Proposal for a Regulation of the European Parliament and of the Council on cross-border payments in the Community (Text with EEA relevance) {SEC(2008) 2598} {SEC(2008) 2599}
Date: 2008-10-13
Institutions: European Commission
Subjects: bank charges, consumer information, credit transfer, euro, euro area, frontier region

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 13.10.2008 
COM(2008) 640 final 

2008/0194 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on cross-border payments in the Community 

(Text with EEA relevance) 

(presented by the Commission) 

{SEC(2008) 2598} 
{SEC(2008) 2599} 

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EXPLANATORY MEMORANDUM 

1. 

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CONTEXT OF THE PROPOSAL 

Grounds for and objectives of the proposal 

The present proposal for a Regulation replacing Regulation (EC) No 2560/2001 of the 
European Parliament and the Council on cross-border payments in euro is the result 
of the review process that has been carried out by the Commission since 2005.  

The aims of this initiative are to replace the existing Regulation in order to adapt it to 
market developments (emergence of the Single Euro Payments Area), to enhance the 
protection  of  consumer  rights  and  to  provide  an  adequate  legal  framework  for  the 
development of a modern and efficient payment system within the EU. It also seeks to 
align  the  definitions  and  wording  of  Regulation 2560/2001  with  those  of  Directive 
2007/64/EC of the European Parliament and of the Council of 13 November 2007 on 
payment services in the internal market. 

The overall objective of the review of the Regulation is to achieve an Internal Market 
for payment services in euro, subject to effective competition and where there is no 
difference of regime between cross-border and national payments, thereby providing 
significant savings and benefits to the wider European economy. 

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General context 

Regulation  (EC)  No 2560/2001  of  the  European  Parliament  and  of  the  Council  on 
cross-border  payments  in  euro  entered  into  force  on  31 December 2001.  It  currently 
applies to credit transfers, ATM cash withdrawals and electronic payments (including 
card payments) made in euro up to an amount of EUR 50 000. It guarantees that when 
a consumer makes  a cross-border  payment  in  euro, the cost is the same as that of a 
corresponding payment in euro made within his own Member State. 

The  Regulation  has  in  effect  brought  down  the  charges  for  cross-border  payment 
transactions  in  euro  to  the  level  of  national  charges  and  encouraged  the  European 
payments  industry  to  build  an  EU-wide  payments  infrastructure  that  is  necessary  in 
order to create the Single Euro Payments Area (SEPA). This Regulation can therefore 
be considered as the inception of SEPA. 

Article  8  of  this  Regulation  required  the  Commission  to  produce  a  report  on  its 
application  and 
if  appropriate,  proposals  for  amendments.  The 
Commission's report COM(2008) 64 of 11 February 2008 concluded that a number of 
amendments  to  the  Regulation  should  be  proposed  to  address  the  following 
weaknesses identified during the review process:  

to  present, 

–  the need to extend the principle of equality of charges to direct debits in order to 
establish  a  level  playing  field  between  different  payment  instruments  and  avoid 
undermining  the  objectives  of  this  Regulation  by  not  making  all  electronic 
payment instruments operating cross-border subject to the principle of equality of 
charges; 

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–  enforcement  problems  due  to  the  absence  of  identified  national  competent 
authorities and of out-of-court redress bodies for disputes related to the Regulation; 

–  disruption  of  the  internal  market  in  payments  caused  by  divergent  balance-of-
payments (BoP) statistical reporting obligations and unclear scope of the article on 
BoP reporting. 

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Existing provisions in the area of the proposal 

Since  the  proposed  amendments  would  profoundly  alter  Regulation 2560/2001,  it  is 
proposed that the latter be repealed and replaced with a new Regulation. As it stands, 
Regulation 2560/2001  does  not  address  the  problems  described  above.  Moreover, 
both  the  definitions  and  wording  of  Regulation 2560  differ  from  those  used  in 
Directive 2007/64/EC and this could lead to problems of legal consistency.  

