Brussels, 07/12/2015 (Agence Europe) - The French authorities want to put an end to anonymity - preferably at European level - in the use of prepaid cards, the recent attacks on Paris having highlighted the ability of terrorist networks to finance themselves underground.
“Electronic currency, particularly in the form of prepaid cards, lends itself to being used on a massive scale by criminal and terrorist groups” and “allows purchases to be made completely secretly, such as airline tickets and weapons”, the French authorities stress in a document which was forwarded to their European partners on Friday 27 November. It is alleged that prepaid cards purchased in Belgium were used to prepare for the Paris terrorist attacks. Furthermore, the French customs authorities have seized a Panamanian prepaid card with €250,000 loaded onto it.
The directive (2009/110) on electronic currency allows prepaid cards to be used with no identity checks up to an amount of €250 for non-top-up cards, and up to €2,500 a year for top-up cards. These new rules constitute progress for social inclusion, but “fail effectively to limit the intrinsic risks of electronic currency, and of prepaid cards in particular”, the French authorities state. The letter goes on: “The European rules do not systematically require proof of identity to be presented when purchasing the electronic medium (the magnetic or chip card). Additionally, the risk that prepaid cards could be issued on presentation of forged documents is a very real one, as the card distributors are generally not equipped to detect false or stolen identification”.
France proposes the following measures at European Union level: - obligatory identity checks from the first euro when purchasing or topping up electronic currency, with retention of the copy of the documents provided so that these can be put in a centralised register; - top-up limits for the cards using means of payment which cannot be traced; - setting a maximum top-up limit; - the traceability of operations carried out using electronic currency. The terminals should also be developed so that prepaid card payments can be differentiated from those attached to a bank account.
Lastly, a regime for electronic currency distributors could be set in place for distributors of electronic currency, natural or legal persons which allow an electronic currency establishment to carry out its activities in another member state.
These proposals will be discussed at the Ecofin Council on Tuesday 8 December. “The Germans take very much the same view as we do. They are extremely keen for concrete progress to be made in the next few months”, said a French diplomatic source, who added that “we mustn't leave any loopholes”.
On the fight against money laundering and the financing of terrorism, France is considering other areas for work, such as reinforcing the financial intelligence cells, improving the European mechanism for freezing terrorist assets, tackling the illegal trade in cultural goods, the creation of national bank account registers and a new programme to track the financing of terrorism (TFTP). (Original version in French by Mathieu Bion)