10.9.86 Official Journal of the European Communities No C 229/3 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Directive amending for the third time the First Council Directive for the 
implementation of Article 67 of the EEC Treaty (liberalization of capital movements) 
COM(86) 326 final 
(Submitted by the Commission to the Council on 12 June 1986) 
(86/C 229/03) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 69, 
Having regard to the proposal from the Commission, 
which consulted the Monetary Committee for this 
purpose, 
Having regard to the opinion of the European Par­
liament, 
Whereas the First Council Directive of 11 May 1960 for 
the implementation of Article 67 of the Treaty (1), last 
amended by Directive 85/583/EEC (2), laid down the 
obligations of the Member States in respect of the liber­
alization of capital movements; whereas the degree of 
liberalization differs according to the categories of 
capital movements in question; 
Whereas if the objectives of the Treaty establishing the 
European Economic Community and, in particular, 
completion of the internal market and the Community's 
greater financial integration are to be attained, gradual 
progress must be made towards the liberalization of 
capital movements; whereas such progress must parallel 
that made towards the increased convergence of the 
economic policies of the Member States, greater 
monetary stability and the development of the EMS; 
Whereas, as a result of the operations contained in List B 
of Annex I to the Directive of 11 May 1960 being 
reclassified so that the liberalization rules applying to 
operations on List A of the same Annex apply to them 
also, the procedures for granting the requisite authori­
zations should not be made more complicated for such 
operations; 
(') OJ No 43, 12. 7. 1960, p. 921/60. 
(2) OJ No L 372, 31. 12. 1985, p. 39. Whereas the Kingdom of Spain and the Portuguese 
Republic may, under the terms of Articles 61 to 66 and 
222 to 232 respectively of the 1985 Act of Accession, 
postpone the liberalization of certain capital movements 
in derogation from the obligations of the Directive of 11 
May 1960; whereas these two Member States should be 
able to postpone the application of the new liberalization 
obligations resulting from this Directive, for periods 
similar to those laid down in the Act of Accession in 
respect of operations of the same nature or which 
present an equivalent threat to the balance of payments, 
HAS ADOPTED THIS DIRECTIVE: 
Article 1 
The Directive of 11 May 1960 is hereby amended as 
follows: 
1. Article 2 is hereby repealed; 
2. In Article 3 (1), the words 'List C of Annex P shall be 
replaced by 'List B of Annex P; 
3. Article 5 (2) shall be replaced by the following: 
'Member States shall undertake not to complicate the 
authorization procedures required on the date of 
entry into force of this Directive. They shall simplify 
as far as possible the authorization and control 
formalities applicable to the conclusion or per­
formance of transactions and transfers and shall 
where necessary consult one another with a view to 
such simplification.' 
4. In the last subparagraph of Article 7, the words 
'List D of Annex P shall be replaced by 'List C of 
Annex P; 
5. In Article 10, the words 'Lists A, B, C and D 
contained in Annex P shall be replaced by 'Lists A, B 
and C contained in Annex P. 
No C 229/4 Official Journal of the European Communities 10.9. 86 
6. Annex I shall be replaced by the Annex to this 
Directive. 
7. Annex II is hereby amended as follows: 
— The Nomenclature of Capital Movements is 
hereby amended as follows: 
(a) The following heading shall be added to items 
III A 1, III A 2, III B 1 and III B 2: '(c) units 
of undertakings for collective investment in 
transferable securities'. 
(b) The following two headings shall be added to 
items IV A and IV C: 
'5. Acquisition of units of undertakings for 
collective investment in transferable 
securities. 
6. Repatriation of the proceeds of liquidation 
of units of undertakings for collective 
investment in transferable securities.' 
(c) The following two headings shall be added to 
items IV B and IV D: 
'5. Acquisition of units of undertakings for 
collective investment in transferable 
securities. 
6. Use of the proceeds of liquidation of units 
of undertakings for collective investment in 
transfer-able securities.' 
(d) The title of items IV B and IV D shall be 
amended as follows: 
TV B Acquisition by residents of foreign 
securities dealt in on a stock exchange, or of 
domestic securities dealt in on a stock 
exchange and issued on a foreign market, and 
use of the proceeds of liquidation thereof. 
