Directive (EU) 2015/849 (“AMLD”) lays down that obliged entities shall refrain from carrying out transactions which are considered suspicious until they have completed the necessary actions in terms of suspicious transactions reporting.

Our question arises from the situation involving a Company engaged in the business of issuing and distributing shopping cards.  More specifically, the business of the Company is focused on the sale of shopping cards through a digital platform (“Platform”); such shopping cards are issued partly by the Company itself and partly by other merchants; in both cases, the shopping cards available on the Platform (“Shopping Cards”) can be used only in a limited way, namely: 

- the Shopping Cards issued by the Company can only be used on the Platform to purchase other shopping cards issued by other merchants;

- the Shopping Cards issued by other merchants and distributed by the Company can only be used to acquire goods or services in the premises of the relevant issuer. 

Moreover, the users of the Platform (“Users”) can perform a wide range of activities (such as posting comments and reviews, accessing to the Platform on a daily basis or purchasing Shopping Cards which grant a cashback credit and so on) in order to gain specific utilities (“Points” and “Credits”) which can be used to pay a percentage of the value of some Shopping Cards. 

Anyone who wishes to purchase the Shopping Cards and, generally speaking, to have access to the Platform shall create a personal account: the more activities the Users are able to perform on the Platform, the more utilities the Users will earn in order to increase the balance (in terms of points and/or credits) of their personal accounts. 

Due to such limitations, the Shopping Cards distributed through the Platform qualify as specific-purpose payment instruments as defined in Article 3(k) of Directive (EU) 2015/2366 (“PSD2”) and the monetary value stored on such Shopping Cards falls out of the scope of application of the Electronic Money Directive, Directive 2009/110/EC (“EMD”) according to Article 1(4) of the latter Directive; therefore, neither the issuing nor the distribution of the Shopping Cards requires any authorisation under either EMD or PSD2.  As a consequence, the Company carries out its business without being authorised as neither an electronic money institution nor a payment institution and, since it does not fall under any other category listed in art. 2, par. 1, AMLD, it shall not be deemed an obliged entity for the purposes of EU anti-money laundering (“AML”) legislation. 

In order to prevent the Users from carrying out illegal activities on the Platform, the applicable terms and conditions (“Terms and Conditions”) – which all Users must accept in order to create their personal accounts – provide the Company with the power to suspend – upon its unfettered discretion – the account of the User who should carry out any activity in violation of the relevant AML laws and regulations.  

In this context, in order to facilitate online payments on the Platform, the Company has concluded a contract with a payment institution (“Institution”), which allows the Company to receive payments through the use of the online payment system managed by the Institution. 

By monitoring the payment transactions initiated through the Platform, the Institution has identified several suspicious transactions initiated by some Users. For instance, the Institution has detected the following unusual activities: 

- some Users have made purchases which were not consistent with their ordinary activity on the Platform (for example, the User who made an unusual number of purchases compared either with its previous overall activity or with the number of shopping cards which are usually issued by the Company or by other merchants); 

- some Users have purchased an unusually large number of identical Shopping Cards either in bulk or by making several purchases throughout the same day (even just a few minutes from one another). 

The Institution, having reason to suspect that such transactions were related to proceeds of criminal activities, has requested the Company to suspend the accounts of the Users involved in such suspicious transactions. 

This measure was meant to allow the Institution to perform the appropriate checks; therefore, the Company suspended the accounts of the Users identified by the Institution.

Therefore, the suspension was meant to prevent violations of AML’s laws and regulations and was executed in accordance with the applicable Terms and Conditions.  Nevertheless, during the proceedings initiated against the Company by an administrative authority (“Administrative Authority”), the latter has issued a measure stating that: 

- the clause of the Terms and Conditions regarding the power of the Company to suspend the account of the Users (in case they carry out any activity of money laundering) shall be declared unfair within the meaning of Article 3 of Directive 93/13/EEC; 

- the Company shall refrain from suspending its Users’ accounts without a just cause;

- if a just cause does exist, the Company shall be entitled to suspend or terminate the account of one or more of its Users, provided that, in this case, the User obtains the reimbursement of (a) any amount paid to purchase Shopping Cards on the Platform, as well as of (b) the monetary value of any other utility (in terms of Points and Credits) earned as a result of the activities carried out on the Platform. 

In our view, the Company’s behaviour should be deemed legitimate and consistent with the applicable AML laws and regulations; moreover, we believe that the action requested by the Administrative Authority in terms of reimbursement would not be consistent with the rationale of such legislation, as it entails that the User is entitled to keep amounts of money which could be proceeds of criminal activities. 

Please note that the Company has challenged the above mentioned administrative measure before an Administrative Court and the discussion hearing is scheduled for July 7th 2021. 

Because of such stringent calendar, we would be grateful if the European Banking Authority (“EBA”) could kindly provide an answer to our request quickly.