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Consistency with the other policies and objectives of the Union 

The objectives of the proposal are consistent with the policies and objectives pursued 
by  the  Union.  First,  they  will  improve  the  functioning  of  the  European  market  for 
payment  services.  Secondly,  they  broadly  support  other  EU  policies,  in  particular 
consumer  policy  (by  equalising  and  bringing  down  charges  for  cross-border  and 
national  payments  to  the  benefit  of  consumers)  and  competition  policy,  by 
establishing  equal  obligations,  rights  and  opportunities  for  all  market  players  and 
facilitating  cross-border  provision  of  payment  services,  thus  increasing  the  level  of 
competition.  They  comply  with  the  principles  of  better  regulation  and  of  reducing 
administrative burden. By facilitating economic transactions within the EU they also 
contribute  to  the  attainment  of  the  wider  objectives  of  the  Lisbon  Agenda,  i.e.  to 
foster economic growth and job creation. 

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

Consultation of interested parties 

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Consultation methods, main sectors targeted and general profile of respondents 

A survey on the impact of Regulation 2560/2001 and related issues was launched in 
June 2005.  This  survey  involved  Member  State  authorities,  financial  institutions, 
merchant  associations  and  consumer  organisations  in  all  EU  Member  States.  It  was 
followed  by  a  public  consultation  on  the  text  of  Regulation 2560/2001  and  possible 
amendments (October–December 2005).  

Regular consultations were undertaken by the Commission, involving Member States, 
the  European  Central  Bank,  financial  institutions,  consumer  organisations  and  other 
social  and  economic  partners.  The  two  consultative  committees  on  retail  payments 
(Payment Systems Market Group and Payment Systems Government Experts Group) 
were  regularly  informed  and  consulted  (in  particular  in  December 2007,  March  and 
June 2008). 

Balance  of  payments  (BoP)  reporting  issues  were  discussed  in  a  number  of  fora. 
These  included  the  Committee  on  Monetary,  Financial  and  Balance  of  Payments 

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Statistics,  Eurostat's  Balance  of  Payments  Working  Group,  and  a  high-level  Joint 
Task Force on the use of Payments Data for the Balance of Payments Statistics, set up 
by the European Central Bank (September 2007–January 2008). The subject was also 
raised in bilateral discussions with representatives of the national Central Banks of the 
Member  States  and  with  the  payment  services  industry  (the  European  Payments 
Council).  

A questionnaire was sent to the authorities (BoP compilers) of the 27 Member States 
in March 2008, asking them to assess the impact of potential changes on the balance 
of  payments  reporting  requirements,  to  indicate  their  future  plans  concerning  the 
collection of statistical data and to provide estimates of costs if changes were to prove 
necessary.  

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Summary of responses and how they have been taken into account 

There was a broad support among all stakeholders for the appointment of competent 
authorities  and  out-of-court  redress  bodies  to  deal  with  disputes  related  to  the 
Regulation.  Extension  of  the  principle  of  equality  of  charges  to  direct  debits  was 
welcomed  by  Member  States  and  consumer  organisations  and  accepted  by  the 
majority  of  payment  industry  representatives.  The  intention  of  the  Commission  to 
tackle  the  issue  of  the  BoP  statistical  reporting  obligations  based  on  payments  was 
warmly  received  by  the  banks  and  accepted  by  the  majority  of  Member  States.  A 
small minority of the Member States expressed their reservations about this proposal. 
These concerns were analysed in the impact assessment.  

Discussions, responses and written contributions provided by the stakeholders served 
as a basis for the analysis presented in two Commission documents: a Staff Working 
Document  on  the  impact  of  Regulation 2560/2001  on  bank  charges  for  national 
payments  (December 2006,  SEC(2006)1783)  and  in  a  Report  on  the  application  of 
Regulation  2560/2001  (February  2008,  COM(2008)64).  The  latter  document 
concluded  that  changes  should  be  proposed  to  Regulation 2560/2001  in  order  to 
respond to the problems identified.  

Collection and use of expertise 

There was no need for external expertise. 

Impact assessment 

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The Commission carried out an impact assessment listed in the Work Programme. 

The impact assessment discusses the three main issues identified as problems in the 
Commission's  report  on  Regulation 2560/2001  from  February 2008.  These  are:  the 
necessity  of  extending  the  scope  of  the  Regulation  to  direct  debits,  balance-of-
payments  (BoP)  statistical  reporting  requirements 
imposed  on  cross-border 
transactions and the absence of competent authorities and out-of-court redress bodies 
for Regulation-related issues, including consumer complaints.  

The relevant options as regards extending the scope to include direct debits are: (1) do 
not  extend  the  scope  of  the  Regulation  to  direct  debits;  (2) encourage  industry  self-
regulation  and/or  recommend  regulatory  action  by  Member  States  and  (3) enact 

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legislation to extend the scope of the Regulation. 

