As from 1 July 2003, BCEE will apply a new scale of charges for transfers in euros to member states of the European Union (EU). This new scale of charges is being implemented further to a European regulation aimed at harmonising bank charges applicable to money transfers.
A. REGULATION (EC) NO. 2560/2001 - 'BASIC' TRANSFERS WITHIN THE EU
1) Origins of the new scale of charges
For several years, the European Commission (EC) and the European Parliament have been concerned about the bank fees charged to customers for international transfers. Banks have been unable to meet the Commission's expectations because of the complexity of correspondent networks, the large number of 'IN' currencies and the lack of a European clearing system. The EC has taken advantage of the advent of the fiduciary euro to impose, at last, the principle of equal charges for payments within the European Union. To that end, the Commission ratified Regulation (EC) No. 2560/2001 in November 2001.
2) Harmonisation in three major stages
Regulation (EC) No. 2560/2001 calls for three major stages in harmonising bank charges on cross-border payments in euros:
1st stage: harmonisation of withdrawals and payments using cards (01/07/2002)
2nd stage: harmonisation of transfers/payments (01/07/2003)
3rd stage: modification of the limit from €12,500 to €50,000 (01/01/2006)
3) The regulation and its three major principles
The regulation deals exclusively with the relationship between the customer and his bank. It does not impose specific amounts for the new charges but establishes three major principles concerning cross-border payments from which a new scale of charges is derived. Banks must comply with these principles, but the actual charges remain the province of the banks.
The three major principles are:
The principle of equal charges
When the country of destination is a member of the European Union and the transfer is denominated in euros, the same charge for the same type of transaction (in euros) must be applied. It will no longer be permissible to make a distinction between a domestic and a cross-border transfer (non-discrimination based on the border).
Nonetheless, banks will be able to differentiate their charges in accordance with other criteria such as the medium through which the order is delivered and whether or not the transfer is between accounts held at the same bank or to an account held at a different bank.
The principle of transparency
Financial institutions must inform their customers of their charges in an understandable manner and give the customer prior notice of any change in charges.
The principle of standardisation
Financial institutions must provide their customers with IBAN account numbers and the bank's BIC address. Suppliers of goods and services must also give their customers their full banking details (IBAN and BIC) to facilitate and speed the payment of invoices.
4) Scope of application of the regulation
The regulation applies to both transfers done by the customer and transfers of which he is the beneficiary. A transfer falls within the scope of the regulation if three conditions are met simultaneously:
the transfer is denominated in euros (regardless of the account currency);
the amount is <= €12,500;
the destination is within the European Union.
There is only one exception to the first condition. The regulation stipulates that as from the time that a European Union member country decides to apply this regulation to its non-EUR currency, the regulation's conditions apply to that currency. The only country that has done so is Sweden (SEK). Charges applied to transactions in this currency can be different from charges applied to transactions in euros as long as the regulation's principles are complied with.
5) The 'basic' transfer in the EU
In order to simplify the processing of cross-border transfers as much as possible, European banks have defined, in addition to Regulation (EC) No. 2560/2001, the characteristics of a 'basic' transfer (CREDEURO convention). This convention sets the conditions that enable a transfer to be processed using Straight Through Processing (STP). Since processing is automated from start to finish, these transfers will be the least costly.
The following conditions are characteristic of a 'basic' transfer:
The transfer is in euros;
The amount is <= €12,500;
The bank issuing the instructions and the beneficiary's bank are both located in a European Union member state;
Banking details are given in IBAN/BIC format;
All charges are allocated as 'shared charges' (SHARE). The bank ensures that the beneficiary receives the total amount to be transferred (less any applicable local charges made by the beneficiary's bank.)
In terms of IBAN/BIC standardisation, Regulation (EC) No. 2560/2001 leaves some leeway to banks. For example, if the beneficiary's banking details are not provided in IBAN/BIC format, the bank of the person issuing the instructions may either refuse to make the transfer or levy an additional charge for the extra work. BCEE has chosen the second option.
The bank may also apply an additional charge for foreign exchange transactions.
6) Advantages for the customer
The customer benefits from certain advantages for transfers that comply with the characteristics of 'basic' transfers. Banks undertake to guarantee:
the time to completion,
the amount transferred,
the charges deducted.
