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 The suggested crackdown follows the Paris attacks on Nov. 13 that
killed 130 people and that was partly funded through prepaid cards,
French officials said.
"Terrorist attacks on European soil in recent years have underscored
the need to substantially boost efforts to fight terrorism and
terrorist financing at EU level," a French government paper, seen by
Reuters, said.
The document was sent to European diplomats this week and will form
the basis of a discussion at a regular meeting of EU finance
ministers on Dec. 8 in Brussels, where terrorism financing is one of
the subjects in the formal agenda.
"E-money and, particularly, prepaid cards (..) could be very widely
used by organized crime, migrant traffickers and terrorists," the
French paper said.
"Criminal investigation department officers have already found
prepaid cards during searches of the homes of individuals belonging
to such networks," it said.
Prepaid cards are issued by a wide range of operators, including
major actors such as Visa <V.N> and Mastercard <MA.N>. They are
different from debit and credit cards because they need to be loaded
before payments can be made, but can carry substantial amounts of
money.
The French customs recently seized a Panamanian prepaid e-money card
with 250,000 euros stored on it, the document said.
Virtual currencies, of which bitcoin is the most widely used, are
also seen as a potential cover funding tool as "the lack of
transparency due to the total anonymity of transactions makes them
impossible to monitor," the French document said.
It acknowledged that these transactions are recorded in public
databases in some cases.
The French proposed caps on amounts that can be loaded on prepaid
cards and limits on the conversion of virtual currencies into legal
currencies. Controls on the users of these financial instruments
should also be stepped up.
A week after the Paris shooting, a crisis meeting of EU interior
ministers urged the European Commission to make proposals to
"strengthen controls of non-banking payment methods such as
electronic/anonymous payments, money remittances, cash-carriers,
virtual currencies, transfers of gold or precious metals and
pre-paid cards".
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The Commission, the EU's executive, will inform EU finance ministers
next week on the next steps to fight terrorism financing, the agenda
of the meeting says.
BANK TRANSFERS
The French proposal goes beyond the crackdown on non-banking
payments and urges ministers to set up a European program to track
bank transfers and intercept transactions used by what it called
terrorist organizations.
A U.S. Terrorist Financing Tracking Program (TFTP) has been in place
for more than a decade. Since 2010, it also covers transactions
involving European citizens through the SWIFT system, the most
widely used platform for bank transactions.
European investigators can access bank transfers data involving EU
citizens only after a specific request to the U.S. authorities. The
French complain about "relatively strict terms" and "slow reaction
times" from Washington.
"French authorities are in favor of creating an autonomous European
TFTP as a complement to the U.S. program which would directly use
data on EU citizens," the paper said.
The existing TFTP program is controversial in Europe because of its
impact on the privacy of EU citizens and of possible abuses carried
out by U.S. intelligence services. EU lawmakers have repeatedly
asked to suspend the program.
(Writing by Francesco Guarascio; Editing by Tom Heneghan)
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