OPINION of the Economic and Social Committee on the Communication and Draft Proposal for a Directive on the Transparency and Performance of Cross-Border Payments
Date: 1994-07-06
Institutions: European Economic and Social Committee
Subjects: European Monetary System, capital movement, financial policy, free movement of capital, intra-EU payment













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51994IE0854

OPINION of the Economic and Social Committee on the Communication and Draft Proposal for a Directive on the Transparency and Performance of Cross-Border Payments  


Official Journal C 388 , 31/12/1994 P. 0032 





Opinion on the Communication and draft proposal for a Directive on the Transparency and Performance of Cross-Border Payments (94/C 388/08)On 22 April 1994 the Economic and Social Committee decided, in accordance with Article 23(3) of its Rules of Procedure, to draw up an Opinion on the Communication and draft proposal for a Directive on the Transparency and Performance of Cross-Border Payments.The Section for Economic, Financial and Monetary Questions, which was responsible for preparing the Committee`s work on the subject, adopted its Opinion on 14 June 1994. The Rapporteur was Mr Meyer-Horn.At its 317th Plenary Session (meeting of 6 July 1994) the Economic and Social Committee adopted the following Opinion with one vote against and five abstentions.Summary1. The ESC welcomes the attempts of the Commission and the credit industry to improve the cross-border payments markets and regrets that these attempts were not undertaken earlier.2. The ESC prefers a code of good conduct to a directive. Under the proposals of the Commissioner responsible for consumer protection, Christiane Scrivener, such a code would be signed by the European credit sector associations (ECSAs), users (consumers, commence and SMEs) and the Commission, which would make it sufficiently binding and known to the public.3. If a directive is proposed at all it should be limited to setting out a general framework. If a European directive imposed detailed binding conditions for cross-border transfers, it is to be feared that many, above all smaller, banks would then simply refuse orders for cross-border transfers, especially to accounts with local banks in remote regions. This would lead to gaps in a Europe-wide, all-embracing cross-border transfers market.4. The ESC points out that there is a need for comprehensive technical measures and the corresponding agreements in order to handle cross-border transfers between over 10,000 credit institutions with 200,000 bank branches in twelve countries, most of which have no business relations with each other. Cross-border transfers represent only 1.3% of all payments in the EU.5. At the end of 1992 the European credit sector associations set up a joint body for the standardization of cross-border transfers, the ECBS in Brussels, which works together with the Commission, the European Monetary Institute, Europay, Visa and SWIFT.6. The ESC welcomes the Commission`s intention to encourage cooperation between banks aimed at improving cross-border payment systems and asks the Commission to check under what conditions waivers from Article 85 of the EEC Treaty could be granted, similar to those in the Eurocheque agreement.7. A code of good conduct would, in particular, include a clause obliging individual banks to advise their customers on the advantages and disadvantages of various means of payment (transfer, cheque, card) including the time actually taken and the approximate costs involved. For customers the conditions must be clear and be such as to enable the offers of competing banks to be compared.8. The ESC supports the call of the European Bureau of Consumer Unions (BEUC) for a ruling on liability in the event of improper execution of mass cross-border payments. The ESC can go along with the setting-up of complaints centres in all the Member States but feels that binding EU rules on cooperation between centres or the setting-up of a European ombudsman would be unnecessary.9. The ESC considers that double charging (i.e. of both sender and beneficiary when the sender has undertaken to pay all transfer charges) is unacceptable and inadmissible. Banks interested in discovering the reasons for double charging should be given the means to carry out an investigation so that such cases were no longer repeated.10. The Commission`s study on the performance of cross-border payments should be given a wider remit in order that it might be more representative and its pronouncements carry greater weight. In particular, it should not just consider schematically four banks in the larger and two in the smaller Member States nor simply investigate the fastest possible performance of 1,000 transfers of ECU 100 each.1. Preliminary remarks 1.1. Under pressure from the Commission, the European credit sector associations (ECSAs) () prepared guidelines for customer information on cross-border payments which, after consultations with the Commission and its Payment Systems Users Liaison Group (see point 1.3) were submitted in March 1992. The Commission suggested that these guidelines be implemented by the banks by the end of 1992, obviously with