Saturday, June 26, 2004

What about special recommendation VI of the FATF?

At this very moment most mobile operators are considering their best lobbying way forward. Quite a few think that it may be possible to steer clear from e-money regulation (effective immediately as the rules are all in place) by looking forward to the New Legal Framework of the EU Commission. In the process they forget about other issues such as: special recommendation VI, to be implemented in February 2005 at the latest:

VI. Alternative remittance
Each country should take measures to ensure that persons or legal entities, including agents, that provide a service for the transmission of money or value, including transmission through an informal money or value transfer system or network, should be licensed or registered and subject to all the FATF Recommendations that apply to banks and non-bank financial institutions. Each country should ensure that persons or legal entities that carry out this service illegally are subject to administrative, civil or criminal sanctions.

This SR implies that the 'postpone-the-discussion-to-the-New-Legal-Framework-solution' will conflict with the duties of government under the FATF. The New Legal Framework is clearly not yet sufficiently designed and thought-through to be effective regulation in February 2005. So, as in 2000, all regulatory roads lead to a regulation of mobile operators as e-money institutions (of full banks if they so desire). And it will be interesting to see what new arguments and solutions will be put forward by the mobile operators lobby.

To be continued....

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