ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(74)813
Vol.1974/0125

Disclaimer
Conformément aurèglement(CEE,Euratom)n°354/83duConseildu1erfévrier1983
concernantl'ouvertureaupublicdesarchiveshistoriquesdelaCommunauté économique
européenneetdelaCommunautéeuropéennedel'énergieatomique(JOL43du15.2.1983,
p.1),telquemodifiéparlerèglement(CE,Euratom)n°1700/2003du22septembre2003
(JOL243du27.9.2003,p.1),cedossierestouvertaupublic.Lecaséchéant,lesdocuments
classifiésprésentsdanscedossierontétédéclassifiésconformément àl'article5dudit
règlement.
InaccordancewithCouncilRegulation(EEC,Euratom)No354/83of1February1983
concerningtheopeningtothepublicofthehistoricalarchivesoftheEuropeanEconomic
CommunityandtheEuropeanAtomicEnergyCommunity(OJL43,15.2.1983,p.1),as
amendedbyRegulation(EC,Euratom)No1700/2003of22September2003(OJL243,
27.9.2003,p.1),thisfileisopentothepublic.Wherenecessary,classifieddocumentsinthis
filehavebeendeclassified inconformitywithArticle5oftheaforementioned regulation.
InÜbereinstimmung mitderVerordnung(EWG,Euratom)Nr.354/83desRatesvom1.
Februar1983überdieFreigabederhistorischen ArchivederEuropäischen
Wirtschaftsgemeinschaft undderEuropäischen Atomgemeinschaft (ABI.L43vom15.2.1983,
S.1),geändertdurchdieVerordnung(EG,Euratom)Nr.1700/2003vom22.September2003
(ABI.L243vom27.9.2003,S.1),istdieseDateiderÖffentlichkeitzugänglich.Soweit
erforderlich,wurdendieVerschlusssachen indieserDateiinÜbereinstimmung mitArtikel5
dergenanntenVerordnungfreigegeben.

COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(74)813final
Brussels.10June1974
Proposalfora
COUNCILREGULATION (EEC)
amendingArticle107ofRegulation(SEC)No574/72oftheCouncil
of21March1972fixingtheprocedureforimplementing Regulation
(ESC)No1408/71ontheapplicationofsocialsecurityschemesto
employedpersonsardtheirfamiliesmovingwithintheCommunity
(submittedtotheCouncil "bytheCommission)
cai(74)813final

EXPLANATORY MMORANDUM
When "theproposal forCouncil Regulation (EEC)No574/72wasbeing
drafted ,itwasconsidered preferable ,forthesake ofclarity andtoensure
uniform implementation ,to "bring together inonesingle article allquestions
concerning theconversion ofonecurrency into another forthecalculation ,
payment orrefund of "benefits .
Thus ,Article 107(l )ofCouncil Regulation (EEC)No574/72lists
alltheprovisions ofCouncil Regulation (EEC)No1408/71andofCouncil
Regulation (EEC)NO574/72forthepurposes ofwhich theconversion of
amounts shown indifferent national currencies iseffected atthe official
parvalues declared bythenational monetary authorities andrecognized by
theInternational Monetary Fund ,Article 107(2 )provides that inallother
cases theconversion ismade attherate ofexchange actually used atthe
time ofpayment .
These mechanisms ,taken over from theprevious Regulations Nos 3
and4andtheDecisions taken bytheAdministrative Commission inpursuance
ofthese Regulations ,remained valid while these Regulations were inforce .
Theinternational monetary system that existed when Article 107was
being drafted wasbased ontheBretton Woods Agreement which provided forfixed but
adjustable gold parities andexchange rates with very narrow fluctuation
margins .However ,this system hasbeen drastically changed since the
Washington Agreements of18December 1971 •Apart from theofficial gold
parities –which nolonger correspond tomarket exchange rates –each country
nownotifies a"central rate "which isless legally binding andeasier to
alter than official parvalues .Moreover ,fluctuation margins have been
widened and ,insome cases ,abolished .

Inordertomaintainamongthemstablemonetaryrelations,the
MemberStatesintroducedinApril1972aCommunityexchangesystemwithas
itsprominentfeatureanarrowingofthefluctuation marginsofCommunity
currencies(2.25percentinsteadof4»5PercentundertheWashington
Agreements),However,thePoundSterling(UnitedKingdomandIreland)began
tofloaton23June1972,followedbytheItalianLiraon13February1973
andtheFrenchFrancon19January1974#Inaddition,theGermanMarkwas
revaluedon11Marchandagainon29June1973andtheDutchGuilderon
17September1973*
Asaresult,Article107ofRegulationNo574/72hadalreadybeen
overtakenbyeventswhenthatRegulationwasadopted.Socialsecuritybenefits
inthedifferentcurrenciesceasedtobeofequalvaluewhereverconversions
wereeffectedatparvalueandoneormorecurrenciesdeviatedsubstantially
onthemarket.
Inordertoremedytheinconsistencies arisingfromthissituation,
thecompetentauthorities ofseveralMemberStatestooktheinitiativeof
applyingtransitional provisionspendingarevisionofArticle107ofCouncil
Regulation(EEC)No574/72.
TheproposalforaRegulationpresentedherewithamendsArticle107
insuchamannerastorelateitclosertomonetaryrealities.
Wheretwocurrencieswhosedifferencebetweenthemarketexchange
rateandtheratethatcorrespondstotheirdefactoparityratio(i.e.the
centralrateortheparvaluedeclaredtotheInternational MonetaryFund)
maynotexceedamarginof2.25percent,theconversionistobemadeby
referencetothatdefactoparity.

