A proposed plan by the European Commission (EC) to combat terrorism financing would require customs declarations for prepaid cards sent in postal parcels or freight shipments into or out of the EU. Currently, cards sent or shipped across EU borders are not covered by the standard customs declaration requirement. Coming in the wake of a truck attack in Berlin that left 12 people dead and dozens wounded, the proposal is part of the EC’s action plan against terrorist financing, an initiative unveiled in February 2016, designed to help EU nations cut off the supply of funding for terrorist activity. One major component of the action plan involves empowering customs authorities to inspect more types of goods coming into the EU.
In addition to examining prepaid card shipments, the EC’s proposal also calls for tighter controls on cash moving into or out of the EU. Under current law, individuals carrying more than €10,000 (US$10,483) in cash into or out of the EU must declare it at customs, or risk the funds being seized. The new plan would enable officials to seize funds below that threshold “where there are suspicions of criminal activity.” The proposals must be approved by EU states and the European Parliament to become law.
The plan does not appear to require declarations by consumers when they carry prepaid cards with balances greater than €10,000 into the EU. In the U.S., FinCEN previously proposed to implement an anti-money laundering rule to reclassify prepaid cards as monetary instruments, which would have required consumers to declare when they transport prepaid cards with a value of more than $10,000 into or out of the U.S. Although the proposal was met with an outcry from the industry about privacy concerns, among other issues, a FinCEN spokesman told Reuters in August that the rule is being revised and could be submitted next year.
The EC’s latest proposal follows other initiatives unveiled by European officials following the November 2015 attacks in Paris aimed at stemming the flow of terrorism funding. In February, the EC proposed amendments to the 4th Anti-Money Laundering Directive that would bring virtual currencies, such as bitcoin, under the scope of the directive, requiring virtual currency exchange platforms to identify and verify the identities of people using such platforms. The commission also raised the possibility of requiring prepaid card distributors to verify consumer identities at the time of sale or activation of the card, rather than later—a requirement that could prove overly burdensome and cause providers to stop offering prepaid products altogether, critics of the plan cautioned.
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