Proposal for a Regulation of the European Parliament and of the Council on cross-border payments in euro
Date: 2001-07-26
Institutions: European Commission
Subjects: consumer information, consumer protection, credit transfer, dissemination of EU information, euro, financial institution, financial transaction, frontier region, paper money

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Official Journal of the European Communities

25.9.2001

Proposal for a regulation of the European Parliament and of the Council on cross-border payments
in euro

(2001/C 270 E/33)

COM(2001) 439 final (cid:151) 2001/0174(COD)

(Submitted by the Commission on 9 August 2001)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 95(1) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of
Committee,

the Economic and Social

Having regard to the opinion of the European Central Bank,

Acting in accordance with the procedure laid down in Article
251 of the Treaty,

Whereas:

(1) Directive 97/5/EC of

the European Parliament and the
Council of 27 January 1997 on cross-border
credit
transfers (1) sought to improve cross-border credit transfer
services and notably their efficiency. The aim was to enable
in particular consumers and small and medium-sized enter-
prises to make credit transfers rapidly, reliably and cheaply
from one part of the Community to another. Such credit
transfers and cross-border payments in general are still
extremely expensive compared to payments at national
level.

(2) The Commission’s Communication to the European
Parliament and Council of 31 January 2000 on Retail
Payments in the Internal Market (2),
together with the
European Parliament Resolutions of 26 October 2000 on
the Commission Communication and of 4 July 2001 on
means to assist economic actors in switching to the euro,
and the reports of the European Central Bank of September
1999 and September 2000 on improving cross-border
payment services have each underlined the urgent need
for effective improvements in this field.

and

the Council,
the
the Committee of

(3) The Commission’s Communication to the European
Economic
Social
Parliament,
Committee,
the Regions and the
European Central Bank of 3 April 2001 on the prep-
arations for the introduction of euro notes and coins (3)
announces that
the Commission will consider using all
the instruments at its disposal and will take all the steps
necessary to ensure that the costs of cross-border trans-
actions are brought more closely into line with the costs
of domestic transactions on 1 January 2002.

(1) OJ L 43, 14.2.1997, p. 25.
(2) COM(2000) 36 final.
(3) COM(2001) 190 final.

(4) The volume of cross-border payments is growing steadily
as completion of the Internal Market takes place. In this
area without borders, payments have been further
facilitated by the introduction of the euro.

than the level of charges for

(5) If the level of charges for cross-border payments in euro
remains higher
internal
payments, the confidence of consumers and businesses in
the euro will be damaged. Therefore, in order to facilitate
the functioning of the internal market, it is necessary to
ensure that charges for cross-border payments in euro are
treated in the same way as charges for payments made in
euro within a Member State.

(6) For cross-border payments in euro up to EUR 50 000
the principle of
which can be executed electronically,
In
equal charges should apply from 1 January 2002.
order to allow the implementation of the necessary infra-
structure and conditions, a transitional period for cross-
border credit
transfers and cheques should apply until
1 January 2003.

(7) In order to allow a customer to assess the cost of a cross-
border payment, it is necessary that he is informed of the
charges applied and any modification to them. The same
holds for the case that a currency other than the euro is
involved in the cross-border euro-payment transaction.

(8) It

execution of

improvements

to provide for

to
is also important
cross-border payments by
the
facilitate
respect,
standardisation
payment
In this
institutions.
should be promoted as regards,
in particular, the use of
the International Bank Account Number (IBAN) and the
Bank Identifier Code
automated
processing of cross-border credit transfers. The widest use
of these codes is considered to be essential. In addition,
other measures which entail
should be
removed in order to lower the charges to customers for
cross-border payments,

(BIC) necessary for

extra

costs

HAVE ADOPTED THIS REGULATION:

Article 1

Subject matter and scope

This Regulation lays down rules on cross-border payments in
euro in order to ensure that charges for those payments are the
same as those for payments in euro involving no crossing of
borders.

