On 7 May 2018, the European Commission adopted a Delegated Regulation supplementing the Fourth Anti-Money Laundering Directive (4MLRD) with regulatory technical standards on the criteria for the appointment of central contact points for electronic money issuers and payment service providers and with rules on their functions.

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The Delegated Regulation is based on the draft regulatory technical standards that the European Supervisory Authorities produced for the Commission which set out the criteria that Member States should use when deciding whether or not foreign institutions that operate establishments other than a branch in the Member State’s territory should appoint a central contact point and what the functions of that central contact point should be.

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As per the Delegated Regulation, host Member States may require e-money issuers and payment services providers that have establishments in their territory in forms other than a branch and whose head office is situated in another Member State, to appoint a central contact point where any of the following criteria is met:

 

(a) the number of such establishments is 10 or more;

(b) the cumulative amount of the electronic money distributed and redeemed, or the cumulative value of the payment transactions

executed by the establishments is expected to exceed EUR 3 million per financial year or has exceeded EUR 3 million in the previous financial year;

(c) the information necessary to assess whether or not the criterion in point (a) or (b) is met is not made available to the host Member State’s competent authority upon request and in a timely manner.

 

As detailed in the Delegated Regulation, the central contact shall ensure that establishments comply with AML/CFT rules of the host Member State. The central contact point shall facilitate the supervision by competent authorities of the host Member State of establishments.

 

In addition, host Member States may require central contact points to perform, on behalf of the appointing electronic money issuer or payment services provider, one or more of the following functions: (a) file reports pursuant to local financial intelligence units; (b) respond to any request of the financial intelligence units related to the activity of establishments and providing relevant information related to such establishments to the financial intelligence units; (c) scrutinise transactions to identify suspicious transactions where appropriate, in light of the size and complexity of the electronic money issuer's or payment services provider’s operations in the host Member State.