an eye on the deadline for the implementation of the single market. The associations thereupon declared themselves ready to work towards having the guidelines applied by their member institutions as soon as possible. To the guidelines was appended a Commission working document entitled 'Easier Cross-Border Payments: Breaking Down The Barriers` () in which the Commission stated it would monitor the guidelines` implementation.1.2. To do this the Commission ordered a study to be carried out in February 1993 which looked at:- the quality of the written information given in 287 bank branches to customers wishing to make a cross-border payment; and- the actual performance of carrying out around 1,000 transfers of ECU 100 each between accounts with 34 banks in all Member States.1.3. The study`s findings were discussed in September and October 1993 in two Commission advisory groups:- the Payment Systems Technical Development Group (PSTDG); and- the Payment Systems Users Liaison Group (PSULG).Both advisory groups had already expressed their views on the implementation of the 1990 Commission Recommendation on the transparency of banking conditions relating to cross-border financial transactions (90/109/EEC) (). The PSULG discussed and agreed with the guidelines referred to in point 1.1.1.4. The study`s findings and the advisory groups` Opinions on them were summarized in a Communication to the Commission on Transparency and Efficiency in the Performance of Cross-Border Payments (). In this Communication the Commissioners responsible, Mr Vanni d`Archirafi and Mrs Scrivener, suggested the following line of action, which was approved by the Commission on 14 December 1993.1.4.1. The banking industry would be given a further deadline for achieving the desired results in terms of transparency and performance through self-regulation.1.4.2. The Commission would examine the progress made before August 1994 by conducting a second and definitive study in March/April 1994, which would be submitted at the end of July.1.4.3. As a precaution, a draft proposal for a Council Directive on Transparency and Performance of Cross-Border Payments would be prepared. If insufficient progress had been made in this field, the Commission would immediately initiate legislative action in the form of a Directive. A first draft proposal for such a Directive was attached to the Communication. Since April 1994 this draft Directive has been under examination by the Commission working party of government experts.1.4.4. Finally the Commission began talks in the PSULG (see point 1.3) about guidelines in which the fullest possible instructions about 'face-to-face` payments are to be laid down (). This covers cross-border payments which customers of a credit institution in a Member State arrange themselves by means of a card or cheque while they are in another Member State. It remains to be seen to what extent guidelines on what information should be given to customers before and after face-to-face payments may supplement the 'Code of Best Practice` () drawn up by the three ECSAs on 14 November 1990.1.5. The ESC has general and specific comments to make in chapters 2 and 3 below on:- the Communication to the Commission and the studies referred to in it, together with the Opinions of the PSTDG and PSULG; and- the first draft proposal for a Council Directive appended to the Communication, which is to be enacted in the light of the Opinions of the European Parliament and the Economic and Social Committee.2. General comments 2.1. The ESC welcomes the attempts of the Commission and the credit industry to improve the cross-border payments market, as regards:- the transparency of conditions; and- the speed, reliability and costs of such operations.The ESC regrets that these attempts were not undertaken earlier and that the 1990 Commission Recommendation referred to in point 1.3 has been put into effect so late.With the completion of the internal market in 1993 and the transition to an economic and monetary union by no later than 1999 scheduled by the Maastricht Treaty, cross-border payments, especially large-scale transfers of smaller amounts, are becoming increasingly important. The ESC therefore thinks it is of pressing importance that cross-border transfers become more transparent and efficient and that the steps still necessary to this end be taken soon (see point 2.9).2.1.1. According to the Banking Federation of the European Community (1991 and 1992 Annual Reports), cross-border transfers by cheque, transfer or cards totalled some 323 million in 1990 and around 398 million in 1991. This represents around 1.2% of all payments in the Community in 1990 and 1.3% in 1991 (out of 26 billion and 31 billion transactions respectively).2.1.2. The number and value of cross-border transfers of sums below ECU 2,500 have been of little significance to date. So, the banks at first hesitated to invest in standardising and automating cross-border transfers of small amounts. As a result, processing here is still comparatively labourintensive and is more expensive and slower than payments within a country.2.2. The Commission therefore thinks it only right to ensure that cross-border payments within the internal market