Under  Option 3,  in  line  with  the  conclusions  of  the  evaluation  report,  the  prices 
charged  for  a  national  and  cross-border  direct  debit  would  be  the  same  within  each 
Member State. Consumers would be protected from possible discriminatory pricing of 
cross-border  direct  debits.  European  enterprises  would  benefit  even  more,  since 
businesses  also  act  in  a  payee  capacity.  As  a  result  of  the  equalisation  of  prices, 
payment  transaction  costs  for  businesses  would  be  the  same,  irrespective  of  the 
payer's location.  

The  options  related  to  BoP  reporting  are  (4) maintain  the  existing  threshold  that 
exempts  payment  service  providers  from  reporting  on  payment  transactions  below 
EUR 12 500;  (5) create  a  voluntary  Additional  Optional  Service  (AOS)  Community 
within  SEPA  that  would  allow  the  collection  of  statistical  data  from  settlements  to 
continue; (6) encourage voluntary adjustments by the Member States; and (7) address 
the BoP reporting problems through legislation, with three sub-options: (7a) raise the 
exemption  threshold  to  EUR 50 000;  (7b) abolish  settlement-based  BoP  reporting 
obligations  imposed  on  payment  service  providers;  and  (7c) raise  the  exemption 
threshold to EUR 50 000 followed, in a second phase, by abolition of BoP reporting 
based on settlements by January 2012. 

In  the  preferred  policy  option, 7c,  the  costs  of  payments  would  be  reduced  to  the 
maximum possible extent, and there would be no administrative distinction between 
national  and  cross-border  payments.  In  terms  of  competition  the  level  playing  field 
for  payment  service  providers  would  be  achieved.  The  use  of  cross-border  payment 
services  would  be  facilitated.  The  abolition  of  BoP  requirements  would  be  gradual, 
after an initial stage where the reporting threshold would be raised. This would allow 
the  BoP  compilers  to  gradually  adapt  their  collection  methods  to  the  changes 
required, thus minimising the impact on the quality of the BoP statistics. 

The options relating to the competent authorities and out-of-court redress bodies are 
(8) do  not  appoint  competent  authorities  and  out-of-court  redress  bodies;  and 
(9) appoint  competent  authorities  and  out-of-court  redress  bodies  to  deal  with 
Regulation issues. 

In Option 9, which is the preferred policy option, Member States would be asked to 
indicate which competent authorities would be responsible for the correct application 
of the Regulation at national level. Consumers and businesses would be able to limit 
the  legal  costs  of  judicial  intervention  and  accelerate  the  resolution  of  payment 
disputes through arbitrage and mediation. 

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LEGAL ELEMENTS OF THE PROPOSAL 

Summary of the proposed action 

The proposal amends the wording of all existing provisions of Regulation 2560/2001. 
In addition, it proposes to: 

–  extend  the  principle  of  equality  of  charges  for  cross-border  and  corresponding 

domestic payments to cover direct debits; 

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–  phase  out,  by  1 January 2012,  the  balance-of-payments  statistical  reporting 

obligations imposed on payment service providers; 

–  request  Member  States  to  appoint  competent  authorities  and  out-of-court  redress 
bodies to deal effectively with complaints and disputes regarding this proposal.  

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Legal basis 

Article 95(1) of the EC Treaty. 

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Subsidiarity principle 

The  subsidiarity  principle  applies  insofar  as  the  proposal  does  not  fall  under  the 
exclusive competence of the Community. 

The objectives of the proposal cannot be sufficiently achieved by the Member States 
for the following reason(s): 

Cross-border  payments  in  euro  require  a  Community-wide  approach  because  the 
applicable rules and principles have to be the same in all Member States in order to 
achieve  legal  certainty  and  a  level  playing  field  for  all  European  payments  market 
stakeholders.  Member  States  possess  less  effective  instruments  to  achieve  the  same 
results.  The  alternative  would  be  a  system  of  bilateral  agreements,  which  would  be 
difficult and time-consuming to negotiate across all Member States as well as costly 
and complex to implement. 

Community action will better achieve the objectives of the proposal for the following 
reason(s): 

The  Community  action  will  guarantee  a  full  harmonisation  of  the  provisions  across 
the Member States, in particular removing the remaining impediments to cross-border 
payments at the Member States level, such as BoP reporting obligations. The ultimate 
aim  to  reduce  the  costs  of  cross-border  payments  could  be  best  achieved  at  the  EU 
level.  

