Regulation (EC) No 2560/2001 of the European Parliament and of the Council of 19 December 2001 on cross-border payments in euro
Date: 2001-12-19
Institutions: Council of the European Union, European Parliament
Subjects: bank charges, consumer information, credit transfer, euro, euro area, frontier region

28.12.2001

EN

Official Journal of the European Communities

L 344/13

REGULATION (EC) No 2560/2001 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 19 December 2001

on cross-border payments in euro

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 the Economic and Social
Committee (2),

pean Central Bank of 3 April 2001 on the preparations
for the introduction of euro notes and coins announced
that
the
the Commission would consider using all
instruments at its disposal and would take all the steps
necessary to ensure that the costs of cross-border trans-
actions were brought more closely into line with the
costs of domestic transactions, thus making the concept
of the euro zone as a ‘domestic payment area’ tangible
and transparently clear to citizens.

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

(4)

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

Whereas:

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

(1)

(2)

credit

sought

to make

cross-border

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
was to enable in particular consumers and small and
medium-sized enterprises
transfers
the
rapidly, reliably and cheaply from one part of
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 trans-
fers, and that the average cost of cross-border credit
transfers has hardly changed since 1993 when a
comparable study was carried out.

The Commission's Communication to the European
Parliament and 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 Communication to the European
the Economic and Social
Parliament,
Committee, the Committee of the Regions and the Euro-

the Council,

(1) OJ C 270 E, 25.9.2001, p. 270.
(2) Opinion delivered on 10 December 2001 (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 (OJ C 363, 19.12.2001, p. 1) and Decision of the
European Parliament of 13 December 2001.

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

(5)

(6)

(7)

(8)

is growing
The volume of cross-border payments
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.

that

The fact
the level of charges for cross-border
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
in order to
affect confidence in the euro. Therefore,
facilitate the functioning of the internal market,
it is
for cross-border
necessary to ensure that charges
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.

transactions

For cross-border electronic payment
in
euro, the principle of equal charges should apply, 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 trans-
itional period for cross-border credit transfers should
apply until 1 July 2003.

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.

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Official Journal of the European Communities

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(9)

(10)

(11)

(12)

(13)

(14)

(15)

In order to allow a customer to assess the cost of a
cross-border payment,
is necessary that he be
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.

it

This Regulation does not affect the possibility for institu-
tions to offer an all-inclusive fee for different payment
this does not discriminate
services, provided that
between cross-border and national payments.

institutions.

It is also important to provide for improvements to
facilitate the execution of cross-border payments by
payment
In this respect, standardisation
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 auto-
mated processing of cross-border credit transfers. The
widest use of these codes is considered to be essential. In
addition, other measures which entail extra costs should
be removed in order to lower the charges to customers
for cross-border payments.

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

it

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 institution or between the beneficiary and his
institution, where applicable using existing procedures.

is desirable that not

It
later than 1 July 2004 the
Commission should present a report on the application
of this Regulation.

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.

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

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) ‘cross-border payments’ means:

(i) ‘cross-border credit transfers’ 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) ‘cross-border electronic payment transactions’ being:

— the cross-border transfers of

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

— 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 to accept the payment instru-
ment,

(iii) ‘cross-border cheques’ being those paper cheques
defined in the Geneva Convention providing uniform
laws for cheques of 19 March 1931 drawn on an
institution located within the Community and used for
cross-border transactions within the Community;

(b) ‘electronic payment

instrument’ means a remote access
payment instrument and electronic money instrument that
enables its holder to effect one or more electronic payment
transactions;

(c) ‘remote access payment instrument’ 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 trans-
fers;

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

(e) ‘institution’ means any natural or legal person which, by

way of business, executes cross-border payments;

(f) ‘charges levied’ 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 transac-
tions 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

Article 4

Transparency of charges

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

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

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 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

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

2.
The customer shall, upon request, communicate to the
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

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.

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

Article 7

Compliance with this Regulation

Compliance with this Regulation shall be guaranteed by effec-
tive, 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,
— changes in cross-border payment system infrastructures,
services by
— the
strengthening the conditions of competition in the provi-
sion of cross-border payment services,

improving consumer

in particular on:

advisability of

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Official Journal of the European Communities

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— the impact of the application of this Regulation on charges levied for payments made within a Member

State,

— 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.

This report shall be accompanied, where appropriate, by proposals for amendments.

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 Brussels, 19 December 2001.

For the European Parliament

The President

N. FONTAINE

For the Council

The President

A. NEYTS−UYTTEBROECK