Common Position (EC) No 41/2001 of 7 December 2001 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to adopting a regulation of the European Parliament and of the Council on cross-border payments in euro
Date: 2001-12-07
Institutions: Council of the European Union
Subjects: credit transfer, electronic money, euro, financial transaction, frontier region, payment

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Official Journal of the European Communities

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I

(Information)

COUNCIL

COMMON POSITION (EC) No 41/2001

adopted by the Council on 7 December 2001

with a view to adopting Regulation (EC) No . . ./2001 of the European Parliament and of the
Council of . . . on cross-border payments in euro

(2001/C 363/01)

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 (1),

Having regard to the opinion of
Committee (2),

the Economic and Social

Having regard to the opinion of the European Central Bank (3),

Acting in accordance with the procedure laid down in Article
251 of the Treaty (4),

Whereas:

sought

to make

cross-border

reliably and cheaply from one part of

(1) Directive 97/5/EC of the European Parliament and of the
Council of 27 January 1997 on cross-border credit
transfers (5)
credit
to improve
transfer services and notably their efficiency. The aim
in particular consumers and small and
was to enable,
medium-sized
transfers
enterprises
the
rapidly,
Community to another. Such credit transfers and cross-
border payments in general are still extremely expensive
compared to payments at national level. It emerges from
the findings of a study undertaken by the Commission
and released on 20 September 2001 that consumers are
given insufficient or no information on the cost of
transfers, and that
the average cost of cross-border
credit transfers has hardly changed since 1993 when a
comparable study was carried out.

credit

(1) OJ C 270 E, 25.9.2001, p. 270.
(2) Opinion delivered on . . . (not yet published in the Official Journal).
(3) OJ C 308, 1.11.2001, p. 17.
(4) Opinion of the European Parliament of 15 November 2001 (not yet
published in the Official Journal), Council Common Position of 7
December 2001 and Decision of the European Parliament of . . .
(not yet published in the Official Journal).

(5) OJ L 43, 14.2.1997, p. 25.

(2) The Commission’s

communication to the European
Parliament and to the Council of 31 January 2000 on
retail payments in the internal market, 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.

(3) The Commission’s

the Economic

the Council,
the Committee of

communication to the European
and 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
announced that the Commission would consider using
all the instruments at its disposal and would take all the
steps necessary to ensure that the costs of cross-border
transactions were brought more closely into line with the
costs of domestic transactions, thus making the concept of
the euro zone as a (cid:145)domestic payment area(cid:146) tangible and
transparently clear to citizens.

(4) Compared with the objective that was reaffirmed when
euro book money was introduced, namely to achieve, if
not uniform, at least similar charge structures for the
euro, there have been no significant results in terms of
reducing the cost of cross-border payments compared to
internal payments.

(5) 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.

(6) The fact

that

for cross-border
the level of charges
payments continues to remain higher than the level of
charges for internal payments is hampering cross-border
trade and therefore constitutes an obstacle to the proper
functioning of the internal market. This is also likely to
to
affect confidence in the euro. Therefore,
is
facilitate the functioning of
necessary
cross-border
that
payments in euro are the same as charges for payments
made in euro within a Member State, which will also
bolster confidence in the euro.

the internal market,
for
charges

in order
it

to ensure

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should apply,

(7) For cross-border electronic payment transactions in euro,
the principle of equal charges
taking
account of the adjustment periods and the institutions’
extra workload relating to the transition to the euro, as
from 1 July 2002. In order to allow the implementation
of the necessary infrastructure and conditions, a transi-
tional period for cross-border credit
should
apply until 1 July 2003.

transfers

(8) 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.

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

(10) This Regulation does not affect the possibility for insti-
tutions of offering an all-inclusive fee for different
payment services, provided that this does not discriminate
between cross-border and national payments.

(11) It

respect,

institutions.

to provide for

is also important

improvements to
facilitate the execution of cross-border payments by
payment
standardisation
In this
should be promoted as regards, in particular, the use of
the international bank account number (IBAN) (1) and the
bank identifier code (BIC) (2) necessary for automated
transfers. The widest
processing of cross-border credit
use of
In
addition, other measures which entail extra costs should
be removed in order to lower the charges to customers for
cross-border payments.

these codes is considered to be essential.

(12) To lighten the burden on institutions that carry out cross-
border payments, it is necessary to gradually remove the
obligations concerning regular national declarations for
the purposes of balance-of-payments statistics.

