The European Commission is proposing that banks register the name, address and account numbers of anybody transferring funds in the European Union, in an attempt to cut off funding sources for terrorists and other criminals.
The commission says its proposal would help the authorities in detecting, investigating and prosecuting terrorists and other criminals and tracing their assets.
Under the proposed legislation, the name, address and account number of the sender of the transfer would always be transmitted together with the funds. This data would be stored and may be passed on to police and law enforcement authorities as long as used for the prevention, detection or prosecution of money launderers and terrorist financiers.
The legislation would apply to even the smallest sums and would include all funds transfers into and out of the EU. A simplified version of the regime is proposed for transfers within the EU, in line with the efforts to build a single market for payments.
Banks and other funds transfer firms would be forced to reject any unidentified transfers or terminate contracts with firms that fail to provide information on the sender.
Charlie McCreevy, internal market commissioner, says: "The fight against terrorism requires a sustained and focused effort on many fronts. One of these is to cut off the funding for terrorist actions."
The proposal forms part of the EU's 'Plan of Action to Combat Terrorism' and comes after the suicide bomb attacks in central London earlier this month.