penalty under regulation 11 [F6may appeal to the tribunal in accordance with regulation 12F].
[F7(2) The provisions of Part 5 of the Value Added Tax Act 1994 (appeals), subject to the modifications set out in paragraph 2 of Schedule 2 of these Regulations, apply in respect of appeals to a tribunal made under this regulation as they apply in respect of appeals made to the tribunal under section 83 (appeals) of that Act.
(3) A tribunal hearing an appeal under paragraph (2) has the power to—
(a)quash or vary any decision of the supervisory authority, including the power to reduce any penalty to such amount (including nil) as it thinks proper, and
(b)substitute its own decision for any decision quashed on appeal.
(4) For the purposes of appeals under this regulation, the meaning of “tribunal” is as defined in section 82 of the Value Added Tax Act 1994.]
Textual Amendments
F5Reg. 12 heading substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 178(2) (with Sch. 3 paras. 2-4)
F6Words in reg. 12(1) substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 178(3) (with Sch. 3 paras. 2-4)
F7Reg. 12(2)-(4) substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 178(4) (with Sch. 3 paras. 2-4)
12A.—(1) The Commissioners must offer a person (P) a review of a decision that has been notified to P if an appeal lies under regulation 12 in respect of the decision.
(2) The offer of the review must be made by notice given to P at the same time as the decision is notified to P.
(3) This regulation does not apply to the notification of the conclusions of a review.]
Textual Amendments
F8Regs. 12A-12F inserted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 179 (with Sch. 3 paras. 2-4)
12B.—(1) The Commissioners must review a decision if—
(a)they have offered a review of the decision under regulation 12A, and
(b)P notifies the Commissioners accepting the offer within 30 days from the date of the document containing the notification of the offer.
(2) But P may not notify acceptance of the offer if P has already appealed to the tribunal under regulation 12F.
(3) The Commissioners shall not review a decision if P has appealed to the tribunal under regulation 12F in respect of the decision.]
Textual Amendments
F8Regs. 12A-12F inserted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 179 (with Sch. 3 paras. 2-4)
12C.—(1) If under regulation 12A, the Commissioners have offered P a review of a decision, the Commissioners may within the relevant period notify P that the relevant period is extended.
(2) If notice is given the relevant period is extended to the end of 30 days from—
(a)the date of the notice, or
(b)any other date set out in the notice or a further notice.
(3) In this regulation “relevant period” means—
(a)the period of 30 days referred to in regulation 12B(1)(b), or
(b)if notice has been given under paragraph (1) that period as extended (or as most recently extended) in accordance with paragraph (2).]
Textual Amendments
F8Regs. 12A-12F inserted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 179 (with Sch. 3 paras. 2-4)
12D.—(1) This regulation applies if—
(a)The Commissioners have offered a review of a decision under regulation 12A, and
(b)P does not accept the offer within the time allowed under regulation 12B(1)(b) or 12C(2).
(2) The Commissioners must review the decision under regulation 12B if—
(a)after the time allowed, P notifies the Commissioners in writing requesting a review out of time,
(b)the Commissioners are satisfied that P had a reasonable excuse for not accepting the offer or requiring review within the time allowed, and
(c)the Commissioners are satisfied that P made the request without unreasonable delay after the excuse had ceased to apply.
(3) The Commissioners shall not review a decision if P has appealed to the tribunal under regulation 12F in respect of the decision.]
Textual Amendments
F8Regs. 12A-12F inserted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 179 (with Sch. 3 paras. 2-4)
12E.—(1) This regulation applies if the Commissioners are required to undertake a review under regulation 12B or 12D.
(2) The nature and extent of the review are to be such as appear appropriate to the Commissioners in the circumstances.
(3) For the purpose of paragraph (2), the Commissioners must, in particular, have regard to steps taken before the beginning of the review—
(a)by the Commissioners in reaching the decision, and
(b)by any person in seeking to resolve disagreement about the decision.
(4) The review must take account of any representations made by P at a stage which gives the Commissioners a reasonable opportunity to consider them.
(5) The review may conclude that the decision is to be—
(a)upheld,
(b)varied, or
(c)cancelled.
(6) The Commissioners must give P notice of the conclusions of the review and their reasoning within—
(a)a period of 45 days beginning with the relevant date, or
(b)such other period as the Commissioners and P may agree.
(7) In paragraph (6) “relevant date” means—
(a)the date the Commissioners received P’s notification accepting the offer of a review (in a case falling within regulation 12A), or
(b)the date on which the Commissioners decided to undertake the review (in a case falling within regulation 12D).