(13) In order to ensure that this Regulation is observed, the
Member States should ensure that there are adequate and
effective procedures for lodging complaints or appeals for
settling any disputes between the originator and his insti-
tution or between the beneficiary and his institution,
where applicable using existing procedures.

(14) It is desirable that as of July 2004 the Commission should
present a report on the implementation of this Regulation.

(1) ISO standard No 13613.
(2) ISO standard No 9362.

(15) Provision should be made for a procedure whereby this
Regulation can also be applied to cross-border payments
made in a currency of another Member State where that
Member State so decides,

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 within a Member State.

shall apply to cross-border payments

It
EUR 50 000 within the Community.

in euro up to

This Regulation shall not apply to cross-border payments made
between institutions for their own account.

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 an amount of money available 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 cross-border

funds effected by
transfers of
means of an electronic payment instrument, other
than those ordered and executed by institutions,

(cid:151) cross-border cash withdrawals by means of an elec-
tronic payment instrument and the loading (and
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

(iii) (cid:145)cross-border

cheques(cid:146) being those paper

cheques
defined in the Geneva Convention of 19 March 1931
providing uniform laws for cheques drawn on an insti-
tution located within the Community and used for
cross-border transactions within the Community;

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(b) (cid:145)electronic payment

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

that a statement warning
Member States may stipulate
consumers of the charges relating to the cross-border use of
cheques must appear on cheque books.

(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 payee
and normally requires a personal identification code and/or
any other similar proof of
identity. The 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. This
definition does not include cross-border credit transfers;

(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;

(f)

(cid:145)charges levied(cid:146), means any charge levied by an institution
and directly linked to a cross-border payment transaction in
euro.

Article 3

Charges for cross-border electronic payment transactions
and credit transfers

1. With effect from 1 July 2002, charges levied by an insti-
tution in respect of cross-border electronic payment
trans-
actions in euro up to EUR 12 500 shall be the same as the
charges levied by the same institution in respect of corre-
sponding payments in euro transacted within the Member
State in which the establishment of that institution executing
the cross-border electronic payment transaction is located.

2. With effect from 1 July 2003 at the latest, charges levied
by an institution in respect of cross-border credit transfers in
euro up to EUR 12 500 shall be the same as the charges
levied by the same institution in respect of corresponding
credit transfers in euro transacted within the Member State
in which the establishment of that institution executing the
cross-border transfer is located.

3. With effect
EUR 12 500 shall be raised to EUR 50 000.

from 1 January 2006 the

amount

2.
Any modification of the charges shall be communicated
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 all the exchange charges which they

propose to apply; and

(b) specific information on the various exchange charges which

have been applied.

Article 5

Measures for facilitating cross-border transfers

An institution shall, where applicable, communicate to
1.
each customer upon request his international bank account
number (IBAN) and that institution’s bank identifier code (BIC).

The customer shall, upon request, communicate to the
2.
institution carrying out the transfer the IBAN of the beneficiary
and the BIC of the beneficiary’s institution. If the customer
does not communicate the above information, additional
charges may be levied on him by the institution. In this case,
the institution must provide customers with information on the
additional charges in accordance with Article 4.

3. With effect from 1 July 2003, institutions shall indicate
on statements of account of each customer, or in an annex
thereto, his IBAN and the institution’s BIC.

4.
For all cross-border invoicing of goods and services in the
Community, a supplier who accepts payment by transfer shall
communicate his IBAN and the BIC of his institution to his
customers.

Article 6

Obligations of the Member States

Article 4

Transparency of charges

1. Member States shall remove with effect from 1 July 2002
at the latest any national reporting obligations for cross-border
payments up to EUR 12 500 for balance-of-payment statistics.

An institution shall make available to its customers in a
1.
including, where
in writing,
readily comprehensible form,
appropriate,
in accordance with national rules, 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.

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

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Article 7

Compliance with this Regulation

(cid:151) the advisability of increasing the amount provided for in
Article 6(1) to EUR 50 000 as from 1 January 2006, taking
into account any consequences for undertakings.

Compliance with this Regulation shall be guaranteed by
effective, proportionate and deterrent sanctions.