There  is  a  general  agreement  among  the  stakeholders  (in  particular  Member  States 
and  the  payments  industry)  that  the  identified  policy  objectives  can  be  most 
efficiently achieved by Community action.  

The proposal therefore complies with the subsidiarity principle. 

Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s): 

The proposal does not go beyond what is strictly necessary to achieve its objectives. It 
allows Member States to decide on the appointment of the competent authorities and 
out-of-court redress bodies, using existing bodies, if deemed appropriate. As concerns 
the  statistical  reporting,  Member  States  are  free  to  decide  on  an  alternative  BoP 
collection method with which to replace the settlement-based reporting. 

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332 

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The  proposal  aims  to  minimise  the  impact  of  changes  on  national  authorities, 
economic  agents  and  citizens.  Member  States  may  use  the  existing  administrative 
structures and bodies to reduce their costs. Abolishing the settlement-based balance-
of-payments  reporting  in  favour  of  other  collection  methods  should  lead  to  a 
significant  reduction  of  the  costs  of  statistical  reporting  for  society  in  the  affected 
Member  States.  Equalisation  of  charges  for  domestic  and  cross-border  direct  debits 
should  not  result  in  an  increased  financial  or  administrative  burden  on  the 
stakeholders. 

Choice of instruments 

Proposed instruments: Regulation. 

Other means would not be adequate for the following reason(s): 

The proposal  aims  to replace  an  existing Regulation. In this context and in order to 
achieve  an  as  complete  harmonisation  as  possible  without  national  transposition 
measures  being  needed,  it  is  appropriate  to  use  the  legal  form  of  a  Regulation  also 
with regard to this proposal.  

BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

ADDITIONAL INFORMATION 

Simplification 

The  proposal  provides  for  simplification  of  legislation,  and  simplification  of 
administrative procedures for private individuals. 

Alignment  of  the  wording  of  the  proposed  Regulation  with  Directive  2007/64/EC 
should  provide  legal  consistency  and  increase  clarity  between  both  payment  laws, 
thus simplifying the legal framework. 

The  phasing-out  of  the  balance  of  payments'  reporting  obligations  based  on 
settlements  is  expected  to  reduce  the  administrative  burdens  imposed  on  payment 
service  providers  in  12  Member  states  affected  by  this  proposal  by  EUR  300-400 
million  annually.  Furthermore,  the  impact  assessment  projections  and  experience  of 
Member States that have already abandoned such a reporting method indicate that the 
costs of reporting for society will significantly decrease when alternative methods of 
collection  of  statistical  data  are  introduced.  According  to  the  estimations  of  the 
European  Commission  and  taking  into  account  all  the  underlying  assumptions  and 
reservations  of  the  applied  cost  model,  the  costs  of  statistical  reporting  for  the 
societies of 12 Member States would decrease from EUR 600-800 million annually to 
EUR 75–150 million annually. At the level of individual Member States the reporting 
costs for society could be reduced on average three- to four-fold.  

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Repeal of existing legislation 

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The  adoption  of  the  proposal  will  lead  to  the  repeal  of  Regulation  (EC)  No. 
2560/2001. 

Review/revision/sunset clause 

The proposal includes a review clause. 

European Economic Area 

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The  proposed  act  concerns  an  EEA  matter  and  should  therefore  extend  to  the 
European Economic Area. 

Detailed explanation of the proposal 

The  following  short  summary  aims  to  facilitate  the  decision  making  process  by 
indicating  the  differences  between  this  proposal  and  the  existing  Regulation 
2560/2001. As a consequence of the changes in definitions wording of all articles has 
changed.  Nevertheless  their  substance  remains  much  the  same,  apart  from  the  three 
main changes stated above. 

Article 1 - subject matter and scope - is based on Art. 1 of Regulation 2560/2001. In 
addition,  it  contains  reference  to  the  possible  application  of  the  Regulation  to 
currencies other than euro. 

Article 2 - definitions - extends the scope of the definition of 'cross-border payments' 
to  direct  debits.  Other  definitions  are  aligned  with  those  used  in  Directive 
2007/64/EC. 

Article 3 - charges for cross-border payments - adapts Art. 3 of Regulation 2560/2001 
to the new definitions. Payment service providers are explicitly obliged to find always 
a corresponding payment. 