are as quick, reliable and cheap as is the case now for payments within the same Member State. But cross-border payments are subject to different conditions from those applying to domestic payments.2.2.1. Among these are (still) differences in currency, language and even types of writing, the need to report payments abroad to the central banks and, above all, the different means of payment used. For instance, cheques used for cross-border payments may not be machine-readable (or only partially), unlike those used for domestic payments.2.2.2. Cross-border transfers are hampered above all by differences between countries in the structure and density of bank branch networks, the processing of data and in regional and national clearing arrangements within and between individual banking groups. According to the statistics of the three European banking associations (mid-1993) there are:- 2,762 commercial banks with 85,300 branches;- 1,580 savings banks with 63,800 branches; and- 10,590 cooperative banks with 55,800 branches.2.2.3. There is a need for comprehensive technical measures and the corresponding agreements in order to handle cross-border transfers between so many banks of varying size with operations ranging from the local to the inter-regional and with branch networks of varying density. It should particularly be borne in mind that very often the banks of the sender and recipient have no business relations and belong to different banking groups.2.2.4. The ESC drew attention to these factors in its Opinion of 20 March 1991 (). It will not be possible without more ado - and certainly not in the short term - for cross-border payments to become exactly like domestic payments, even though such a goal is desirable in itself. But the ESC thinks that considerable improvements in the performance of cross-border payments are both necessary and possible.2.2.5. On 17 December 1992 the ECSAs (see footnote 1) set up the ECBS (), a joint body for the standardization of cross-border transfers. The ECBS works with the Commission, the European Monetary Institute, Europay International, Visa International, the Society for Worldwide Interbank Telecommunication and the standards committees of the CEN and ISO.2.3. The ESC welcomes the Commission`s intention to discuss guidelines for customer information regarding cross-border face-to-face payments (see point 1.4.4) in the first half of 1994 with the parties represented in the PSULG (banks, consumers, commerce and SMEs).2.4. The ESC recommends that the second study on the performance of cross-border payments announced by the Commission, and referred to in point 1.4 (), be given a wider remit than the first study of February 1993 referred to in point 1.2. The second study would be more representative and its pronouncements carry greater weight if it were given a broader basis. A broader study should not be blocked because of the additional costs borne by the Commission in the field. The findings of the second study would be more representative than those of the first if the following suggestions by the ESC were taken into account:2.4.1. The study should cover more banks, and not just 34, in all twelve EU Member States. It should preferably include banks which constantly - and not just occasionally - make cross-border transfers to many EU countries for a large number of customers.2.4.2. It should include institutions in other banking categories such as regional, savings, cooperative and private postal banks, in addition to big banks. Instead of simply covering four banks in the larger and two in the smaller countries, the study`s sample should be as representative as possible. It could then reflect more accurately the importance and market share of the institutions and individual countries concerned in cross-border transfers. Otherwise, the percentages mentioned have little value.2.4.3. In connection with the study there should be an examination of the cross-border payment initiatives taken (or announced) by European banking groups, such as IBOS, Europartners or TIPANET as well as B.EPSYS and the ACH (Automated Clearing Houses) alliance, and the experiences of, for instance, the Banco Popular Español in transferring annuities on behalf of the social security institutions of several countries (Switzerland, Italy, France, Germany, Netherlands) for 1.8 million Spanish workers formerly working abroad.2.4.4. Also worth looking at by the Commission in connection with the study are the possibilities offered by banking groups with closely-knit member networks of mostly small banks with branches in all - or almost all - Member States. These banking groups use their own transfer facilities, network operators, clearing houses and 'gateways`, such as the private postal banks` 'Euro-Giro` or the savings banks` 'Eufiserv`. Within these networks, and thanks to their common institutions, they can avoid correspondent banks and make direct payments to accounts with members institutions in other countries.2.4.5. Instead of just considering schematically the fastest possible performance of 1,000 transfers of ECU 100 each, the study should also look at how long transfers take when the sender is more interested in cheapness than speed. Finally, as