AISP/PISP: BaFin outlines obligations under money laundering law
Written By
Partner
Germany
As co-head of the global Finance & Financial Regulation Practice Groups and head of the German Finance & Financial Regulation Practice Group, I advise on national and international finance and capital markets law as well as on commercial and corporate law. I am also a member of the international steering group of our Financial Services Sector Group.
Partner
Germany
As partner in our Finance & Financial Regulation Group in Frankfurt, I advise our national and international clients on banking regulatory issues and finance law.
The time periods for the registration and permit applications for Account Information Services (AIS) and Payment Initiation Services (PIS), which facilitate the transitional periods under the PSD2 implementation, expired on 12 April 2018. The Federal Financial Supervisory Authority (Bafin) generally has three months to process the applications. Many registration and permit procedures for AIS and PIS are therefore about to be subject to a final decision.
In the event of an affirmative decision, the obligations of Payment Initiation Service Providers (PISP) and Account Information Service Providers (AISP) under money laundering law will need to be drawn to the attention of applicants. Both, PISP and AISP, also referred to as Third Party Payment Service Providers (TPPSP), are obliged entities under the German Money Laundering Act. They must therefore fulfil due diligence under money laundering law. In this context, the TPPSP in particular are obligated to report suspicious transactions to the Financial Intelligence Unit (FIU) (Section 43 (1) German Money Laundering Act). PISPs are also obliged to exercise customer due diligence regarding the payee when entering into a long-term business relationship.
This view is shared by Bafin as indicated in its consultation on the new anti-money laundering practice. This has its legal basis in the German Money Laundering Act. However, the application of these obligations is disproportionate, particularly in relation to AIS. AISP (but also PISP) act between customers and licensed payment institutions as well as credit institutions and do not enter into possession or control of customers’ funds. Payment institutions and credit institutions are already subject to the obligations of anti-money laundering law which means that any effort of these companies in this regard is doubled without any advantage for the legitimate interests of money laundering prevention.
