BaFin consults on the application of anti-money laundering requirements to e-money operations

06/07/2014

BaFin’s draft guidance emphasised that monitoring obligations apply to e-money transactions, in particular to pre-payments for e-money cards. This included payments made via a collective fiduciary account. The guidance also states that credit institutions that act as fiduciary agents for e-money issuers are treated as e-money agents and are also therefore obliged to monitor such payments.

The objective of these monitoring obligations (under section 1(3) and 11(1) of the German Money Laundering Act, “Geldwäschegesetz” or “GwG”) is to detect and report suspicious transactions. The GwG is generally only applicable to e-money issuers with a registered office or branch in Germany. However, BaFin states that anti-money laundering requirements could also be applicable to cross-border services rendered in Germany. Moreover, BaFin warns German credit institutions against trying to avoid these obligations by using a foreign branch to manage the collective fiduciary account.