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Payments & FinTech Lawyer

EU Commission publishes consultation on plans to expand access to centralised bank account registries

The European Commission (‘EC’) issued on 17 October 2017 a public consultation on its plans for possible new EU legislation on ‘Broadening law enforcement access to centralised bank account registries,’ with the objective being to assist those investigating financial crime and terrorist financing by enabling agencies and law enforcement to better track bank and payment information.

Under the EU’s Anti-Fourth Money Laundering Directive (‘4MLD’), all EU Member States will need to set up centralised bank account registries; these registries are useful in that currently, law enforcement agencies without access to such registries must issue requests for information about criminal transactions to all banks in a country, and then wait potentially weeks or months to receive the information, whereas the transactions themselves take merely hours to complete. However, under the 4MLD, access to these registries can be granted only to Financial Intelligence Units and anti-money laundering authorities; the EC is now proposing to expand who would have access to these registries, to include for instance other law enforcement investigations, as well as agencies such as Asset Recovery Offices (‘AROs’) and Anti-Corruption Authorities (‘ACAs’).

“The initiative has the potential to increase public security if the swift access to information substantially facilitates the execution of tasks of law enforcement agencies, AROs and ACAs,” believes Ian Mason, Legal Director at DLA Piper. “It is also hoped that speeding up financial investigations will make it more easy to trace, freeze and confiscate money used for terrorist financing, particularly given organised crime and terror groups now operate internationally on a regular basis. It is part of the plan to strengthen the 4MLD by the improved and enhanced package in the 5MLD.”

The EC has drawn attention in its earlier Impact Assessment on the plans to the need for data protection to be considered, given the extension of the number of public authorities who will be able to access the centralised bank and payment account registries, and notes that exactly which agencies can access the data, alongside how and through what means, must be defined. The EC does note though that given that the initiative aims to reduce the number of ‘blanket requests’ agencies send to banks to receive information, there should be a corresponding reduction in the amount of personal data being exchanged. “It is notable that the Commission acknowledges that the purpose of these registries is to be intelligence tools, not data warehouses,” adds Mason. “The intention is that registries would only contain data to identify an account holder, any person acting on his or her behalf, the IBAN account number, opening date and closing date. It would not contain information on the balance of the account or details of bank transactions.”

The EC’s consultation is now open until 9 January 2018.

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