Principle III: Remittance services should be supported by a sound, predictable, non-discriminatory and proportionate legal and regulatory framework The implementation of this principle requires special laws and regulations for remittances, while the existing or new laws should be sound, predictable, non-discriminatory and proportionate. Specially, for remittance corridors, (e.g. US-Mexico, US-Brazil, the Middle East-Philippines) both sending and receiving countries should cooperate with each other to sort out legal obstacles in transferring remittances. It is also noteworthy to consider avoiding dangers of over-regulation in remittance transfers. The Money Laundering and Terrorist Financing Acts can also deter some of the cross-border money transfers. The authorities responsible for implementation of these legislation should be mindful of the need to use judgment in dealing with genuine remittances. Principle IV: Competitive market conditions, including appropriate access to domestic payment infrastructures, should be fostered in the remittance industry. This requires the avoidance of exclusivity conditions as imposed on an agent choosing to offer only one remittance service and to promote several direct /indirect access to domestic payment systems in the country. Here too, the central banks have a role to play. The central banks and supervisors should  BIS Review 3/2007  5  work with competitive authorities to ensure consistent approaches and discourage exclusivity conditions. It is also important for supervisors to ensure that money transfer systems are not unnecessarily anti-competitive. Principle V: Remittance services should be supported by appropriate governance and risk management practices Good governance and risk management practices by all stakeholders make remittance service safer and help protect consumers.

In summary, at macro level, the principles are as follows: Principle I : The market for remittances should be transparent and have adequate consumer production This requires transparency by individual remitting countries about their services as far as possible. The global price including fees at both ends, the exchange rate and other transfer fees should be made known to the remitter. Equally, the time it takes for transfers and accessing locations should be reduced. The receiver should be encouraged to provide bank account details to the formal channels to avoid delays. Principle II: Improvements to payment system infrastructure that has the potential to increase the efficiency of remittance services should be encouraged. This principle involves both domestic payment infrastructure in the remittance receiving countries, cross-border payment infrastructure in both home and host countries, including the infrastructure of corresponding banks. There is a role to be played by the central banks of both remitter as well as receiver's country in improving the cross-border payment infrastructure. Many central banks have taken the lead in facilitating the payment infrastructure, but there still seems to be gaps in the use of electronic networks in semi-urban and rural areas. The central banks and other relevant agencies should encourage the operators to increase interoperability of electronic networks. Similarly, the postal service should be encouraged to play a bigger role in transmitting remittances on a cross-border basis. The postal network is well known in semi-urban and rural areas and they are in a position to provide remittance services at competitive prices.