(8) Where the Commissioners are required to undertake a review but do not give notice of the conclusions within the time period specified in paragraph (6), the review is to be treated as having concluded that the decision is upheld.
(9) If paragraph (8) applies, the Commissioners must notify P of the conclusion which the review is treated as having reached.]
Textual Amendments
F8Regs. 12A-12F inserted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 179 (with Sch. 3 paras. 2-4)
12F.—(1) An appeal under regulation 12 is to be made to the tribunal before—
(a)the end of the period of 30 days beginning with the date of the document notifying the decision to which the appeal relates, or
(b)if later, the end of the relevant period (within the meaning of regulation 12C).
(2) But that is subject to paragraphs (3) to (5).
(3) In a case where the Commissioners are required to undertake a review under regulation 12B—
(a)an appeal may not be made until the conclusion date, and
(b)any appeal is to be made within the period of 30 days beginning with the conclusion date.
(4) In a case where the Commissioners are requested to undertake a review in accordance with regulation 12D—
(a)an appeal may not be made—
(i)unless the Commissioners have decided whether or not to undertake a review, and
(ii)if the Commissioners decide to undertake a review, until the conclusion date; and
(b)any appeal is to be made within the period of 30 days beginning with—
(i)the conclusion date (if the Commissioners decide to undertake a review), or
(ii)the date on which the Commissioners decide not to undertake a review.
(5) In a case where regulation 12E(8) applies, an appeal may be made at any time from the end of the period specified in regulation 12E(6) to the date 30 days after the conclusion date.
(6) An appeal may be made after the end of the period specified in paragraph (1), (3)(b), (4)(b) or (5) if the tribunal gives permission to do so.
(7) In this regulation “conclusion date” means the date of the document notifying the conclusions of the review.]
Textual Amendments
F8Regs. 12A-12F inserted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 179 (with Sch. 3 paras. 2-4)
13.—[F9(1) A payment service provider may appeal from a decision by the Authority under regulation 11(7).]
[F9(2) An appeal from a decision by the Authority is to the Financial Services and Markets Tribunal.]
(3) The provisions of Part 9 of the 2000 Act (hearings and appeals), subject to the modifications set out in paragraph 1 of Schedule 2, apply in respect of appeals to the Financial Services and Markets Tribunal made under this regulation as they apply in respect of references made to that Tribunal under that Act.
F10(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F10(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F9Reg. 13(1)(2) substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 180(2) (with Sch. 3 paras. 2-4)
F10Reg. 13(4)(5) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 2 para. 180(3) (with Sch. 3 paras. 2-4)
14.—(1) A payment service provider is guilty of an offence in respect of any transfer of funds to which the payments regulation applies—
(a)in the case of the payment service provider of the payer, if he fails to comply with any requirement in—
(i)Article 5(1) read with Article 6(1) (information accompanying transfers of funds within the EEA);
(ii)Article 5(2) read with Article 5(3) or (4) (whichever is relevant) (verification of information);
(iii)Article 5(5) (record keeping);
(iv)Article 6(2) (information to be provided following request);
(v)Article 7(1) read with Article 7(2) (information accompanying transfers of funds from the EEA to outside the EEA);
(b)in the case of the payment service provider of the payee, if he fails to comply with any requirement in Article 8 (detection of missing information), 9(1) or the third paragraph of Article 9 (transfers of funds with missing or incomplete information) or Article 11 (record keeping);
(c)in the case of the intermediary payment service provider, if he fails to comply with any requirement in Article 12 (keeping information on the payer with the transfer) or 13(3), (4) or (5) (use of a payment system with technical limitations).
(2) A payment service provider who is guilty of an offence under paragraph (1) is liable—
(a)on summary conviction, to a fine not exceeding the statutory maximum;
(b)on conviction on indictment, to imprisonment for a term not exceeding two years, to a fine or to both.
(3) In deciding whether a person has committed an offence under paragraph (1), the court must consider whether the person followed any relevant guidance which was at the time—
(a)issued by a supervisory authority or any other appropriate body;
(b)approved by the Treasury; and
(c)published in a manner approved by the Treasury as suitable in their opinion to bring the guidance to the attention of persons likely to be affected by it.
(4) In paragraph (3), an “appropriate body” means any body which regulates or is representative of any trade, profession, business or employment carried on by the alleged offender.
(5) A person is not guilty of an offence under this regulation if he took all reasonable steps and exercised all due diligence to avoid committing the offence.