Article 4 - facilitation of payments - modifies Art. 5 of Regulation 2560/2001, taking 
into account the extended scope of the current proposal. 

Article 5 - Balance of payments reporting - replaces Art. 6 of Regulation 2560/2001. 
It introduces a deadline for Member States to abolish settlement-based BoP reporting 
obligations. 

Articles  6,  7  and  8  -  competent  authorities,  complaint  procedures  and  out-of-court 
redress  -  are  new.  They  oblige  Member  States  to  set  up  competent  authorities, 
complaint procedures and out-of-court redress bodies to ensure compliance with the 
Regulation. They also ask them to provide the Commission with information on these 
arrangements. 

Article  9  -  cooperation  -  is  new.  It  provides  for  the  co-operation  between  the 
competent  authorities  and  out-of-court  redress  bodies  in  solving  cross-border 
disputes. 

Article 10 - penalties - replaces Art. 7 of Regulation 2560/2001. It also asks Member 
States to provide details on penalties to the Commission. 

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Article 11 - application to currencies outside euro area - replaces the second part of 
Art.9 of Regulation 2560/2001. It also contains the grandfathering clause for Member 
States who have already applied the Regulation to their currencies. 

Article  12  -  revision  clause  -  substitutes  a  similar  clause  in  Art.8  of  Regulation 
2560/2001. 

Article 13 - repeal - is new. It repeals Regulation 2560/2001. 

Article  14  -  entry  into  force  -  substitutes  the  first  part  of  Art.9  of  Regulation 
2560/2001. 

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2008/0194 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on cross-border payments in the Community 

(Text with EEA relevance) 

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 Commission1, 

Having regard to the opinion of the European Economic and Social Committee2, 

Having regard to the opinion of the European Central Bank3, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty4, 

Whereas: 

(1) 

(2) 

For the proper functioning of the Internal Market and in order to facilitate cross-border 
trade within the Community it is essential that the charges for cross-border payments 
in  euro  are  the  same  as  for  corresponding  payments  within  a  Member  State.  This 
principle is established by Regulation (EC) No 2560/2001 of the European Parliament 
and  of  the  Council  of  19 December 2001  on  cross-border  payments  in  euro5,  which 
applies to cross-border payments in euro and Swedish Kronor up to EUR 50 000.  

The report of the Commission to the European Parliament and to the Council on the 
application  of  Regulation  (EC) No 2560/2001  on  cross-border  payments  in  euro, 
adopted  on  11 February 20086,  has  confirmed  that  the  application  of  Regulation 
(EC) No 2560/2001  has  effectively  brought  down  the  charges  for  cross-border 
payment transactions in euro to the level of national charges and that it has encouraged 
the European payments industry to undertake the necessary efforts in order to build a 
Community-wide infrastructure for payments. 

(3) 

In  the  report  the  practical  problems  encountered  with  the  implementation  of 
Regulation (EC) No 2560/2001 were examined. As a conclusion a number of changes 

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OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
OJ L 344, 28.12.2001, p. 13 
COM(2008) 64 final. 

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(4) 

(5) 

(6) 

(7) 

(8) 

to  that  Regulation  were  proposed  in  order  to  address  problems  identified  during  the 
review  process.  Those  problems  concern  the  disruption  of  the  internal  market  in 
payments  caused  by  divergent  statistical  reporting  obligations;  problems  of 
enforcement  of  Regulation  (EC)  No  2560/2001  due  to  a  lack  of  identified  national 
competent authorities; the absence of out-of-court redress bodies for disputes related to 
that Regulation and the fact that the Regulation does not cover direct debits.  

the  European  Parliament  and  of 

Directive  2007/64/EC  of 
the  Council  of 
13 November 2007 on payment services in the internal market7 provides modern legal 
foundations  for  the  creation  of  a  Community-wide  single  market  for  payments.  In 
order to ensure legal consistency between both legal acts, it is advisable to adapt the 
relevant provisions of Regulation (EC) No 2560/2001, in particular the definitions. 

Regulation  (EC)  No  2560/2001  covers  cross-border  credit  transfers  and  cross-border 
electronic  payment  transactions.  It  also  covers  cross-border  cheques,  but  only  for 
transparency  purposes.  In  conformity  with  the  objective  of  Directive  2007/64/EC  to 
make  cross-border  direct  debits  possible,  it  is  advisable  to  extend  the  scope  of  the 
Regulation. As for payment instruments which are mainly or exclusively paper-based, 
such  as  cheques,  it  is  still  not  advisable  to  apply  the  principle  of  uniform  charges 
since,  by  their  very  nature,  they  cannot  be  processed  as  efficiently  as  electronic 
payments.  

