COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a regulation of the European Parliament and of the Council on cross-border payments in euros

2001/0174 (COD)

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a regulation of the European Parliament and of the Council on cross-border payments in euros

1. BACKGROUND

Commission proposal transmitted to the European Parliament and the Council (COM(2001)439 final, 2001/0174 (COD)) // 25 July 2001

Parliament opinion (first reading) delivered on: // 15 November 2001

Council common position agreed on // 26 November 2001

Economic and Social Committee opinion delivered on // 29 November 2001

Council common position adopted on // 7 December 2001

2. AIM OF THE COMMISSION PROPOSAL

Creation of a single payments area in which charges for cross-border payments in euros are the same as charges for domestic payments.

It is highly desirable that this proposal should be definitively adopted before 1 January 2002.

3. COMMENTS ON THE COMMON POSITION

3.1. Brief general remarks on the common position

By and large, the common position incorporates the measures proposed by the Commission but defers their application by six months. The rules on transfers of over EUR12 500 will not enter into force until 2006. Cheques are to be given special treatment. A provision has been added for transactions in the Union's other three currencies.

3.2. Action taken on the amendments proposed by Parliament at first reading (summary)

Parliament adopted 14 amendments.

* Amendments incorporated in their entirety

Amendment 1 to recital 1

Amendment 2 to recital 3

Amendment 5, which has become recital 10

Amendment 15, which has become recital 13

Amendment 13 to Article 3

Amendment 11 to Article 5

Amendment 12 to Article 5(2)

* Amendments simply reformulated

Amendment 3, which has become recital 4, concerning the scant progress achieved in recent years.

Amendment 6, which has become Article 7, on compliance. The text has been simplified, with only the general idea having been retained.

* Amendments incorporated but altered as to their substance

Amendments 16, 10 and 14 set the date of entry into force for electronic transactions at 1 March 2002 in the case of card transactions and 1 March 2003 in the case of transfers. These dates have been postponed for four months by the Council on feasibility grounds in the interests of reaching an early compromise. The other aspects of these amendments (exclusion of cheques from the principle of equal charges) have been incorporated.

Amendment 7 (which has become Article 8) introduced a review clause. This Article has been substantially strengthened by the Council and now requires the Commission to report on competition and statistical reporting issues. The date initially envisaged, namely 1 January 2004, has also been postponed by six months.

* Amendment not incorporated

Amendment 4 was aimed at introducing a recital stating that application of the Regulation should not lead to increased charges for domestic payments. This is the only amendment which the Commission refused on the grounds that it would create a legal problem in that there was no article in the body of the Regulation corresponding to such a declaration of principle. Nevertheless, a provision introduced by the Council echoes this concern: the review clause (Article 8) requires the Commission to report on the effects which application of the Regulation has had on charges for payments within a Member State.

3.3. New provisions introduced by the Council, and the Commission's position on these

Two issues that were not tackled by Parliament prompted the Council to depart from the Commission's initial proposal.

* Statistical reporting

The Commission's initial proposal required systematic statistical reporting of transactions exceeding EUR12 500 to be abolished with effect from 1 January 2004. This provision drew heavy criticism from some Member States, prompting the Presidency to propose that the principle of equal charges should apply to transactions exceeding EUR12 500 only with effect from 1 January 2006 (addition to Article 3). The obligation to do away with mandatory reporting above EUR12 500 has also been deleted (amendment to Article 6). A new recital (No 12) has been added stating that the abolition of mandatory reporting should be gradual. This issue is furthermore included in the review clause and has to be discussed in the report to be drawn up by the Commission in 2004 (Article 8).

* Currencies other than the euro

The proposed Regulation relates to transactions in euros within the single market. Its geographical scope is therefore not limited to the euro area. Some Member States have expressed the wish that the Regulation should apply also to cross-border transactions in their national currency. A provision has therefore been added allowing the extension of the application of the Regulation to these currencies which will take place when the Member State has notified the Commission of its decision to extend the Regulation's application to its currency.

At the Council meeting (internal market) held on 26 November, the Commission stated that it was willing to accept the amendments proposed on the above two points.

4. CONCLUSIONS

When the common position was agreed at the Council meeting (internal market) of 26 November, the Commission stated that it endorsed the compromise text presented by the Presidency and ultimately adopted by qualified majority.

The Commission takes the view that it is essential for this Regulation to be adopted before 31 December 2001 since it is linked to the introduction of euro notes and coins.