well as ECU 100 transfers, the study should investigate cross-border transfers for sums of ECU 1,000-3,000 made by both private households and smaller businesses.2.5. The ESC welcomes the Commission`s intention to encourage useful forms of cooperation between banks aimed at improving cross-border payment systems. It asks the Commission to check first under what conditions the competition rules in Article 85 et seq. of the EEC Treaty would be applicable, by analogy with the waivers granted under the Eurocheque agreement.2.6. Cross-border payment systems can only be based on the principle of agreement between all the institutions involved. In Annex C of its working document of March 1992 () the Commission itself declared that cross-border payment services could not be provided efficiently without agreements.2.6.1. Without agreements it is not possible to make large numbers of payments via several institutions in both the sender`s and recipient`s countries on terms known in advance, because not all the institutions involved have business relations with each other. Such agreements must cover technical specifications and banking standards. Cross-border payment procedures and the calculation of costs and fees must also be the subject of common accord. Only joint agreements make it possible to work out flat-rate fees which are independent of the distance between the countries and locations of the sender and the beneficiary.2.6.2. Equally, the desired transparency of the conditions which are to be the subject of customer information is only possible on the basis of agreements. And if the various cross-border payment systems are to be mutually accessible - and therefore accessible to the customers of other banking groups - agreements must also be concluded between these systems and with the credit card companies, which operate worldwide.2.6.3. The Commission has defended the following principles since its Decision of 10 December 1984 on the Eurocheque Agreement ().2.6.3.1. Agreements between institutions on the fees to be charged to clients are incompatible with Article 85 of the EEC Treaty.2.6.3.2. Exceptions can be made for interbank agreements on the fees to be charged between institutions under Article 85(3). According to the Commission () exceptions are justified if the agreements bring about an improvement for customers and if only maximum rates are laid down for fees and these rates may be undercut by the banks in competition with each other. Under no circumstances may the maximum rates be systematically applied across-the-board and passed on to customers.2.6.4. Exceptions have already been made under Regulation No. 17 for interbank charges on Eurocheques. Such exceptions under Article 85 seem all the more justifiable in the case of largescale cross-border payments involving thousands of mainly smaller institutions which are not all linked together in their business relations. An agreement on maximum charges for interinstitutional business would give the network operator a base for calculating how to offset some of his costs within a payments system embracing a multitude of countries, banks, means of payment, gateways and settlement houses. The ESC asks the Commission to consider these arguments with regard to cross-border payments systems which compete with each other in offering services to their customers. The Commission has already considered this matter in Annex C, paragraph 3C, of its working document of March 1992 ().2.7. Subject to the study being widened as recommended in point 2.4.1, the ESC agrees with the following criteria for measuring progress in the performance of cross-border payments.2.7.1. As regards the requirement that full written customer information in accordance with the guidelines set out in point 1.1 must be provided in at least two-thirds of the branches of the banks surveyed, it should be borne in mind that there are some 200,000 bank branches in the 12 Member States. The constant provision of written customer information in such a big branch network should mean that this information is available to customers on demand. Account should also be taken in this part of the survey of verbal information and advice given to customers by bank staff.2.7.2. Double charging (i.e. of both sender and beneficiary) is unacceptable and inadmissible. In accordance with the criteria laid down the Commission would only consider progress to have been made in cross-border transfers if double charging occurred in less than 10% of cases. It would be more realistic for the evaluation of the study to relax this criterion to 25% of all cases. Banks interested in discovering the reasons for double charging should be given the means to carry out an investigation so that such cases were no longer repeated. Double charging should be defined as follows: charging both the sender and the beneficiary for the performance of a cross-border payment even though the sender has given instructions that all transfer costs are to be borne by him alone and these instructions have been accepted by the sender`s bank.2.7.3. A cross-border transfer should be considered to have been performed on time if the deadline agreed with the customer is not exceeded. The processing