Since the fragmentation of payment markets should be prevented, it is appropriate to 
apply the principle of equality of charges. For that purpose, a national payment having 
the  same  or  very  similar  characteristics  to  the  cross-border  payment,  in  particular  as 
far  as  initiation  channel,  speed  and  degree  of  automation  are  concerned,  should  be 
identified for each category of cross-border payment transaction.  

It is important to facilitate the execution of cross-border payments by payment service 
providers. In this respect, standardisation should be promoted as regards, in particular, 
the  use  of  the  International  Bank  Account  Number  (IBAN)  and  the  Bank  Identifier 
code (BIC). It is therefore appropriate to provide payment service users with sufficient 
information on IBAN and BIC. 

reporting  obligations,  which  apply 
Diverging  balance-of-payments  statistical 
exclusively  to  cross-border  payment  transactions,  hinder  the  development  of  an 
integrated  market  in  payments,  in  particular  in  the  framework  of  the  Single  Euro 
Payments Area (SEPA). It is advisable in a SEPA context to gradually phase out these 
reporting obligations based on bank settlements, taking into account the time needed 
to  adjust  the  balance-of-payments  reporting  in  the  Member States  to  alternative  data 
collection methods. In order to guarantee a continuous, timely and efficient provision 
of the balance-of-payments statistics it is also desirable to ensure that readily available 
payments  data,  such  as  IBAN,  BIC  and  the  amount  of  the  transaction  or  basic, 
aggregated payments data for different payment instruments may be still collected, if 
the collection process does not disrupt the automated payments processing and could 
be fully automated. 

7 

OJ L 319, 5.12.2007, p. 1 

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(9) 

In  order  to  ensure  that  redress  is  possible  in  the  cases  of  wrong  application  of  this 
Regulation,  Member  States  should  establish  adequate  and  effective  procedures  for 
lodging  complaints  or  appeals  and  for  settling  any  disputes  between  the  payment 
service  user  and  his  payment  service  provider.  It  is  also  important  that  competent 
authorities  and  out-of-court  redress  bodies  are  appointed,  where  applicable  using 
existing procedures.  

(10) 

It  is  essential  to  ensure  that  competent  authorities  and  out-of-court  redress  bodies 
within  the  Community  actively  co-operate  for  the  smooth  and  timely  resolution  of 
cross-border disputes under this Regulation. 

(11) 

It  is  necessary  that  Member  States  lay  down  effective,  proportionate  and  dissuasive 
penalties in national law for failure to comply with the provisions of this Regulation. 

(12)  Extending  the  application  of  this  Regulation  to  other  currencies  than  the  euro  would 
have clear benefits, especially in terms of number of payments covered. Therefore, in 
order  to  allow  Member  States  which  do  not  have  the  euro  as  currency  to  extend  the 
application  of  this  Regulation  to  cross-border  payments  made  in  their  national 
currency,  a  notification  procedure  should  be  set.  It  should  however  be  ensured  that 
countries having already complied with this procedure do not have to introduce a new 
notification.  

(13) 

It  is  desirable  that  the  Commission  should  present  a  report  on  the  use  of  IBAN  and 
BIC for the facilitation of payments within the Community. It is also appropriate that 
the Commission should present a report on the application of this Regulation. 

(14)  For  reasons  of  legal  security  and  clarity  Regulation  (EC)  No.  2560/2001  should  be 

replaced. 

(15) 

In order to ensure legal coherence between this Regulation and Directive 2007/64/EC, 
in  particular  as  regards  the  transparency  of  conditions  and  information  requirements 
for payment services and as regards rights and obligations in relation to the provision 
and  use  of  payment  services  it  is  appropriate  that  this  Regulation  applies  from 
1 November 2009.  

(16)  Since  the  objectives  of  the  action  to  be  taken  cannot  be  sufficiently  achieved  by  the 
Member  States  and  can, therefore,  by reason  of  the  scale  or  effects  of  the  action,  be 
better  achieved  at  Community  level,  the  Community  may  adopt  measures  in 
accordance  with  the  principle  of  subsidiarity  as  set  out  in  Article 5  of  the  Treaty.  In 
accordance  with  the  principle  of  proportionality,  as  set  out  in  that  Article,  this 
Regulation does not go beyond what is necessary in order to achieve those objectives. 

