France is pushing for European Union states to clamp down on prepaid cards and virtual currencies, as well allowing direct access to bank transfers data, in a bid to cut terrorist financing.
The proposal on Friday comes before an EU finance ministers meeting next week and follows the Paris attacks on November 13 that killed 130 people and were partly funded through prepaid cards, French officials said.
"Terrorist attacks on European soil in recent years have underscored the need to substantially boost efforts to fight terrorism and terrorist financing at EU level," a French government paper, seen by Reuters, said.
The document was sent to European diplomats this week and will form the basis of a discussion at a regular meeting of EU finance ministers on December 8 in Brussels, where terrorism financing is one of the subjects in the formal agenda.
"E-money and, particularly, prepaid cards (..) could be very widely used by organised crime, migrant traffickers and terrorists," the French paper said.
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"Criminal investigation department officers have already found prepaid cards during searches of the homes of individuals belonging to such networks," it said.
Prepaid cards are issued by a wide range of operators, including major actors such as Visa and Mastercard. They are different from debit and credit cards because they need to be loaded before payments can be made, but can carry substantial amounts of money.
The French customs recently seized a Panamanian prepaid e-money card with 250,000 euros ($A372,995.15) stored on it, the document said.
Virtual currencies, of which bitcoin is the most widely used, are also seen as a potential cover funding tool as "the lack of transparency due to the total anonymity of transactions makes them impossible to monitor," the French document said.
It acknowledged that these transactions are recorded in public databases in some cases.
The French proposed caps on amounts that can be loaded on prepaid cards and limits on the conversion of virtual currencies into legal currencies. Controls on the users of these financial instruments should also be stepped up.
A week after the Paris shooting, a crisis meeting of EU interior ministers urged the European Commission to make proposals to "strengthen controls of non-banking payment methods such as electronic/anonymous payments, money remittances, cash-carriers, virtual currencies, transfers of gold or precious metals and prepaid cards".
The Commission, the EU's executive, will inform EU finance ministers next week on the next steps to fight terrorism financing, the agenda of the meeting says.
The French proposal goes beyond the crackdown on non-banking payments and urges ministers to set up a European program to track bank transfers and intercept transactions used by what it called terrorist organisations.
A US Terrorist Financing Tracking Program (TFTP) has been in place for more than a decade. Since 2010, it also covers transactions involving European citizens through the SWIFT system, the most widely used platform for bank transactions.
The existing TFTP program is controversial in Europe because of its impact on the privacy of EU citizens and of possible abuses carried out by US intelligence services. EU lawmakers have repeatedly asked to suspend the program.