(6) Where a person is convicted of an offence under this regulation, he shall not also be liable to a penalty under regulation 11.
15.—(1) Proceedings for an offence under regulation 14 may be instituted by—
(a)the Director of Revenue and Customs Prosecutions or by order of the Commissioners;
(b)the Director of Public Prosecutions; or
(c)the Director of Public Prosecutions for Northern Ireland.
(2) Proceedings for an offence under regulation 14 may be instituted only against a payment service provider or, where the payment service provider is a body corporate, a partnership or an unincorporated association, against any person who is liable to be proceeded against under regulation 16.
(3) Where proceedings under paragraph (1) are instituted by order of the Commissioners, the proceedings must be brought in the name of an officer of Revenue and Customs.
(4) Where the Commissioners investigate, or propose to investigate, any matter with a view to determining—
(a)whether there are grounds for believing that an offence under regulation 14 has been committed by any person; or
(b)whether a person should be prosecuted for such an offence,
that matter is to be treated as an assigned matter within the meaning of section 1(1) of the Customs and Excise Management Act 1979 M15.
(5) Paragraphs (1) and (3) do not extend to Scotland and, in its application to the Commissioners acting in Scotland, paragraph (4)(b) shall be read as referring to the Commissioners determining whether to refer the matter to the Crown Office and Procurator Fiscal Service with a view to the Procurator Fiscal determining whether a person should be prosecuted for such an offence.
Marginal Citations
M151979 c. 2. See the definition in section 1 of “assigned matter” substituted by the Commissioners for Revenue and Customs Act 2005 (c. 11).
16.—(1) If an offence under regulation 14 committed by a body corporate is shown—
(a)to have been committed with the consent or the connivance of an officer of the body corporate; or
(b)to be attributable to any neglect on his part,
the officer as well as the body corporate is guilty of an offence and liable to be proceeded against and punished accordingly.
(2) If an offence under regulation 14 committed by a partnership is shown—
(a)to have been committed with the consent or the connivance of a partner; or
(b)to be attributable to any neglect on his part,
the partner as well as the partnership is guilty of an offence and liable to be proceeded against and punished accordingly.
(3) If an offence under regulation 14 committed by an unincorporated association (other than a partnership) is shown—
(a)to have been committed with the consent or the connivance of an officer of the association; or
(b)to be attributable to any neglect on his part,
the officer as well as the association is guilty of an offence and liable to be proceeded against and punished accordingly.
(4) If the affairs of a body corporate are managed by its members, paragraph (1) applies in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body.
(5) Proceedings for an offence alleged to have been committed by a partnership or an unincorporated association must be brought in the name of the partnership or association (and not in that of its members).
(6) A fine imposed on the partnership or association on its conviction of an offence is to be paid out of the funds of the partnership or association.
(7) Rules of court relating to the service of documents are to have effect as if the partnership or association were a body corporate.
(8) In proceedings for an offence brought against the partnership or association—
(a)section 33 of the Criminal Justice Act 1925 M16 (procedure on charge of offence against corporation) and Schedule 3 to the Magistrates' Courts Act 1980 M17 (corporations) apply as they do in relation to a body corporate;
(b)section 70 of the Criminal Procedure (Scotland) Act 1995 M18 (proceedings against bodies corporate) applies as it does in relation to a body corporate;
(c)section 18 of the Criminal Justice (Northern Ireland) Act 1945 M19 (procedure on charge) and Schedule 4 to the Magistrates' Courts (Northern Ireland) Order 1981 M20 (corporations) apply as they do in relation to a body corporate.
(9) In this regulation—
“officer”—
in relation to a body corporate, means a director, manager, secretary, chief executive, member of the committee of management, or a person purporting to act in such a capacity; and
in relation to an unincorporated association, means any officer of the association or any member of its governing body, or a person purporting to act in such capacity; and
“partner” includes a person purporting to act as a partner.
Marginal Citations
17. Any charge or penalty imposed on a payment service provider by a supervisory authority under regulation 5(1) or 11(1) is a debt due from that person to the authority, and is recoverable accordingly.
18. In determining whether a person has failed to comply with any requirement in the payments regulation, any transfer of funds between the United Kingdom and—
(a)the Channel Islands; or
(b)the Isle of Man,
shall be treated as a transfer of funds within the United Kingdom.
19. Schedule 3, which contains consequential amendments, has effect.
Signatory text
Frank Roy
Claire Ward
Two of the Lords Commissioners of Her Majesty's Treasury
Regulation 7(2)
1. If the payment service provider is a body corporate (“BC”), a person who is or has been—U.K.
(a)an officer or manager of BC or of a parent undertaking of BC;
(b)an employee of BC;
(c)an agent of BC or of a parent undertaking of BC.