HAVE ADOPTED THIS REGULATION: 

Article 1 
Subject matter and scope 

1. 

This  Regulation  lays  down  rules  on  cross-border  payments  within  the  Community, 
ensuring that charges for those payments are the same as those for payments in the 
same currency within a Member State.  

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2. 

3. 

This  Regulation  shall  apply  to  cross-border  payments  up  to  the  amount  of 
EUR 50 000  which  are  denominated  in  euro  or  in  the  currencies  of  the  Member 
States referred to in Article 11. 

This Regulation shall not apply to payments made by payment service providers for 
their own account. 

Article 2 
Definitions 

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

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

'cross-border  payments'  means  electronic  payment  transactions  initiated  by  the  payer 
or by or through a payee and carried out via a payment service provider or a branch 
thereof in one Member State, with a view to making an amount of money available to 
a payee via his payment service provider or a branch thereof in another Member State; 

'payment instrument' means any personalised device(s) and/or set of procedures agreed 
between the  payment service user  and  the  payment service provider and used by the 
payment service user in order to initiate a payment transaction; 

'payer'  means  a  natural  or  legal  person  who  holds  a  payment  account  and  allows  a 
payment  order  from  that  payment  account,  or,  where  there  is  no  payment  account,  a 
natural or legal person who gives a payment order; 

'payee'  means  a  natural  or  legal  person  who is the intended recipient of funds which 
have been the subject of a payment transaction; 

'payment  service  provider'  means  any  of  the  categories  referred  to  in  Article 1(1)  of 
Directive  2007/64/EC  and  legal  and  natural  persons  referred  to  in  Article 26  of  that 
Directive; 

'payment  service  user'  means  a  natural  or  legal  person  making  use  of  a  payment 
service in the capacity of either payer or payee, or both;  

'payment transaction' means an act, initiated by the payer or by the payee, of placing, 
transferring or withdrawing funds, irrespective of any underlying obligations between 
the payer and the payee;  

'payment  order'  means  any  instruction  by  a  payer  or  payee  to  his  payment  service 
provider requesting the execution of a payment transaction; 

'charges'  means  any  charge  levied  by  a  payment  service  provider  on  the  payment 
service user and directly or indirectly linked to a payment transaction.  

Article 3 
Charges for cross-border payments and corresponding national payments 

1. 

Charges  levied  by  a  payment  service  provider  in  respect  of  cross-border  payments 
shall  be  the  same  as  the  charges  levied  by  the  same  payment  service  provider  for 

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2. 

1. 

2. 

3. 

4. 

1. 

2. 

3. 

corresponding payments of the same value within the Member State from which the 
cross-border payment originates.  

When assessing, for the purpose of complying with paragraph 1, the level of charges 
for  a  cross-border  payment,  a  payment  service  provider  shall  identify  the 
corresponding domestic payment.  

Article 4 
Measures for facilitating the automation of payments 

A  payment  service  provider  shall,  where  applicable,  communicate  to  the  payment 
service  user  the  latter's  International  Bank  Account  Number  (IBAN)  and  his  Bank 
Identifier Code (BIC).  

In  addition,  where  applicable,  a  payment  service  provider  shall  indicate  on 
statements of account of a payment service user, or in an annex thereto, the latter's 
IBAN and his BIC. 

Where  appropriate  with  regard  to  the  nature  of  the  payment  transaction  concerned, 
for transactions initiated by the payer, the payer shall, upon request, communicate to 
his  payment  service  provider  the  IBAN  of  the  payee  and  the  BIC  of  the  payment 
service provider of the payee. 

Where  appropriate  with  regard  to  the  nature  of  the  payment  transaction  concerned, 
for transactions initiated by the payee, the payee shall, upon request, communicate to 
his  payment  service  provider  the  IBAN  of  the  payer  and  the  BIC  of  the  payment 
service provider of the payer. 

Where  appropriate  with  regard  to  the  nature  of  the  payment  transaction  concerned, 
for  all  invoicing  of  goods  and  services  in  the  Community,  a  supplier  who  accepts 
payments  covered  by  this  Regulation  shall  communicate  his  IBAN  and  the  BIC  of 
his payment service provider to his customers. 

