Fédération bancaire française

…03/05/2021 DAC 8 – FBF’S COMMENTS ON EU PUBLIC CONSULTATION The French Banking Federation (FBF), as the voice of the French banking sector representing the interests of over 400 banks operating in France, encompassing large and small, wholesale and retail, local and cross-border financial institutions, welcomes the opportunity to provide comments on EU’s public consultation document issued on DAC 8. This note aims to provide the French banking sector’s position. I- The lack of unified definition in European union Crypto assets represent virtual assets stored on an electronic support that allow a community of users accepting them as payment to carry out transactions without having to resort to legal tender. Virtual currency is one form of the existing crypto assets.

…out transactions without having to resort to legal tender. Virtual currency is one form of the existing crypto assets. Legally, a crypto asset is not a legal currency: its issue does not depend on any governmental institution and is not an official currency with a legal tender. Attempts to define certain types of crypto assets exist at the European level1. However, as far as the concept of crypto assets is concerned, the MICA Regulation has introduced nuances in the definition of the constituent elements of this category of assets, which do not allow to grasp all forms of crypto assets or which create biases that are detrimental to a true European harmonization. As long as all of these ongoing works have not been completed at the European level, there is no legal definition of crypto-assets and no regulatory framework for their transaction.

…at the European level, there is no legal definition of crypto-assets and no regulatory framework for their transaction. In this context, it seems premature to set up a system for exchanging information, for tax purposes, on these assets. The Electronic Money Directive2 defines "electronic money" as “electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions as defined in point 5 of Article 4 of Directive 2007/64/EC, and which is accepted by a natural or legal person other than the electronic money issuer”. Unlike crypto assets, e-money is only issued by 1 As an example, a definition of virtual currency has been inserted in the 5th anti-money laundering Directive.

…by 1 As an example, a definition of virtual currency has been inserted in the 5th anti-money laundering Directive. 2 DIRECTIVE 2009/110/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC transposed in article L.315-1, I CMF. Ref. Ares(2021)3844718 - 11/06/2021 2 organizations with a specific license, is denominated in a regulated currency unit and does not generate any capital gain. Electronic money (E-money) is, from a legal perspective, a currency stored on electronic memories independently of a bank account. In the money supply categories, it is opposed to fiat money (coins and notes) or scriptural money (deposit account).

In the money supply categories, it is opposed to fiat money (coins and notes) or scriptural money (deposit account). The fundamental differences between these two types of assets lead the FBF to suggest to the European Commission to apply to them a different treatment. II- Extend the application of DAC2 provisions to all the e-money issuers As proposed by the recent OECD WP10 (First Comprehensive Review of the Common Reporting Standard) and in order to avoid overlapping regulations on e-money issuers, the FBF suggests to the European Commission that e-money issuers should also be subject to DAC 2 obligations and thus not fall within the scope of the DAC 8 provisions.

…e-money issuers should also be subject to DAC 2 obligations and thus not fall within the scope of the DAC 8 provisions. Moreover, as the objective of DAC 2 is to combat tax fraud, the FBF suggests that certain low-risk transactions carried out by these electronic money issuers may be carved out under the following : the value of the products or the purposes for which the products can be used or the limitations on the who can make use of the products. III- Refocus the collection of information for tax authorities on the relevant actors: intermediaries in crypto-assets Financial institutions are not in the best position to provide information to tax authorities on crypto assets and e-money. Identifying the holding of these assets by bank customers is impossible: this is the main reason why the European commission should not choose this path.

…by bank customers is impossible: this is the main reason why the European commission should not choose this path. The collection and transmission of information would then be the responsibility of crypto- assets intermediaries. Banks would, then, only be affected to the extent that they provide one of these services. While supporting the European Commission's project, it is essential to refocus the collection of information for tax authorities, on the relevant actors: intermediaries in crypto-assets.

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