TV D Acquisition by residents of foreign 
securities not dealt in on a stock exchange, or 
of domestic securities not dealt in on a stock 
exchange and issued on a foreign market, and 
use of the proceeds of liquidation thereof. 
— The Explanatory Notes in Annex II to the 
Directive of 11 May 1960 are hereby amended as 
follows : 
(a) In the definition of undertakings for collective 
investment in transferable securities (*), the 
(') Definition introduced into the Explanatory Notes of Annex 
II to the Directive of 11 May 1960 by Directive 
85/583/EEC on the liberalization of transactions in the 
units of UCITS. first phrase in the first indent shall be replaced 
by the following: 
'— the sole object of which is the collective 
investment in transferable securities 
(shares and other securities of a parti­
cipating nature, bonds) of the capital they 
raise ...' 
(b) The definition of the term 'Shares' shall be 
replaced by the following: 
'Shares and other securities of a participating 
nature: 
securities representing a right of property 
arising from the contributions made to a 
company by its members, these claims giving 
entitlement to a share in the profits made by 
the company and to a share in the net assets in 
the event of liquidation. Include rights to 
subscribe for new issues of securities'; 
(c) The following shall be added: 
'Bonds: 
medium and long term securities, negotiable 
or transmissible, which bear fixed or index-
linked rates of interest generally payable by 
coupons, and which are redeemable, all at 
once or by instalments, in an amount which is 
determined at the time of issue and may be a 
fixed sum or be subject to indexation'. 
Article 2 
Member States shall take the measures necessary to 
comply with this Directive not later than .... (2). They 
shall forthwith inform the Commission thereof. 
The Kingdom of Spain and the Portuguese Republic 
may maintain, until 31 December 1988 and 31 December 
1990 respectively, the rules laid down in Article 3 of the 
Directive of 11 May 1960 in respect of the operations 
referred to in items IV C and D, VII A and B (iii) of the 
Nomenclature of Capital Movements and the operations 
referred to in item III of the said Nomenclature which 
appear in List A annexed to this Directive. 
Article 3 
This Directive is addressed to the Member States. 
(2) Three months after the adoption of this Directive. 
10.9. 86 Official Journal of the European Communities No C 229/5 
ANNEX 
'Annex I 
LIST A 
Capital movements referred to in Article 1 of the Directive 
Direct investments 
excluding purely financial investments made with a view only to giving the 
persons providing the capital indirect access to the money or capital market of 
another country, through the creation of an undertaking or participation in an 
existing undertaking in that country 
Liquidation of direct investments 
Admission of securities of an undertaking to the capital markets 
— Shares and other securities of a participating nature dealt in on a stock 
exchange of a Member State or which are the subject of an application for 
admission to a stock exchange of a Member State 
— Bonds dealt in on a stock exchange of a Member State or which are the 
subject of an application for admission to a stock exchange of a Member 
State 
— Units of undertakings for collective investment in transferable securities 
covered by Directive 85/611/EEC ('), without prejudice to the provisions 
of the said Directive relating to the marketing of units of UCITS (Section 
VIII) 
Operations in securities 
Investments in real estate 
Granting and repayment of credits related to commercial transactions or to 
provision of services in which a resident is participating 
Personal capital movements 
Gifts and endowments 
Dowries 
Inheritances 
Settlement of debts in their country of origin by immigrants 
Transfers of capital belonging to residents who emigrate 
Transfers of capital belonging to emigrants returning to their country of origin 
Transfers of workers' savings during their period of stay 
Transfers by instalment of blocked funds belonging to non-residents by the 
holders of such funds in case of special hardship 
Annual transfers of blocked funds to another Member State by a non-resident 
account holder, up to an amount or percentage of the total assets, fixed uni­
formly by the Member State concerned for all applicants 
Transfers of minor amounts abroad Items of 
nomenclature 
I 
II 
III A 1 and 2 
III B 1 and 2 
IV 
V 
VII 1 A and B 
XB 
XC 
XD 
XE 
XF 
XG 
XH 
XI 
XL 
XM 
(l) Directive on the coordination of laws, regulations and administrative provisions relating to undertakings for collective 
investment in transferable securities (OJ No L 375, 31. 12. 1985). 