Guarantee of the time to completion
For cross-border payments, the beneficiary is credited with the funds in principle on the third day following the date the order is accepted by the bank issuing the instructions.
Guarantee of the amount
The beneficiary's bank receives the entire amount of the order.
Charges are known
The customer issuing the order knows in advance the (domestic) charges that his bank will deduct and the beneficiary also knows the (domestic) charges that his bank will deduct.
B. EUROTRANSFERT AND THE NEW SCALE OF CHARGES
1) EUROTRANSFERT: BCEE's response to the new regulation
BCEE's response to Regulation (EC) No. 2560/2001 and the CREDEURO convention is the EUROTRANSFERT, which meets the terms of both the regulation and the convention. In this respect, a EUROTRANSFERT is a transfer that BCEE can process without intervening manually (STP).
As a result:
the transfer time is from three (best effort) to at most six days;
the entire amount transferred reaches the beneficiary's bank;
charges deducted are known in advance.
For all transfers to which Regulation (EC) No. 2560/2001 applies, the customer minimises his charges by choosing EUROTRANSFERT. EUROTRANSFERT is the least expensive solution for both the issuer of the order and its beneficiary (charges known in advance by both parties).
Thanks to the new 'shared charges' principle (SHARE) used for EUROTRANSFERT, BCEE can guarantee that the beneficiary will receive the entire amount transferred (less any domestic charges deducted by his bank).
2) The basis for the new scale of charges
BCEE has developed a scale of charges for transfers in euros that is transparent and divided into several levels:
depending on the amount
A 'Micro-Payment' in euros, i.e. transfer of an amount less than or equal to €25, is executed free of charge.
depending on the beneficiary's bank
A transfer to another BCEE account costs less than one to an account held at another financial institution in the European Union.
depending on the type of transfer
An electronic transfer via a standing order or electronic banking will be less expensive than a transfer made through an automatically processed standardised TUP (universal order to pay) or a manually executed paper-based order.
3) New charges applied to order issuers
Within the EUROTRANSFERT framework, a distinction must be made between:
internal BCEE transfers (i.e. transfers between current accounts held at BCEE),
transfers to another bank located in a European Union member state.
Important: as a transfer to a country outside the EU and/or in an 'OUT' currency is not considered a EUROTRANSFERT the transfer will be charged at the current rates.
The following EUROTRANSFERTS are executed free of charge:
BCEE will continue to provide a large number of transactions free of charge:
Transfers between BCEE accounts if the order is 'electronic';
Micro-payments, regardless of the order method;
All transfers in euro between accounts belonging to the same customer, transfers from/to BCEE savings and loan accounts, regardless of the order method;
Payment of regular bills via direct debit;
Payments in euro using BCEE bank cards;
Incoming money transfer in euro.
C. NEW SCALE OF CHARGES FOR RETAIL CUSTOMERS
1) Preferential rates for retail customers
As of 1 August 2003 the first 8 Eurotransferts per month are executed free of charge from the private account(s) of BCEE clients, no matter the transfer method used as long as the "Eurotransfert" criteria is respected (cf. chapter A.5. of this document).
Account holders of a ZEBRA package receive the first 12 Eurotransferts free of charge each month.
Beyond this limit, the Eurotransfert scale of charges introduced on 1 July 2003 will apply.
In addition to the possibility of limiting charges for transfers using the above-mentioned means (standing orders, direct debit, electronic banking and 'Micro-Payment'), the BCEE customer benefits from preferential rates if he holds a ZEBRA account , an axxess account , or an account linked to an ActivInvest package. These preferential rates obviously apply only to transfers from one of these accounts and not from any other current account held by the same customer.
2) Deduction of charges
The retail customer can choose between two methods of deducting charges for money transfers:
a deduction per transaction,
periodic deferred deduction.
By default, all customers will be deducted per transaction. The customer who issues a transfer order will be debited the amount transferred plus the applicable charges. Only the aggregate amount (transfer plus charges) appears on the statement. The transaction notice includes the details (one line for the amount transferred and a second for the charges deducted).
Customers who expressly request to do so may choose to have charges deducted periodically. Nonetheless, this is possible only with EUROTRANSFERT, not with other transfers.