Article 5 
Balance of payments reporting obligations 

With  effect  from  1 January 2010  at  the  latest,  Member  States  shall  remove 
settlement-based  national  reporting  obligations  on  payment  service  providers  for 
balance of payments statistics up to an amount of EUR 50 000. 

With  effect  from  1 January 2012  at  the  latest,  Member  States  shall  remove 
settlement-based  national  reporting  obligations  on  payment  service  providers  for 
balance of payments statistics. 

Without  prejudice  to  paragraphs  1  and  2,  Member  States  may  continue  to  collect 
aggregated data or other readily available information, provided that such collection 
fulfils the following conditions:  

(a) 

it has no impact on the straight through processing of the payments by payment 
service providers; 

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(b) 

it can be fully automated by payment service providers. 

Article 6 
Competent authorities 

1. 

Member  States  shall  appoint  the  authorities  responsible  to  ensure  compliance  with 
the provisions of this Regulation. 

Member States shall notify the Commission of those competent authorities within six 
months  after  the  entry  into  force  of  this  Regulation.  They  shall  notify  the 
Commission without delay of any subsequent change concerning those authorities. 

Article 7 
Complaint procedures 

1. 

2. 

1. 

2. 

1. 

Member States shall set up procedures which allow payment service users and other 
interested  parties  to  submit  complaints  to  the  competent  authorities  with  regard  to 
alleged infringements of this Regulation by payment service providers.  

Where appropriate and  without prejudice to the right to bring proceedings before a 
court  in  accordance  with  national  procedural  law,  the  reply  from  the  competent 
authorities  shall  inform  the  complainant  of  the  existence  of  the  out-of-court 
complaint and redress procedures set up in accordance with Article 8. 

Article 8 
Out-of-court redress procedures 

Member States shall put in place adequate and effective out-of-court complaint and 
redress procedures for the settlement of disputes between payment service users and 
their  payment  service  providers,  for  disputes  concerning  rights  and  obligations 
arising under this Regulation, using existing bodies where appropriate. 

Member States shall notify the Commission of those bodies within six months after 
entry into force of this Regulation. They shall notify the Commission without delay 
of any subsequent change concerning those bodies.  

Article 9 
Cross-border cooperation 

Competent  authorities  and  out-of-court  redress  bodies  of  the  different  Member 
States, referred to in Articles 6 and 8, shall actively cooperate in solving cross-border 
disputes. 

Article 10 
Penalties 

1. 

Member States shall lay down rules on the penalties applicable to infringements of 
this  Regulation  and  shall  take  all  measures  necessary  to  ensure  that  they  are 

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implemented.  The  penalties  provided  for  shall  be  effective,  proportionate  and 
dissuasive. Member States shall notify those provisions to the Commission by … at 
the latest [twelve months after entry into force of this Regulation] and shall notify it 
without delay of any subsequent amendment affecting them. 

Article 11 
Application to the currencies other than the euro 

Member  States  which  do  not  have  the  euro  as  currency  wishing  to  extend  the 
application of this Regulation to their currency shall notify the Commission of their 
decision. The notification shall be published in the Official Journal of the European 
Union. The extension shall take effect 14 days after that publication. 

Member States which, at the date of entry into force of this Regulation, have already 
complied  with  the  notification  procedure  pursuant  to  Article 9  of  Regulation  (EC) 
No 2560/2001, shall not need to submit a notification as referred to in paragraph 1 of 
this Article. 

Article 12 
Review clause 

The Commission shall, by 31 December 2012 at the latest, present to the European 
Parliament,  the  Council,  the  European  Economic  and  Social  Committee  and  the 
European  Central  Bank  a  report  on  the  use  of  IBAN  and  BIC  in  relation  with  the 
automation of payments, accompanied by any appropriate proposal. 

The Commission shall, by 31 December 2015 at the latest, present to the European 
Parliament,  the  Council,  the  European  Economic  and  Social  Committee  and  the 
European  Central  Bank  a  report  on  the  application  of  this  Regulation  accompanied 
by any appropriate proposal. 

1. 

2. 

1. 

2. 

Article 13 
Repeal 

Regulation (EC) No 2560/2001 is repealed.  

References to the repealed Regulation shall be construed as references to this Regulation. 

Article 14 
Entry into force 

This Regulation shall enter into force on the 20th day following that of its publication in the 
Official Journal of the European Union. 

It shall apply from 1 November 2009. 

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

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Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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