WRITTEN QUESTION P-1017/02

by Francesco Speroni (NI) to the Commission

(5 April 2002)

Subject: Restrictions on the use of cheques made out in euro

As was pointed out in Question H-0087/02(1), some businesses such as the ACCOR chain in France explicitly refuse to accept cheques made out in euro drawn on banks in other countries, even if they are part of Euroland.

This is the case regardless of the amount, whether or not the customer is known or the type of cheque, the only criterion being the location of the bank on which the cheque is drawn, which means that a customer whose cheque is refused if it is drawn on a non-French bank can have a cheque of the same kind and for the same amount accepted, provided that it is drawn on a bank located in France. It is therefore not a question of preferring cash or other forms of payment, whether the customer is known or not or a minimum or maximum amount, but solely a question of territorial discrimination.

Is this practice compatible with the rules on the free movement of capital and the rest of the Union's legislation?

(1) Written answer of 12.3.2002.

Answer given by Mr Bolkestein on behalf of the Commission

(11 June 2002)

The only payments by cheque accepted by a commercial undertaking in France are cheques drawn on banks located in France, and cheques drawn on foreign banks are refused. The Honourable Member asks whether such a practice is compatible with the EC Treaty, given that all these cheques are in euros.

In the context of payments it is important to make a distinction between strictly national transactions and those which have a cross-border dimension. A payment using a national cheque for 100 within France entails virtually no charges. A cross-border payment in euros of the same amount would incur charges of over 25. The beneficiary is in serious danger of receiving less than 75 in payment. There are consequently sound economic reasons for refusing such cheques.

These cheques are refused because simply they are cross-border cheques. Under the legal tender principle a trader is never obliged to accept a cheque payment, but he cannot refuse a payment in cash. It is therefore legally possible for a trader to decide to accept only certain categories of cheque.

The question then arises as to whether such behaviour should be judged in accordance with the EC Treaty rules on the free movement of capital (Article 56(1)) or payments between Member States (Article 56(2)). These rules apply only to the Member States. The case in point relates to a commercial decision by a private company. It does not therefore seem to be governed by the above rules of the EC Treaty.

This being said, the Commission nevertheless takes the view that this difference in price between national payments and cross-border payments is unacceptable for the smooth operation of the internal market. In July 2001, it therefore proposed a Regulation introducing the principle of non-discrimination in charges between national payments and cross-border payments. This Regulation was adopted on 19 December 2001(1). The Commission originally proposed that the principle of equality of charges should also apply to cross-border payments by cheque. Parliament and the Council decided not to follow the Commission's suggestion on that point.

The two main arguments were:

- Cheques are disappearing as a form of national payment in several Union Member States;

- Cheques cannot be used as a mechanised means of cross-border payment. This is explained in the eighth recital of the Regulation, which states:

At present, it is not advisable to apply the principle of uniform charges for paper cheques as by nature they cannot be processed as efficiently as the other means of payment, in particular electronic payments. However, the principle of transparent charges should also apply to cheques.

The principle of the harmonisation of charges set out in Article 3 does not therefore apply to cheques (cf. answer to Question 3681/01 Banotti).

(1) Regulation No 2560/2001 of the European Parliament and of the Council of 19 December 2001 on cross-border payments in euro, OJ L 344, 28.12.2001.