Inthecaseoftwocurrencies whosedifference betweenthemarket
exchangerateandtheratethatcorrespondstotheirdefactoparityratio
mayexceedamarginof2,25Pe**cent,theconversionistobemadeby
referencetoanexchangeratecalculatedbytheCommission onthebasisof
thearithmeticmeanoftheexchangeratesofthesecurrenciesrecordedon
eachofthetwonationalforeignexchangemarkets.
Articlel(2)oftheproposedRegulation,whichlaysdownthe
exchangeratestobeusedinthelattercase,hasinitsentiretybeentaken
overfromArticlel(3)ofDecisionNo3542/73/EISCSoftheCommissionof
19December1973»publishedintheOfficialJournaloftheEuropeanCommunities
NoL361of29December1973»
TheratestobeusedintheMemberStatesforthepurposesofthe
provisionslistedinparagraph1(whichhavebeenstrictlyconfinedtocases
involvingcalculationofbenefits,excludingcasesrelatingtoreimbursement )
aretobebasedonratesrecordedinAprilforthosetobeappliedfrom1July
following,andonratesrecordedinOctoberforthosetakingeffecton
1Januaryfollowing.
Wheneverratesfixedinaccordancewithparagraph 1fluctuateby
morethan10percent,theAdministrative Commissionwillexaminewhetherthe
substantialfluctuationsthathaveoccurredarelikelytopersistorwhether
theyaremerelyaccidentaland,onthatbasis,decidewhetherthereference
periodoughttobechanged.
Theexchangeratestobeused–thatis,thosecalculatedbythe
CommissionforthepurposesofArticle107ofRegulationNo574/72exclusively–
willbepublishedintheOfficialJournaloftheEuropeanCommunitiesduring
thelastmonthbutoneprecedingthemonthfromthefirstdayofwhichthey
willbeapplicable.Thiswillenablethesocialsecurityinstitutions ofthe
MemberStatestomakethenecessarycalculations andtoissuethecorresponding
ordersforpaymentintimesoastoensurethatthepersonsconcernedwill
receivethembythefirstdaysofthenewperiodofapplication.
Paragraph6is,asregardsitssubstance,identicaltothepresent
Article107(2)ofRegulationNo574/72,
Paragraph3providesthattheAdministrative Commissionistofix
thedatestobetakenintoaccountfordeterminingtheexchangeratestobe
usedinthecasesreferredtoinparagraphI5theseareadministrative
implementing provisionssimilartothosewhichtheAdministrative Commission
adoptedundertheformerRegulations Nos3and4»

Proposalfora
COUNCILREGULATION(EEC)
amendingArticle107ofRegulation(EEC)NO574/72oftheCouncil
of21March1972fixingtheprocedureforimplementing Regulation
(EEC)NO1408/71ontheapplicationofsocialsecurityschemesto
employedpersonsandtheirfamiliesmovingwithintheCommunity
THECOUNCILOFTEEFJROFEANCOMMUNITIES ,
HAVINGREGARDtotheTreatyestablishing theEuropeanEconomicCommunity,
andinparticularArticles2,7and51thereof|
HAVINGREGARDtoRegulation(EEC)No1408/71oftheCouncilof14June1971
ontn^application ofsocialsecurity.sohemestoemployedpersonsajidtheir
familiesmovingwithintheCommunity1'',lastamendedbyRegulation(EJJC)
No tandinparticularArticle97thereof|
HAVINGREGARDtoRegulation(EEC)No574/72oftheCouncilof21March19723^
fixingtheprocedureforimplementingtheaforementioned .Regulation(EEC)
No1408/71,lastamendedbyRegulation(EEC)No
HAVINGREGARDtotheproposalfromtheCommissiondrawnupafterconsultation
withtheAdministrative Commission onSocialSecurityforMigrantWorkers5
HAVINGREGARDtotheOpinionoftheEuropeanParliament ;
HAVINGREGARDtotheOpinionoftheEconomicandSocialCommitteef
WHEREAStheabovementioned Regulations (EEC)NosI408/7Iand574/72entered
intoforceon1October1972andhavebeenapplicableinthenewMember
Statessince1April1973?
IHEFIEAStheinternational monetarysituationhaschangedsincetheafore­
mentionedRegulations wereadopted;
WHEREASthedetermination ofratesofconversionbetweencurrenciesforthe
purposesofArticle107(l)ofRegulation(EEC)No574/72of21March1$72
ascloselyaspossibleuponmonetaryrealities 5whereasArticle107ofthesnidRegulationshouldthereforebeamended,
HASADOPTEDTHISREGULATION ;
^OJNoL149,5July1971,P.2.
2^0JNo,
3WNoL74,27March1972,p.1.