2. If the payment service provider is a partnership, a person who is or has been a member, manager, employee or agent of the partnership.U.K.
3. If the payment service provider is an unincorporated association of persons which is not a partnership, a person who is or has been an officer, manager, employee or agent of the association.U.K.
4. If the payment service provider is an individual, a person who is or has been an employee or agent of that individual.U.K.
Regulation 13(3) and (4)
1. Section 133 of the 2000 Act (hearings and appeals) is modified as follows—
(a)in paragraph (a) of subsection (1), for “decision notice or supervisory notice in question” substitute “ notice under regulation 11(7) of the Transfer of Funds (Information on the Payer) Regulations 2007 ”;
(b)omit subsections (6), (7), (8) and (12); and
(c)in subsection (9)—
(i)for “decision notice” where it first occurs substitute “ notice under regulation 11(7) of the Transfer of Funds (Information on the Payer) Regulations 2007 ”;
(ii)in paragraph (a), omit “decision”.
[F112. Part 5 of the Value Added Tax Act 1994 (appeals) is modified by omitting sections 83A to 84, 85A and 85B.]
Textual Amendments
Regulation 19
1. After paragraph 25 of Schedule 3 to the Northern Ireland Act 1998 M21 (reserved matters), insert—
“25A. The subject-matter of the Transfer of Funds (Information on the Payer) Regulations 2007, but in relation to any type of business.”.
Marginal Citations
M211998 c. 47. Paragraph 25 of Schedule 3 was amended by S.I. 2003/3075 and is amended, with effect from 15th December 2007, by S.I. 2007/2157.
2. In section 68(2) of the Criminal Justice and Police Act 2001 M22 (application to Scotland), after paragraph (f) insert—
“(g)regulation 39(6) of the Money Laundering Regulations 2007; and
(h)regulation 9(6) of the Transfer of Funds (Information on the Payer) Regulations 2007.”.
Marginal Citations
M222001 c. 16. Paragraph 73J is inserted, with effect from 15th December 2007, by S.I. 2007/2157.
3. In Part 1 of Schedule 1 to the Criminal Justice and Police Act 2001 (powers of seizure to which section 50 of the 2001 Act applies), after paragraph 73J insert—U.K.
73K. The power of seizure conferred by regulation 9(6) of the Transfer of Funds (Information on the Payer) Regulations 2007 (entry to premises under warrant).”.
(This note is not part of the Regulations)
These Regulations make provision for the enforcement of the obligations set out in EC Regulation 1781/2006/EC of the European Parliament and of the Council of 15th November 2006 on information on the payer accompanying transfers of funds (“the EC Regulation”) (OJ No L 345, 8.12.2006). The EC Regulation imposes obligations on payment services providers when they make or receive a transfer of funds. An impact assessment has been prepared and a copy of this has been placed in the library of each House of Parliament and is available on HM Treasury's website (www.hm-treasury.gov.uk).
Part 2 makes provision for the supervision of payment service providers (individuals or businesses whose business includes services for the electronic transfer of funds on behalf of a payer). Regulation 3 allocates supervisors to payment service providers: those authorised by the Financial Services Authority will be supervised by it; those not so authorised are supervised by Her Majesty's Revenue and Customs. Regulation 4 sets out the duties on the two supervisors. Regulation 5 enables supervisors to impose charges on providers they supervise for compliance with the EC Regulation.
Part 3 provides enforcement powers for the supervisors. These include powers to obtain information from payment service providers and persons connected to them (in regulation 7), to enter and inspect premises (regulations 8 and 9), and to apply to court when a provider has failed to comply with a requirement to produce information to a supervisor (regulation 10). Civil penalties may be imposed by the supervisors under regulation 11 on providers who fail to comply with the requirements of the EC Regulation. Provision is made for reviews of and appeals against such penalties (regulations 12 and 13). Payment service providers and their officers and senior management who fail to comply with the requirements of the EC Regulation may also be guilty of a criminal offence (regulations 14 to 16). Providers convicted of a criminal offence may not also be liable to a civil penalty.
Regulation 17 contains provision for the recovery of penalties and charges through the court. Regulation 18 reflects the position under Article 17(2) of the EC Regulation that transfers of funds between the United Kingdom and any of the Crown Dependencies are to be treated as transfers within the United Kingdom. Regulation 19 makes consequential amendments to primary legislation.