To link to this article, copy this persistent link:

(Nov 02, 2007) On July 5, 2007, the Administrative Court of Frankfurt am Main upheld an administrative decision of the German Banking Supervisory Agency (Bundesanstalt für Finanzdienst-leistungsaufsicht) that forbade a Swiss provider of consumer loans to engage in loan transactions with German customers via the Internet (Verwaltungsgericht Frankfurt/M, docket No.1 E 4355/06 (V), as summarized in Mathias Hanten, Kurzkommentar, ENTSCHEIDUNGEN ZUM WIRTSCHAFTSRECHT 573 (2007)). The Swiss firm was not licensed by the Swiss Banking Commission to engage in banking transactions, but merely was licensed according to the laws of the Swiss Canton of Sankt Gallen to provide consumer loans; the firm solicited German customers on the Internet through a German credit agency.

Both the German court and the German banking agency based their decisions on section 32 of the German Banking Act (Gesetz über das Kreditwesen, repromulgated Sept. 9, 1998, BUNDESGESETZBLATT [BGBL] I at 2776, as amended) that requires anyone engaging in banking transactions in Germany on a commercial scale to obtain a license from the German banking authority. The Court held that the Swiss firm was engaging in banking in Germany because its advertisements and the terms of the offered transactions were tailored to the German market. The Court also held that Germany was not obligated by the General Agreement on Trade in Services [GATS] (Apr. 15, 1994, I.L.M. 1167 (1994)) to open its markets to border-crossing Internet banking transactions. Germany ratified the GATS on August 30, 1994 (BGBl II at 1438), together with the accompanying Annexes and the Schedule of Specific Commitments of the European Communities and their Member States (BGBl 1994 II at 1521); Germany ratified the Fourth Protocol of April 15, 1997 on November 20, 1997 (BGBl II 1990), and the Fifth Protocol of February 27, 1998, became effective for Germany on March 1, 1999 (BGBl 1999 II at 312).

Author: Edith Palmer More by this author
Topic: Banks and financial institutions More on this topic
Jurisdiction: Germany More about this jurisdiction

Search Legal News
Find legal news by topic, country, keyword, date, or author.

Global Legal Monitor RSS
Get the Global Legal Monitor delivered to your inbox. Sign up for RSS service.

The Global Legal Monitor is an online publication from the Law Library of Congress covering legal news and developments worldwide. It is updated frequently and draws on information from the Global Legal Information Network, official national legal publications, and reliable press sources. You can find previous news by searching the GLM.

Last updated: 11/02/2007