WRITTEN QUESTION E-0199/02

by Bernd Lange (PSE) to the Commission

(5 February 2002)

Subject: Management of business accounts in Austria

A question has been put to me concerning the general terms and conditions applied by Austrian banks. At the Wiener Volksbank, German business customers must have separate resident and non-resident accounts. However, it is not possible to carry out direct transactions from resident accounts, instead credit must be entered every month into another account before it can be used for payment or other transactions. For the transfer of credit, the account holder incurs substantial charges as well as high transfer fees.

Is such discrimination against residents and non-residents lawful and is the foreign exchange law in Austria and the treatment of clients, particularly in view of the common currency and the ensuing elimination of the exchange-rate mechanisms, in line with European law?

If not, what action does the Commission plan to take?

Answer given by Mr Bolkestein on behalf of the Commission

(4 March 2002)

The free movement of capital as provided for in Article 56 of the EC Treaty is one of the cornerstones of the Single Market. However, Article 58 of the EC Treaty explicitly sets out the Member States' right to maintain or introduce certain measures for reasons of taxation (different treatment of residents and non-residents) as well as for statistical and administrative reasons. However, such measures may not be discriminatory.

Austria imposes certain reporting requirements on their banks and financial institutions in order to obtain statistical information for establishing the balance of payments: according to the regulations issued by the Austrian National Bank, banks have to distinguish between resident- and non-resident accounts. Certain transactions from and/or to a non-resident account as well as cross-border transactions in general have to be notified to the authorities.

However, in order to allow for cheaper retail payments within Austria, banks are authorised to arrange for a specific Euro account for non-residents (Euro-Sonderkonten für Devisenausländer; Exporterlös-Sammelkonten). Transfers from and to such accounts can be made under the same conditions as domestic transfers from and to resident accounts. The transfers to be credited to that account can however not exceed a sum of EUR 12 500 and have to be transferred at least once a month to a non-resident account or to an account abroad.

There is also a tax-issue to be considered in this context: residents in Austria are subject to Austrian income tax on the interest from their bank accounts. Non-residents, on the contrary, are normally not subject to Austrian income tax on such income, but in their country of residence.

Hence, operating a non-resident account calls for additional administrative procedures for the credit institutions under present Austrian legislation. If a bank therefore decides to levy additional charges in order to cover the cost of the necessary manual handling, this decision is a commercial decision and not an illegal discrimination. The business policy of charging for the operation of non-resident accounts does not constitute an infringement against existing Community-legislation.

Nonetheless, the Commission considers since a long time that the above-mentioned reporting requirements have to be simplified if not abolished altogether within the Internal Market as a matter of principle. The Parliament actively supports the Commission's initiatives in this respect. A first token of success is the agreement among Member States to require reporting only for transfers of more than EUR 12 500 from 1 January 2002 onwards. This will certainly decrease the cost for the cross-border credit transfers as well as for transfers from and to non-resident accounts of lower value.

Moreover, the recently adopted Regulation on cross-border payments in euro(1) should further contribute to alleviate the existing problems in connection with non-resident accounts. This Regulation aims at a reduction of charges for cross-border payments of up to EUR 12 500, so that by 1 July 2002 (concerning electronic payment transactions) and respectively by 1 July 2003 (concerning cross-border credit transfers) charges have to be aligned to those for corresponding payments at national level.

(1) Regulation (EC) No 2560/2001 of the Parliament and of the Council of 19.12.2001, OJ L 344, 28.12.2001.