European banks and the cross-border provision of services via the Internet: Commercial practices and regulatory concerns
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Papers European banks and the cross-border provision of services via the Internet: Commercial practices and regulatory concerns Apostolos Goutzinis Centre for Commercial Law Studies, Queen Mary and Westfield College, University of London, Mile End Road, London E1 4NS, UK tel: +44 (0)207 882 5127; fax: +44 (0)208 980 1079; e-mail: [email protected]
Apostolos Goutzinis LLB (Aristotle University of Thessaloniki), LLM (London), Attorney, Member of the Bar (Greece), PhD candidate, CCLS, Queen Mary and Westfield College, University of London. The present paper forms part of a PhD project, which is conducted under the auspices and the financial support of the Hellenic State Scholarships Foundation, Athens, for which the author is sincerely grateful.
Journal of International Banking Regulation, Vol. 3, No. 3, 2001, pp. 208–229 # Henry Stewart Publications, 1465–4830
Page 208
ABSTRACT An increasing number of European banking institutions have become active in the provision of banking and other financial services over the Internet in their domestic markets and abroad. This paper attempts to tackle two pivotal issues: the implications this strategy has for the licence requirements that apply on every single occasion and, furthermore, how the problem of allocation of regulatory jurisdiction is resolved in view of the uncertain territorial elements of a cross-border Internet transaction. The analysis will be based on legal developments in three key European jurisdictions, namely the UK, France and Germany, as well as the community regulatory framework.
INTRODUCTION The emergence of the Internet as an electronic platform for the supply of financial services in Europe has raised significant new challenges and regulatory concerns with regard to the creation of a single European market in the field. First, the Internet challenges the archetypal paradigm of retail cross-border banking activity. The key element of an integrated financial market, spread in a number of sovereign jurisdictions on the basis of a multilateral legal arrangement, is, inter alia, the unrestricted and effective provision of services by banking institutions established in a given member state to individual and corporate customers in another member state.1 Traditionally, this exercise largely involves either a permanent presence of the provider of the service in the host country by way of establishment of a dependent or separately incorporated organisational structure or the temporary movement of the recipient or the provider of the service towards the home territory of his counterparty for the purpose of the completion of the transaction.2
Goutzinis
Of course, the cross-border provision of financial services can indeed be carried out at a distance, without any movement either of the supplier or of the recipient of the service. This can be done in many traditional ways which were established long before the appearance of non-proprietary interactive telecommunications networks.3 The characteristic contribution of the Internet, however, in the formulation of a
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