No C 229/6 Official Journal of the European Communities 10. 9. 86 
Transfers in performance of insurance contracts 
Sureties, other guarantees and rights of pledge and transfers connected with them 
related to credits in respect of commercial transactions or provision of services 
in which a resident is participating 
related to long-term loans with a view to establishing or maintaining lasting 
economic links 
Other capital movements 
Death duties 
Damages (where these can be considered as capital) 
Refunds in the case of cancellation of contracts and refunds of uncalled-for 
payments (where these can be considered as capital) 
Authors' royalties 
Patents, designs, trade marks and inventions (assignment and transfers arising 
out of such assignments) 
Transfers of the moneys required for the provision of services Items of 
nomenclature 
XI 
XII A and B in 
conjunction with 
VII 1 A and B 
XII A and B in 
conjunction with I 
A 3 and B 3 
XIV A 
XIV B 
XIV C 
XIV D 
XIV E 
The use of the proceeds of liquidation of assets abroad belonging to residents must be permitted at least 
within the limits of the obligations as regards liberalization accepted by Member States 
LISTB 
Capital movements referred to In Article 3 of the Directive 
Items of 
nomenclature 
Admission of securities of an undertaking to the capital market 
— Shares and other securities of a participating nature, not dealt in on a 
stock exchange of a Member State or which are not the subject of an 
application for admission to a stock exchange of a Member State 
— Bonds not dealt in on a stock exchange of a Member State or which are 
not the subject of an application for admission to a stock exchange of a 
Member State 
— Units of undertakings for collective investment in transferable securities 
not covered by Directive 85/611/EEC 
Granting and repayment of medium- and long-term credits related to commercial 
transactions or to the provision of services in which no resident is participating 
Granting and repayment of medium- and long-term loans and credits not related 
to commercial transactions or to the provision of services III A 1 and 2 
III B 1 and 2 
VII 2 
A (ii) and (iii) 
B (ii) and (iii) 
VIII 
A (ii) and (iii) 
B (ii) and (iii) 
10. 9. 86 Official Journal of the European Communities No C 229/7 
Items of 
nomenclature 
Sureties, other guarantees and rights of pledge and transfers connected with them 
and relating to: 
medium and long-term credits in respect of commercial transactions of provi­
sion of services in which no resident is participating VII A and B in 
conjunction with 
VII 2 A (ii) and 
(iii) B (ii) and (iii) 
XII A and B in 
conjunction with 
VIII A (ii) and (iii) 
B (ii) and (iii) 
The use of the proceeds of liquidation of assets abroad belonging to residents must be permitted at least 
within the limits of the obligations as regards liberalization accepted by Member States medium and long-term loans not related to commercial transactions or to pro­
vision of services 
LIST C 
Capital movements referred to in Article 4 of the Directive 
Items of 
nomenclature 
Short-term investments in Treasury bills and other securities normally dealt in on 
the money market 
Opening and placing of funds on current or deposit accounts, repatriation or use 
of balances on current or deposit accounts with credit institutions 
Granting and repayment of short-term credits related to commercial transactions or 
to provision of services in which no resident is participating 
Granting and repayment of short-term loans and credits not related to commercial 
transactions or to provision of services 
Personal capital movements 
loans 
Sureties, other guarantees and rights of pledge and transfers connected with them 
related to short-term credits in respect of commercial transactions or to provi­
sion of services in which no resident is participating 
related to short-term loans and credits not connected with commercial trans­
actions or to provision of services 
related to private loans 
Physical import and export of financial assets 
Other capital movements: Miscellaneous VI 
IX 
VII 2 A (i) B (i) 
VIII A (i) B (i) 
XA 
XII A and B in 
conjunction with 
VII 2 A (i) and B 
(i) 
XII A and B in 
conjunction with 
VIII A (i) and B 
(i) 
XII A and B in 
conjunction with 
XA 
XIII 
XIV F