of a payment order no later than one working day after the day on which it is received should be subject to the entry of the amount of the payment itself.2.8. The ESC supports the call of the European Bureau of Consumer Unions (BEUC) for a ruling on liability in the event of improper execution of mass cross-border payments. The ESC understands the Commission`s Recommendation of February 1990 on the setting-up of complaints centres. In its Opinion of 20 March 1991 () the ESC had already spoken of the success of such centres in Belgium. The complaints centres set up in the Member States could work together informally at European level (see point 3.7.3). Customers could then apply to a complaints centre in their own country, which could contact complaints centres in the beneficiary`s country for an explanation.2.9. The ESC prefers a code of good conduct to a directive. The ECSAs` guidelines referred to in point 1.1. amount largely to such a code. The users of cross-border payment systems represented on the Commission`s PSULG (consumers, commerce and SMEs) were consulted on these guidelines. The guidelines could be further developed into a code or charter in which the provider of cross-border payment services would have to assume certain obligations. For instance, the obligations in Article 4 of the draft proposal for a Directive (point 3.3.4) would be better regulated in a code or charter. The idea of a charter is particularly supported by the Commissioner responsible for consumer protection, Christiane Scrivener (). In her view such a charter would be signed by the ECSAs, consumer associations and the Commission. To this extent it would be a binding charter and a charter that the public has heard of.2.9.1. The self discipline of a code of good conduct would, in particular, include individual banks having to advise their customers on the advantages and disadvantages of various means of payment (transfer, cheque, card) including the time actually taken by these means and the approximate costs involved. For customers the conditions must be clear and it must be possible to compare the offers of competing banks. Since more and more customers have accounts with several banks, competition will make for greater transparency.2.9.2. If a Directive is proposed at all it should be limited to setting out a very general framework. A European Directive which imposes detailed binding conditions on banks for crossborder transfers could bring consumers more disadvantages than advantages. It is to be feared that many, above all smaller, banks would then simply refuse orders for cross-border transfers because they would be unable (or unwilling) to comply in advance with the obligations laid down in detail in the Directive.2.9.2.1. Such orders for transfers could be refused on principle, especially transfers to beneficiaries in areas situated far from financial centres or to accounts with small local banks. This could give rise to significant gaps in a Europe-wide, all-embracing cross-border transfers market.2.9.2.2. According to the Commission`s study of February 1993 some 7,800 of the total of some 10,000 credit institutions in the 12 Member States are active in cross-border transfers, i.e. less than 80%. This figure could fall sharply if cross-border transfers were made subject to detailed legislation. That would be the very opposite of what the Commission, the credit industry and customers want.2.9.3. The gaps which might arise in a Europe-wide, all-embracing cross-border transfers market if a Directive were introduced could at best be filled by the public postal services. Only the public postal services, as part of the public sector, could, and indeed would have to, accept orders for cross-border payments at any branch, and indeed would have to meet all the obligations relating to these operations which would be regulated in detail in a European Directive. In this connection cash-carrying postmen could make payments to beneficiaries in isolated areas who do not have an account.2.10. The specific comments which follow in chapter 3 will state the ESC`s position on the proposed Directive which the Commission took the precaution of announcing in its Communication of December 1993.3. Specific comments 3.1. If the Commission decides to send the Council a proposal for a Directive on the transparency and efficiency of cross-border payment systems, this should only lay down minimum requirements for the whole EU. The ESC is pleased that Article 1(3) leaves it up to the Member States to enact, where appropriate, additional provisions in which the structure of the credit industry and the special features of cross-border transfers can be taken into account. The Commission has justified the initiatives it has taken since 1990 by stating that the large-scale transfer of small amounts should be encouraged. This aim is not expressly mentioned in the draft of the proposal for a Directive. Neither is the scope limited exclusively to cross-border transfers of small amounts on a large scale (see point 3.2).3.2.Scope (Article 2)It should be made clear that the proposed Directive is designed for large-scale crossborder transfers of small amounts, and not for the larger amounts involved in