BRUSSELS (Reuters) - European Union states should clamp down on prepaid cards and virtual currencies to cut terrorist financing and have direct access to bank transfers data, France proposed before an EU finance ministers meeting next week.
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”.
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.
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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