Mairead McGuinness, the European Commissioner for Financial Services, has pledged that the bloc's recently disclosed instant payment plans will make sanctions screening "more efficient."
"At the moment, the vast majority of cross-border payments that are flagged during screening are false positives," Commissioner McGuinness said.
"Under this new legislation, providers will be responsible for screening their clients against the latest EU sanctions list," she continued.
Client screening is currently done by providers when someone first creates a payment account and afterwards through at least daily updates to the customer database.
However, these ideas would provide providers the power to halt transactions and freeze the funds of accounts belonging to people who are subject to penalties.
According to Commissioner McGuinness, "this streamlining will save money, while still ensuring maximum vigilance."
The European Commission approved a legislative proposal in October to allow all individuals and organizations with bank accounts in the EU and EEA nations to receive instant payments in euros.
The Commission stated in a statement that the plans would "allow people to transfer money at any time of any day within ten seconds," which would be a significant improvement over the present one-working-day time frame for money transfers.
Additionally, instant payments will "significantly improve cash flow and bring cost savings for businesses, especially for SMEs," as well as "significantly increase speed and convenience for consumers."
Additionally, the Commission states that the funds released by these payments might be utilised "sooner for consumption or investment" instead of being tied up in the "payment float."
The proposed amendment to the Single Euro Payments Regulation (SEPA) from 2012 will increase access to and lower the cost of instant euro payments.
The Commission claimed that by requiring providers to confirm that the beneficiary's name and the bank account number (IBAN) match, the revisions will help boost trust in instant payments.
Additionally, the proposed changes will reduce "friction" in the processing of instant euro payments while "preserving the effectiveness of screening of persons subject to EU sanctions."
In addition to stating that the Commission was "supporting European innovation," "European competitiveness," and "European consumers and businesses," Commissioner McGuinness emphasized how "significant" the proposals were.
By fLEXI tEAM