traditional foreign trade, which are now already sent via SWIFT (Society for Worldwide Interbank Financial Telecommunication). The fourth recital stresses the need to make a distinction between cross-border transfers of large sums and transfers of large numbers of small sums. But mention is simply made of a threshold of ECU 10,000, above which cross-border payments have to be reported for statistical purposes in many Member States. Moreover, in Article 7(2) payments over ECU 10,000 are exempted from the refund obligation. If this upper limit is to be used - even if only implicitly - as a definition for large-scale transfers of smaller amounts, it should be made clear that the Directive would apply to transfers by private households and small and medium-sized enterprises (SMEs).3.2.1. It should also be made clear that the Directive does not apply to cross-border transfers in non-EU countries.3.2.2. The Directive should apply not only to credit institutions within the meaning of Article 1 of Directive 77/780/EEC () but also to other institutions which perform cross-border payments as part of their professional duties, such as credit card companies. It should include all means of payment such as transfers and cheques and all processes such as standing orders or POS (point of sale) debiting. It therefore seems advisable for Article 2d to mention Eurocheque cards and credit cards, since these plastic cards are increasingly being used across borders for 'tele-shopping` and mail orders, especially in frontier areas.3.2.3. Credit institutions which cannot make cross-border payments (or which do not wish to do so because of the terms of the proposed Directive) should be excluded from its scope, especially from Article 3.3.3.Transparency (Articles 3 and 4)3.3.1. The written information which must be given to customers before a cross-border transfer is made largely corresponds to the voluntary obligation which was taken over by the member institutions of the three big European credit industry associations in their guidelines of March 1992 (neither the public postal banks nor the British building societies belong to any of the ECSAs).3.3.2. An important complement to the written information is the verbal advice normally given by most banks to customers about the most advantageous way for them to make a cross-border transfer. On the basis of such advice customers can decide, for example, to make out a Eurocheque to a beneficiary for small amounts or accept a longer delivery time for non-urgent payments so as to avoid the higher costs of a 'premium speed service`.3.3.3. Some information about a cross-border transfer, especially in remote regions, cannot be given to a customer in advance with absolute certainty. Such matters, especially about exact delivery time, cannot therefore be covered by a European Directive.3.3.3.1. In many cases, when an order is given, the bank can only give the customer an estimated delivery time for payment based on experience. Very often cross-border transfers involve several successive banks which have no business relations with the sender`s bank (see point 2.2.1.2). In 'network to network` transfers in particular (i.e. to an account with a branch of a bank from another banking group) the sender`s bank possibly has no experience in the rapid forwarding of funds abroad or in how to use foreign clearing systems. So, customers cannot be given a binding figure for the exact time taken before the amount is credited to the beneficiary`s account. The second indent should therefore read: 'the approximate time`.3.3.3.2. The sender can only be told in advance the value date of the debit from his account, not the date on which the beneficiary`s account is credited.3.3.3.3. It seems obvious that the customer should be notified in advance of the exchange rate for a cross-border transfer. However, some currencies can undergo massive exchange rate fluctuations. This was shown particularly in autumn 1992 and again in 1993. Since 2 August 1993 parities in the EMS exchange rate mechanism can each fluctuate 15% above or below their central rates. It would therefore be a good idea to tell the customer the current exchange rate when the order is given and indicate it on a notice alongside the counters. However, conversion rates cannot be given in printed brochures and other written information for customers because it would soon be out of date. At any event, this would have to be pointed out to customers, who expect written information to include the exact exchange rate.3.3.3.4. The beneficiary should be told the exchange rate used if conversion is not carried out until the payment reaches his country. It is not necessary to inform the beneficiary about the exchange rate if it was agreed to transfer a given amount in the currency of his country, as is normally the case. In these cases, the beneficiary does not need to know the amount paid by the sender in his currency, especially as the sender may possibly have been granted special terms which are covered by banking secrecy. However, the beneficiary can rightfully expect to be told the name of the sender and the purpose of the payment.3.3.4. As regards information for the sender after a cross-border transfer, most