Financial Crime World

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E-Wallet Limitations to Prevent Money Laundering

In an effort to prevent money laundering and terrorist financing, the maximum amount of electronic money that can be stored in payment instruments has been capped at EUR 250. This limit applies only when the payment instrument is used exclusively for goods or services and the issuer carries out sufficient monitoring of transactions and contractual relations.

Additional Limits on Cash Withdrawals

  • The redemption of cash or cash withdrawal from these instruments cannot exceed EUR 100.
  • However, if the payment instrument can only be used within Iceland, the maximum amount stored in it may reach up to EUR 500.

Acquirers Must Verify Customer Identity

Obliged entities that are licensed to provide services as acquirers must ensure that payments made using anonymous prepaid cards issued outside the EU meet specific requirements. These include customer due diligence measures set out in Article 10, which require verifying the identity of natural persons and legal entities.

Customer Due Diligence Measures

Before establishing a business relationship or conducting a transaction, obliged entities must:

  • Obtain sufficient information about the beneficial owner of the payment instrument.
  • Identify the individual or entity behind the payment and verify their identity using approved identification documents.
  • Conduct ongoing monitoring of their business relationships, verify transactions, confirm the origin of funds, and take reasonable measures to verify relevant information.
  • Update customer information regularly and obtain further information as necessary.

Risk Assessment

The obliged entity’s risk assessment under Article 5 will determine whether additional verification measures are needed. In cases where a transaction is made on behalf of a third party, the obliged entity must:

  • Verify the identity of that third party.

Insurance Policies Must Also Comply

Entities offering life insurance or other investment-related insurance policies must also conduct customer due diligence measures regarding the beneficiary, including identifying them and verifying their identity.

Conclusion

These measures aim to prevent money laundering and terrorist financing by ensuring that payment instruments are used only for legitimate purposes and that the identities of individuals and entities involved in transactions are verified.