Article 8

Review clause

Not later than 1 July 2004, the Commission shall submit to the
European Parliament and to the Council a report on the
application of this Regulation, in particular on:

(cid:151) changes in cross-border payment system infrastructures,

(cid:151) the

advisability of

improving consumer

strengthening
provision of cross-border payment services,

conditions of

the

services by
competition in the

(cid:151) the impact of the application of this Regulation on charges

levied for payments made within a Member State,

report

This
proposals for amendments.

shall be accompanied, where appropriate, by

Article 9

Entry into force

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 also apply to cross-border payments
made in the currency of another Member State when the
latter notifies the Commission of its decision to extend the
Regulation’s application to its currency. The notification shall
be published in the Official Journal by the Commission. The
extension shall take effect 14 days after the said publication.

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

Done at . . .

For the European Parliament

The President

For the Council

The President

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STATEMENT OF THE COUNCIL’S REASONS

I. INTRODUCTION

1. On 13 August 2001, the Commission submitted to the
Council the abovementioned proposal for a regulation of
the European Parliament and of the Council (1), based on
Article 95 of the Treaty.

2. The European Parliament delivered its opinion on 15

November 200 (2).

The deadline for cross-border credit transfers was put
back to 1 July 2003, in order to allow the implemen-
tation of the necessary infrastructure and conditions (see
recital 7).

B. Main innovations introduced by the Council of the

European Union

The main innovations introduced by the Council are the
following:

3. The Economic and Social Committee delivered its

opinion on 29 November 2001 (3).

(a) Taking account of other currencies

4. On 7 December 2001, the Council adopted its Common
Position in accordance with Article 251 of the Treaty.

II. OBJECTIVE

The aim of the proposal
is to reduce bank charges for
cross-border payments in euro to bring them into line
with those applying at national level, at the same time as
the introduction of euro notes and coins on 1 January
2002.

Delivering on a long-standing policy of
the European
Commission, which has been examining the operation of
payments in the European internal market since the end of
the 1980s, this text will enable European consumers to
participate actively in the internal market by ensuring
that they are able to benefit from increased price trans-
to the
parency and choice. The Regulation responds
concerns expressed by citizens in particular, and by the
European Parliament, and is also intended to bolster
confidence in the euro.

III. ANALYSIS OF THE COMMON POSITION

A. General remarks

the Council has

the
In general,
European Parliament’s amendments, accepting them in
whole or in substance.

followed most of

Like the European Parliament, the Council considered
the deadline of 1 January 2002 for electronic
that
payment
transactions should be put back to avoid
possible interference with the introduction of euro
the adjustment periods
notes and coins.
and extra workload relating to the period during
which two currencies are in circulation,
the Council
considered it appropriate to put the deadline back to
1 July 2002.

In view of

(1) OJ C 270 E, 25.9.2001, p. 270.
(2) Not yet published in the Official Journal. See 13713/010 CONSOM

104 MI 183 EF 119 ECOFIN 351 CODEC 1231.

(3) Not yet published in the Official Journal.

In response to the concerns of certain Member
States, which were anxious to ensure the proper
functioning of the internal market, provision was
made for the Member States that so wished to
extend the application of the Regulation to cross-
border payments made in the currency of another
Member State (Article 9, third paragraph).

(b) Increased transparency

Article 4 has been strengthened to ensure better
information for consumers, particularly in relation
to the cross-border use of cheques.

(c) Amounts

In view of the fact that the great majority of cross-
border payments of less than EUR 50 000 are also
less than EUR 12 500, and that the latter also serves
as a reference amount for the purposes of balance-
of-payments statistics, the Council considered that
only transactions of less than EUR 12 500 should
be covered initially. Provision was made for raising
the threshold to EUR 50 000 on 1 January 2006 as
regards Article 3.

(d) Review clause

systems,

payment

To respond to the concerns expressed by certain
Member States,
the points to which Commission
will need to pay special attention in the report
provided for
in Article 8 have been stipulated.
These points are changes in infrastructures for cross-
border
of
improving consumer services by strengthening the
conditions of competition in the provision of cross-
border payment services, and the advisability of
removing the obligation for a national declaration
for
the
possible consequences for companies into account.
Moreover,
idea underlying
European Parliament amendment 4 was reflected

amounts up to EUR 50 000,

essence of

advisability

taking

the

the

the

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in the indent on the impact of the application of the
Regulation on charges levied for payments made
within a Member State.

An in-depth study of these questions should enable
the Commission to accompany the report, where
appropriate, by proposals for amendments.

IV. CONCLUSIONS

The Council considers that the Common Position responds
to a large extent to the wishes and concerns expressed by
the European Parliament and other interested parties, and
achieves a good balance between the prerequisites for the
proper functioning of
the single market and consumer
protection/information.