banks comply with the industry guidelines of March 1992. This means that senders receive the evidence referred to in Article 4 about the performance costs charged with a listing of fees, commissions and taxes and an exchange rate statement, which according to the February 1993 study happened in over 80% of cases.3.3.5. In cases where the sender also bears performance costs in the beneficiary`s country, these should be communicated to the beneficiary with the proof of payment. The February 1993 study shows that this is clearly not always the case. Banks should therefore take care to ensure that when a cross-border payment is forwarded the sender`s wish to pay the costs charged by the beneficiary`s bank is also passed on to the various institutions involved.3.4.Obligations to execute in good time (Article 5)3.4.1. The ESC supports the wish that a cross-border transfer should be performed as quickly as possible unless the sender agrees otherwise. This seems in any case to be normal banking practice.3.4.2. There are reservations about the deadline of six working days laid down in Article 5. Some cross-border transfers are not made directly between two correspondent banks in major financial centres, as would ideally be the case. Take, for example the cases where the sender and/or beneficiary are based in areas away from the financial centres and have accounts with branches of small local or regional banks. In these cases several institutions from the same banking group - or even from another group - often have to be involved; not all of them have business relations with each other. This means:3.4.2.1. Transfers can take much longer if they have to go through several parties (e.g. from the branch of a local bank in the sender`s country to another regional or national institution with correspondents in the beneficiary`s country and then on again through a national or regional institution to a local institution and its branch).3.4.2.2. In the beneficiary`s country there are often foreign banking groups with which the sender`s bank has no business relations. The latter then has no more influence on the execution of payment in the other country or on any omissions which may arise there.3.4.2.3. A further consequence is that a bank involved in the transaction cannot be obliged to ensure payment no later than the working day following receipt of the order when it itself has not yet been credited with the payment. On the contrary, it must be left up to this bank to decide whether or not to take the risk and pay out the money before it has received cover itself from the foreign bank.3.4.3. According to the February 1993 study, a cross-border transfer takes 3.2 days on average if one counts the time taken between the debiting of the sender`s account and the crediting of the beneficiary`s account, and 4.6 days if one counts the time taken between the sender placing his order and the crediting of the beneficiary`s account. This result can already be regarded as satisfying even if it is largely made up of the present large number of direct transfers between correspondent banks in the major financial centres. The banks use the 'value` definition for calculating the time taken for a transfer, which is important in the case of larger amounts because of the losses or gains of interest involved. The Commission, however, thinks it better to count the time taken from the giving of the order. The ESC supports this method, which is also contained in the UNCITRAL framework provisions.3.4.4. A binding deadline for cross-border transfers seems inadvisable, for the reasons given in point 3.4.2. Even the Commission`s Legal Framework Group doubts that such conditions are necessary (point 19 of the Report of the Legal Framework Group and XV 154/93 of 3 December 1993).3.4.5. If a binding deadline is introduced, many banks - especially smaller ones - may simply refuse to accept transfer orders when they themselves have no say in the execution of payment by foreign banks in another country.3.5.Obligation to execute in accordance with the payment order (Article 6)3.5.1. In cross-border transfers each party has so far normally (in 94% of all cases) paid his own bank charges (the so-called SHARE regulation). But the proposed Directive will aim to make it the general rule for the sender to bear all costs so that the beneficiary is credited with the full value of the transfer without deductions. This so-called OUR regulation (all costs to sender) is becoming increasingly important in smaller transfers. New payment networks such as TIPANET or the ACH (automated clearing houses) alliance are based on, or are due to be based on, the OUR regulation.3.5.2. The February 1993 study only looked at 'OUR regulation` cross-border transfers. It emerged that in 43% of cases the beneficiary also had to pay charges even though the sender had specifically agreed with his credit institution to pay all costs and have the beneficiary credited with the full amount without deductions (see point 2.7.2). In the event of such 'double charging` the sender`s bank should refund this 'unjustified charge` to the sender, in accordance with Article 6(2), and forfeit the fee originally charged to him, even if the beneficiary`s