Myth: An EU Directive aiming to prevent money laundering has resulted in banks, building societies and the Post Office demanding I.D. – and a utility bill in particular – to prove one’s name and address. What then happens to children opening bank accounts who have never had to pay such a bill?
Source: Daily Mail (13 March 1995)
Response: Yes, the EU Directive on ‘the prevention of the use of financial system for the purpose of money laundering’ provided the catalyst for such moves. However, the actual details of its implementation were left to national governments and, where governments think appropriate, to the relevant industries themselves. For instance in the UK the British Bankers’ Association (B.B.A.) and the Building Society’s Association, trade associations with input into the Joint Monetary Laundering Steering Group, chaired by the Bank of England, play an important role in this regard.
The EU Directive stipulated that I.D. must be produced when an account is opened, or when a one-off transaction of 15,000 ECU or more is carried out. Why? So that fraud can be prevented and communities protected.
The Directive did not, however, stipulate what kind of I.D. would be necessary; this being the prerogative of national governments. However under Guidance Notes produced by the B.B.A. banks, bank managers and other officials have been told to use their discretion and knowledge of their customers in cases such as the above.
NOTE FOR EDITORS:
The Directive was passed unanimously by EU governments in the Council of Ministers, It acted upon a recommendation by the Financial Action Task Force, set up in 1989 by the G7, which in its 1990 programme called for I.D. to be presented when an account is opened. This had also been approved unanimously.
In fact the main aspects of the system adopted by the EU is based on the existing British format, which had already been in place for some years.