RTS on criteria for business relationships and occasional transactions

Business relationships and linked transactions are defined in Article 2(1), points (19) and (20), of Regulation (EU) 2024/1624, and these definitions should be leading in the obliged entity’s assessment of whether a business relationship or linked transaction exists. To support their consistent identification across the Union, this Regulation provides criteria for certain elements of these definitions. These criteria are neither exhaustive nor determinative; their fulfilment does not in itself establish, nor their absence preclude, the existence of a business relationship or linked transaction.

Since business relationships and occasional transactions are mutually exclusive, occasional transactions are defined negatively in this Regulation. This Regulation only applies to activities that fall within the scope of the AML/CFT framework. Accordingly, activities outside that framework cannot constitute either a business relationship or an occasional transaction.

The AML/CFT framework applies to obliged entities that carry out transactions and to those, such as real estate agents and notaries, that provide services connected to transactions. Such services may be provided in the context of a business relationship or an occasional transaction. For the purposes of customer due diligence thresholds, obliged entities that provide services connected to transactions should consider the value of the relevant transaction, excluding any transaction or service fees.

An element of the definition of a business relationship is the expectation or subsequent acquisition of an element of duration. In assessing that element, obliged entities should consider whether the customer has been granted ongoing access to services within the scope of the AML/CFT framework, including through a customer account. Registration granting such access may indicate an expected degree of duration, whereas subscriptions to purely informational communications, such as newsletters, should not.

In certain non-financial sectors, obliged entities typically provide services connected to transactions rather than carrying out transactions themselves. To support the consistent identification of business relationships in those sectors, this Regulation specifies criteria that may assist in assessing the elements of duration and repetition referred to in the definition of a business relationship. Relevant considerations may include whether the provision of a service requires a series of actions over time, whether services are provided to the same customer at different intervals, including in relation to different objects, and whether different categories of services are provided.

Obliged entities that carry out the activities of currency exchange (bureaux de change), money remittance as defined in Article 4, point (22), of Directive (EU) 2015/2366 of the European Parliament and of the Council(⁴), or comparable services offered by crypto-asset service providers as set out in Article 3(1), points (16)(c), (d) and (j), of Regulation (EU) 2023/1114 of the European Parliament and of the Council(⁵) are associated with heightened risks of money laundering and terrorist financing and are subject to divergent approaches to the identification of business relationships and linked transactions. To mitigate those risks, this Regulation specifies criteria that obliged entities should take into account when assessing the element of repetition in the definition of a business relationship, including the occurrence of three transactions within a period of 12 months and the existence of a specific period of one month for the purposes of identifying linked transactions.

Article 3 of this Regulation sets out criteria to assist obliged entities in identifying linked transactions according to the definition sets out in Article 2(1) point (20), of Regulation (EU) 2024/1624. The criteria should be assessed as part of an overall evaluation of the relevant facts and circumstances. Therefore, no single criterion should be considered decisive on its own, nor should any criterion be disregarded solely because it is not, in itself, determinative. Certain criteria should be taken into account only where the relevant information is available to the obliged entity, whether through the nature of its business, its legal requirements or its observations. Obliged entities should take into account information they have, or should have, access to, but should not be required to obtain information solely for the purpose of identifying linked transactions.

Transactions carried out by different customers may not, in isolation, appear to be linked. However, when considering the elements of identical or similar origin and destination, obliged entities should take into account information indicating that customers in question are connected through family ties or a business arrangement, including ownership, control or commercial cooperation. Likewise, obliged entities should take into account customers operating in concert, including through physical or digital coordination. Operating in concert should be understood broadly and should include, for instance, customers coming in together and customers coordinating with each other before or during the transaction. The use of the same digital infrastructure, such as an IP (Internet Protocol) address, device identifier or geolocation should also be considered.

Transactions relating to the same underlying purchase should be considered a criterion for assessing whether transactions have an identical or similar purpose. Relevant indications may include a common invoice, booking number or order.

In order to assess the elements of other relevant characteristics, obliged entities should consider transactions that share common characteristics, as they may indicate a circular movement of funds across multiple accounts or jurisdictions, synchronised transactions or transactions forming part of a series. Participation in a loyalty programme offered by the obliged entity should also be considered. This can take different forms, including, for instance, the issuance of a loyalty card or the offering of discounts for the performance of multiple transactions or multiple purchases.

When considering the element of a specific period, obliged entities should at least take into account transactions that are performed within a short period of time. The duration that constitutes a short period of time may differ significantly between obliged entities and the services they offer. It should, therefore, be determined on the basis of the nature of the business, including the speed and frequency with which transactions are typically carried out, and the size of the obliged entity.

To allow obliged entities sufficient time to adapt, where necessary, their systems, policies, controls and procedures, including training of staff, to the requirements laid down in this Regulation, and thereby facilitate their effective implementation, this Regulation should apply six months after its entry into force.

This Regulation is based on the draft regulatory technical standards submitted to the Commission by the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (the ‘Authority’).

The Authority has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based and analysed the potential related costs and benefits,