Establishing a Branch, Cross-Border Provision of Services by Undertakings with their Registered Office in Another State of the European Economic Area

(1) An institution with its registered office in another Member State or another state party to the Agreement on the European Economic Area may, without a licence from BaFin, provide payment services or carry on the e-money business, or distribute or redeem e-money through e-money agents, in Germany through a branch, by way of the cross-border provision of services, or through agents, where the undertaking has been licensed or registered by the competent authorities of the other state, the business is covered by that licence or registration, and the undertaking, the agents or e-money agents are supervised by the competent authorities under provisions corresponding to Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC (OJ L 337, 23.12.2015, p. 35; L 169, 28.6.2016, p. 18), or 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 (OJ L 267, 10.10.2009, p. 7), and the agents have been entered in the institutions register of the competent authority of the home Member State. Section 14 of the Trade Regulation Code remains unaffected.
(2) Where, in the case referred to in subsection (1), BaFin has actual indications that, in connection with the planned engagement of an agent or e-money agent or the establishment of a branch, money laundering within the meaning of section 261 of the Criminal Code or terrorist financing within the meaning of section 1(2) of the Anti-Money Laundering Act is taking place, has taken place, or has been attempted, or that the engagement of the agent or the establishment of the branch increases the risk that money laundering or terrorist financing will take place, BaFin informs the competent authority of the home Member State. The competent authority of the home Member State is the authority able to refuse the entry of the agent or the branch in the Payment Institution Register or E-Money Institution Register kept there, or to delete such an entry where it has already been made.
(3) Section 17 of the Financial Services Supervision Act and sections 3, 7 to 9 and 19(1) and (4) to (6) apply to institutions within the meaning of subsection (1), first sentence. For institutions establishing a branch or engaging agents, section 27(1), second sentence, no. 5, and (2) to (4), section 28(1), nos. 1, 2, 6 and 7, and sections 60 to 62 additionally apply, on the basis that one or more branches of the same undertaking in Germany are deemed a single branch. Changes to the business plan, in particular to the type of business planned and to the organisational structure of the branch, its address and its heads, must be notified to BaFin and the Deutsche Bundesbank in writing or electronically at least one month before they take effect.
(4) Subsection (3), first sentence, applies correspondingly to agents, e-money agents and central contact persons.
(5) Where the competent authorities of the state in which the institution is licensed transmit corresponding particulars to BaFin under section 38, BaFin assesses those particulars within one month of receiving them and communicates to the competent authorities of that state the relevant particulars concerning the payment services that the institution intends to provide in Germany by establishing a branch or by way of the cross-border provision of services.
(6) Where BaFin establishes that the foreign institution is not meeting its supervisory obligations in Germany, it informs the competent authorities of the home Member State of this without delay. As long as the competent authorities of the home Member State do not take measures, or the measures taken prove insufficient, BaFin may, after informing the competent authorities of the home Member State, take the measures necessary to avert a serious threat to the collective interests of payment service users in Germany; where necessary, it may prohibit the conduct of new business in Germany. In urgent cases BaFin may take the necessary measures before initiating the procedure. Such measures must be appropriate, having regard to the purpose they pursue of averting a serious threat to the collective interests of payment service users in the host Member State. They must be ended once the serious threat identified has been averted. They may not lead to payment service users of the payment institution in the host Member State being favoured over payment service users of payment institutions in other Member States. BaFin must inform the competent authorities of the home Member State and of every other Member State concerned, as well as the Commission and the European Banking Authority, in advance or, in urgent cases, without delay, of the measures taken under the second sentence.
(7) After prior notification to BaFin, the competent authorities of the home Member State may, themselves or through their agents, examine at the branch the information required for the prudential supervision of the branch. On the request of the competent authorities of the home Member State, the staff of BaFin and of the Deutsche Bundesbank may assist them in the examination under the first sentence, or conduct the examination on their behalf; BaFin and the Deutsche Bundesbank have for this purpose the powers under section 19 or, where facts justify the assumption, or it is established, that the foreign undertaking is providing unauthorised payment services or carrying on unauthorised e-money business, or is carrying on unauthorised business under the Banking Act, the Insurance Supervision Act or the Capital Investment Code, or is breaching comparable provisions of the home state, also the rights under section 8.
(8) Where the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union takes effect without a withdrawal agreement within the meaning of Article 50(2), second sentence of the Treaty on European Union having entered into force by that time, BaFin may, in order to avoid disadvantages for the functioning or stability of the payment markets, order that subsections (1) to (7) apply, wholly or in part, correspondingly for a transitional period after the withdrawal, to undertakings with their registered office in the United Kingdom of Great Britain and Northern Ireland that, at the time of that withdrawal, were providing payment services in Germany or carrying on the e-money business, or distributing or redeeming e-money through e-money agents, under subsection (1) by means of a branch, by way of the cross-border provision of services, or through agents. This applies only insofar as the undertakings, after the withdrawal, provide payment services or carry on e-money business that is closely connected with contracts existing at the time of the withdrawal. The transitional period beginning at the time of the withdrawal may not exceed 21 months. The order may also be made by general ruling without prior hearing, and publicly announced.