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shall apply to cross-border payments

It
EUR 50 000 within the Community.

in euro up to

Article 3

Charges for cross-border payments

Article 2

Definitions

For the purposes of this Regulation, the following definitions
shall apply:

(a)

(cid:145)cross-border payments(cid:146) means:

(i) (cid:145)cross-border credit transfers(cid:146) being transactions carried
out on the initiative of an originator via an institution
or its branch in one Member State, with a view to
making available an amount of money to a beneficiary
at an institution or its branch in another Member
State; the originator and the beneficiary may be one
and the same person,

(ii) (cid:145)cross-border electronic payment transactions(cid:146) being:

(cid:151) the transfers of funds effected by means of an elec-
than those

tronic payment
instrument, other
ordered and executed by institutions,

instrument

(cid:151) cash withdrawals by means of an electronic
(and
and
payment
unloading) of an electronic money instrument at
cash dispensing machines and automated teller
machines at the premises of the issuer or an insti-
tution under contract
the payment
instrument,

to accept

loading

the

(iii) (cid:145)cross-border cheques(cid:146) being those cheques defined in
the Geneva Convention providing uniform laws for
cheques of 19 March 1931 and used for cross-border
transactions within the Community;

(b) (cid:145)electronic payment

instrument(cid:146) means a remote access
instrument and electronic money instrument
payment
that enables its holder to effect one or more electronic
payment transactions;

(c)

(cid:145)remote access payment instrument(cid:146) means an instrument
enabling a holder to access funds held on his/her account
at an institution, whereby payment may be made to a
identification
payee and normally requires a personal
code and/or any other
identity. The
similar proof of
remote access payment instrument includes in particular
payment cards (whether credit, debit, deferred debit or
charge cards) and cards having phone- and home-banking
applications;

(d) (cid:145)electronic money instrument(cid:146) means a reloadable payment
instrument, whether a stored-value card or a computer
memory, on which value units are stored electronically;

(e)

(cid:145)institution(cid:146) means any natural or legal person which, by
way of business, executes cross-border payments;

1. With effect from 1 January 2002, charges levied by an
institution in respect of cross-border electronic payment trans-
actions in euro up to EUR 50 000 shall be the same as the
charges levied by the same institution in respect of corre-
sponding payments transacted within the Member State in
which the establishment of that institution executing the cross-
border electronic payment transaction is located.

and

cross-border

2. With effect from 1 January 2003 at the latest, charges
levied by an institution in respect of cross-border credit
transfers
to
EUR 50 000 shall be the same as the charges levied by the
same institution in respect of corresponding credit transfers
and cheques transacted within the Member State in which
the establishment of that institution executing the cross-border
transfer or cross-border cheque is located.

cheques

euro

up

in

Article 4

Transparency of charges

1.
An institution shall make available to its customers in a
readily comprehensible form, either in writing or, where appro-
priate, by electronic means, prior information on the charges
levied for cross-border payments and for payments effected
within the Member State in which its establishment is located.

Any modification of the charges shall be communicated
2.
in the same way as indicated in paragraph 1 in advance of the
date of application.

3. Where institutions levy charges for exchanging currencies
into and from euro, institutions shall provide their customers
with:

(a) prior information on the exchange charges which they

propose to apply; and

(b) specific information on the exchange charges which have

been applied.

Article 5

Measures for facilitating cross-border payments

1.
An institution shall, upon request, communicate to a
customer his International Bank Account Number (IBAN) and
that institution’s Bank Identifier Code (BIC).

For cross-border credit transfers, a customer shall, upon
2.
request, communicate to the institution carrying out
the
transfer the IBAN of the beneficiary and the BIC of the bene-
ficiary’s institution.

(f)

(cid:145)charges levied(cid:146) means any charge levied by an institution
and linked to a cross-border payment operation, excluding
those levied to cover a foreign exchange transaction.

An institution shall indicate on statements of account of

3.
each customer his IBAN and the institution’s BIC.

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Any supplier intending to sell goods and services cross-
4.
border to customers in the Community shall communicate his
IBAN and the BIC of his institution.

2. Member States shall remove with effect from 1 January
2002 at the latest any national obligations as to the minimum
information concerning the data of
the beneficiary which
prevent automation of payment execution.

Article 6

Obligations of the Member States

Article 7

Entry into force

1. Member States shall remove with effect from 1 January
2002 at the latest any national reporting obligations for cross-
border payments up to EUR 12 500 for balance-of-payment
statistics. With effect from 1 January 2004, the amount shall
be increased to EUR 50 000.

This Regulation shall enter
into force on the third day
following that of its publication in the Official Journal of the
European Communities.

This Regulation shall be binding in its entirety and directly
applicable in all Member States.