Issues a formal Opinion on refugees--Actualizado el 1 MAY 16
The European Banking Authority allows asylum
seekers to send remittances
The European Banking Authority (EBA) has issued a formal Opinion  removing the obstacles that prevented
asylum seekers from accessing financial services in some European countries.  Despite its name, the
European Banking Authority extends its reach to financial services not offered by banks, like money transfer
or electronic money.
As strange as it may seem, the obstacle removed was that some European countries didn’t recognize as valid
documents the ID’s they issued by themselves to those asylum seekers.
In fact, there is nothing revolutionary in the European Banking Authority Opinion, since it states that official ID’
s issued to asylum seekers are just that, documents that can identify its holders. In its own words “the EBA
considers that these official identity documents are likely to satisfy the verification requirement”. But it’s worth
taking a minute to understand how some European countries came to though otherwise.

The reason why they took this stance is related with the European regulation against money laundering. This
regulation requires financial services companies to apply Customer Due Diligence measures before
supplying any services, whether to sending remittances or to opening a bank account. Among other things,
those measures consists of verifying the identity of the customer through what the regulation defines as a
“reliable and independent source.”  However, the European Union law does not explain in what consists
exactly a “reliable and independent source”.
So, member countries have defined it at will. For instance,
France, considers that this description fits in any
official document that has a photo, name, date of birth and delivery details. This means that a passport or an
asylum seeker ID could be accepted . But other countries, like Germany, long ago published a closed list of
documents deemed acceptable . The problem is that the German list did not include the IDs that German
authorities give to each asylum seeker when they request the refugee status. It must to be noted that,
usually, asylum seekers surrender their original passport to the local authorities and it remains under custody
during the application process, which can last for years.
Consequently, asylum seekers had documents in Germany that did not allowed them to access financial
services. In September 2015 the German regulator for financial services Bafin issued a transitional provision
allowing asylum seekers and refugees to open bank accounts with the documents supplied by Immigration
Authorities . However, this only applies to bank accounts, and not to other services such as Money Transfer.
In fact, the formal decision was presented
as a letter addressed by Bafin to the German Banking Association.
Therefore, asylum seekers’ IDs didn’t allowed their holders to receive Money Transfer services.
This situation was discussed at length during a recent Knomad workshop devoted to the remittances of
refugees and IDPs. In particular, it was discussed which countries were affected and the possible solutions.
This workshop’s written conclusion reflects the consensus regarding refugees’ remittances that “the first
priority identified was understanding the regulatory environment and its impacts”, in particularly, Anti Money
Laundering Regulations .
This situation exemplifies how central Regulations have become for remittances, with several layers of
specific obligations, both for customers and operators. However, those obligations have not yet been
balanced with a set of rights that could allow for a smooth and level playing field between supply and
demand. Other examples abound, like
the now famous de-risking, recently surveyed by the World Bank .

As asylum seekers could not access legitimate operators in certain European countries, their sole option to
send or receive remittances was by using informal mechanisms.
These included the Hawala networks that have repeatedly been
found to be related with terrorism financing. But not only was demand affected,
the legitimate suppliers were also deprived from clients for their services. In the case of remittances, this
meant that what is called “asylum corridors” had to have a small number of users, and therefore high prices.
The EBA Opinion will provide a remedy to this situation, provided that it is swiftly implemented by member