Article1
Article107ofRegulation(EEC)NO574/72shallbeamended ,asfollows:
Currencyconversion
1.Forthepurposesoftheprovisionslistedhereinafter ,therateof
conversionintoanationalcurrencyofamountsshowninanothernational
currencyshallbedeterminedinaccordancewiththeprovisionsofsub-
paragraphs(a),(b),(c)and(d)below:
provisionsoftheRegulation:Article12(2),(3)and(4)1"thelast
sentenceofArticle19(l)(b),thelastsentenceofArticle22(l)(ii),
thep.-ir,JtimatesentenceofArticle25(l)(b),Article4l(l)(c)and(d),
Article46(3)and(4),Article50»"thelastsentenceofArticle52(b),
thelastsentenceofArticle55(l)(ii)j "thefirstsubparagraphof
Article70(l)andthepenultimatesentenceofArticle7l(l)(b)(ii)>
provisionsoftheImplementingRegulation:Article34(l)andArticle119(2)«
Methodsofdetermining conversionrates:
a)inthecaseoftwocurrencieswhosedifferencebetweenthemarketexchange
rateandtheratethatcorrespondstotheirdefactoparityratiomaynot
exceedamarginof2.25percent,thisdefactoparityinforceonthelastbusinessdayofthereferenceperiodspecifiedinsubparagraph (c)
shallbeusedj
b)inthecaseoftwocurrencieswhosedifference ,betweenthemarketexohange
rateandtheratethatcorrespondstotheirdefactoparityratiomay
exceedamarginof2,25percent,anexchangerateshallbeusedcalculated
bytheCommissiononthebasisofthearithmeticmeanoftheexchangerates
ofthesecurrenciesrecordedoneachofthetwonationalforeignexchange
marketsduringthereferenceperiodspecifiedinsubparagraph (c)|
c)thereferenceperiodshallbethemonthofAprilforexohangeratestobe
usedfrom1Julyfollowing,andthemonthofOctoberforexchangerates
tobeusedfrom1Januaryfollowing ^
d)thedefactoparity,ascurrentlyunderstood,meansthecentralrateor
theparvaluedeclaredtotheInternational MonetaryFund,

2.Theexchange rates tobeused forthepurposes ofsubparagraph l("b)above
shall beasfollows :
a)fortheBelgian Franc andtheLuxembourg Franc :theaverage official
rates quoted oneach business dayontheBrussels exchange ;
b)fortheDeutsche Mark :theaverage official rates quoted oneach
business dayontheFrankfurt exchange 5
0)fortheFrench Franc :theaverage official rates quoted oneach
business day .ontheParis exchange |
d)fortheItalian Lira :theaverage oftheaverage official rates quoted
oneach business day ontheRome andMilan exchanges ;
e)fortheDutch Guilder :theaverage official rates quoted oneach
business dayontheAmsterdam exchange ;
f)fortheUnited Kingdom Pound andtheIrish Pound :theaverage rates
oneach business day atmidday ontheexchange markets ofthetwo
Member States concerned ,inLondon andDublin respectively !
g)fortheDanish Kroner :theaverage official rates quoted atmidday
at ,themeeting presided over atCopenhagen oneach business dayby
the National Bank ofDenmark .
3.Thedate tobetaken into account fordetermining theexchange rates to
boused inthe cases referred toinparagraph 1shall befixed bythe
Administrative Commission onaproposal from the .Audit Board .
4.Whenever therates fixed inaccordance with paragraph 1fluctuate bymore
than 10percent ,theAdministrative Commission mayalter thereference
period specified inparagraph l(c).
5.Theexchange rates tobeused forthepurposes oftheprovisions ofpara­
graph 1shall bepublished intheOfficial Journal oftheEuropean
Communities inthecourse ofthelast month butonepreceding themonth
from thefirst dayofwhich they aretotake effect .
6.Incases notcovered byparagraph 1,theconversion shall bemade atthe
rate ofexchange actually applicable atthetime ofpayment ,both when
paying benefits andwhen making reimbursements .
Article 2
This Regulation shall enter into force onthedayofitspublication inthe
Official Journal oftheEuropean Communities .
Itshall beapplicable asfrom 1July 1974 .Itshall bebinding inits
entirety anddirectly applicable inallliember States .
Done at Brussels .on
For theCouncil ,