bank is the sole party responsible. For the sender, who can only hold his own bank liable, such a rule seems understandable. But for the sender`s bank such a wide-ranging liability seems unreasonable in view of the conditions mentioned in points 2.2.2, 2.2.3 and 3.4.2, at least if the beneficiary`s bank is insolvent.3.5.3. For reasons of confidentiality the European credit industry`s associations were not allowed to see the data for the February 1993 study. So they still do not know the reasons for the reported cases of double charging.3.5.4. The Commission should ensure that the second, 1994 study referred to in point 1.4 gives exact details of any cases of double charging. The credit industry could then investigate these cases, which are quite contrary to normal banking practice but which might have been caused by incomplete or even incorrect information from the sender. Article 6(2) should therefore, as a precaution, make an exception in the event of any contributory negligence on the part of the sender.3.6.Obligation of institutions to refund in case of failed transfers (Article 7)3.6.1. Article 7(1) lays down that if the transfer is not properly completed by the sum being credited to the beneficiary`s account, the sender`s bank must refund the full amount of the transfer plus fees to the sender. For the sender`s bank this would introduce the concept of no-fault liability. On the other hand, the sender`s bank is entitled to claim a refund from the other institutions involved in the payment chain which have not carried out instructions properly. But the refund is by no means so certain as to offset the no-fault liability completely.3.6.2. Article 7(2) lays down that the refund can be applied for no earlier than 20 working days after the date on which the cross-border transfer should have been made. Even with this time limit it is conceivable that the sender will get his money back, even though the beneficiary has been credited with payment in the meantime and has the sum at his disposal.3.6.3. It is not clear to what extent the refund obligation applies in the event of force majeure. In Article 7(2)(j) reference is made to the definition of force majeure in Directive 90/314/EEC (). It should be made clear whether the refund obligation still applies if the beneficiary`s bank declares a moratorium or if bankruptcy proceedings are initiated before it can credit the transfer to the beneficiary. Such cases would obviously not be regarded as force majeure, at any rate not for amounts of less than ECU 10,000.3.7.Complaints centres (Article 8)3.7.1. For customer complaints which are not resolved by the institutions concerned independent complaints centres are to have competence in all matters, in accordance with Article 8(3). Depending on the prevailing principle of subsidiarity within a country the centres may be set up either by the banks themselves or by the central banks or authorities in the Member States.3.7.2. As the complaints centres cannot be part of the legal system, it seems to be going too far to tell Member States in a European Directive [as in Article 8(5)] that they have to see that the decisions of the complaints centres are published regularly.3.7.3. Cross-border cooperation between complaints centres may be a good idea. Customers could then apply to a complaints centre in their own country, which could then get in touch with centres in the beneficiary`s country. For such cooperation between centres, and for the setting-up of a European ombudsman, binding EU rules would be unnecessary.Done at Brussels, 6 July 1994.The Presidentof the Economic and Social CommitteeSusanne TIEMANN() The Banking Federation of the European Community, the European Savings Banks Group and the Association of Cooperative Banks of the EC.() SEC(92) 621, 17. 3. 1992.() SEC(93) 1968.() See Commission document XV/106/94.() Code of Best Practice of the European Banking Industry on Card-Based Payment Systems (doc. 135/90).() ESC Opinion on the discussion paper on payments in the internal market (OJ No C 120, 6. 5. 1991).() ECBS: European Committee for Banking Standards/Comité Européen de Normalisation Bancaire/Europäischer Ausschuß für Bankstandards Secretariat: Place Jamblinne de Meux 34/35, B 1040 Brussels.() Invitation to tender 94/C 09, OJ No C 515, 7. 1. 1994; this study should not be confused with that on the cross-border payments services offered by large credit institutions, which was requested by the Commission`s consumer policy department from Mr Bruno Dupont.() SEC(92) 621, 17. 3. 1992; see also the Report of the European Commission on Competition Policy (COM(94) 161 fin, 5. 5. 1994) chapter III, 119 and 120.() See C.D. Ehlermann in the Quarterly Review of European Law 3/1993, p. 457 et seq. and 'The Vanni d`Archirafi Doctrine` in European Institutions and Finance, No 1a (March 1994), p. 2.() SEC(92) 621, 17. 3. 1992.() ESC Opinion on the discussion paper on payments in the internal market (OJ No C 120, 6. 5. 1991).() See contribution of Christiane Scrivener to the colloquium on cross-border payments in Paris on 1 March 1994.() OJ No L 67, 15. 3. 1990, p. 39.() OJ No L 35, 7. 2. 1985, p. 43.() OJ No L 322, 17. 12. 1977.() OJ No L 158, 23. 6. 1990, p. 59.