mny'CODE.3letter

name::
* McsEngl.mny'CODE.3letter,
* McsEngl.mny3letter-name,
* McsEngl.mny'ISO-4217-name,
* McsEngl.mny'name.3letter,

_ADDRESS.WPG:
* http://www.science.co.il/international/Currency-codes.php (sortable)

_SPECIFIC:
mny.3ltr.AED United Arab Emirates Dirham
mny.3ltr.AFN Afghanistan Afghani
mny.3ltr.ALL Albania Lek
mny.3ltr.AMD Armenia Dram
mny.3ltr.ANG Netherlands Antilles Guilder
mny.3ltr.AOA Angola Kwanza
mny.3ltr.ARS Argentina Peso
mny.3ltr.AUD Australia Dollar
mny.3ltr.AWG Aruba Guilder
mny.3ltr.AZN Azerbaijan New Manat
mny.3ltr.BAM Bosnia and Herzegovina Convertible Marka
mny.3ltr.BBD Barbados Dollar
mny.3ltr.BDT Bangladesh Taka
mny.3ltr.BGN Bulgaria Lev
mny.3ltr.BHD Bahrain Dinar
mny.3ltr.BIF Burundi Franc
mny.3ltr.BMD Bermuda Dollar
mny.3ltr.BND Brunei Darussalam Dollar
mny.3ltr.BOB Bolivia Bolνviano
mny.3ltr.BRL Brazil Real
mny.3ltr.BSD Bahamas Dollar
mny.3ltr.BTN Bhutan Ngultrum
mny.3ltr.BWP Botswana Pula
mny.3ltr.BYN Belarus Ruble
mny.3ltr.BZD Belize Dollar
mny.3ltr.CAD Canada Dollar
mny.3ltr.CDF Congo/Kinshasa Franc
mny.3ltr.CHF Switzerland Franc
mny.3ltr.CLP Chile Peso
mny.3ltr.CNY China Yuan Renminbi
mny.3ltr.COP Colombia Peso
mny.3ltr.CRC Costa Rica Colon
mny.3ltr.CUC Cuba Convertible Peso
mny.3ltr.CUP Cuba Peso
mny.3ltr.CVE Cape Verde Escudo
mny.3ltr.CZK Czech Republic Koruna
mny.3ltr.DJF Djibouti Franc
mny.3ltr.DKK Denmark Krone
mny.3ltr.DOP Dominican Republic Peso
mny.3ltr.DZD Algeria Dinar
mny.3ltr.EGP Egypt Pound
mny.3ltr.ERN Eritrea Nakfa
mny.3ltr.ETB Ethiopia Birr
mny.3ltr.EUR Euro Member Countries
mny.3ltr.FJD Fiji Dollar
mny.3ltr.FKP Falkland Islands (Malvinas) Pound
mny.3ltr.GBP United Kingdom Pound
mny.3ltr.GEL Georgia Lari
mny.3ltr.GGP Guernsey Pound
mny.3ltr.GHS Ghana Cedi
mny.3ltr.GIP Gibraltar Pound
mny.3ltr.GMD Gambia Dalasi
mny.3ltr.GNF Guinea Franc
mny.3ltr.GTQ Guatemala Quetzal
mny.3ltr.GYD Guyana Dollar
mny.3ltr.HKD Hong Kong Dollar
mny.3ltr.HNL Honduras Lempira
mny.3ltr.HRK Croatia Kuna
mny.3ltr.HTG Haiti Gourde
mny.3ltr.HUF Hungary Forint
mny.3ltr.IDR Indonesia Rupiah
mny.3ltr.ILS Israel Shekel
mny.3ltr.IMP Isle of Man Pound
mny.3ltr.INR India Rupee
mny.3ltr.IQD Iraq Dinar
mny.3ltr.IRR Iran Rial
mny.3ltr.ISK Iceland Krona
mny.3ltr.JEP Jersey Pound
mny.3ltr.JMD Jamaica Dollar
mny.3ltr.JOD Jordan Dinar
mny.3ltr.JPY Japan Yen
mny.3ltr.KES Kenya Shilling
mny.3ltr.KGS Kyrgyzstan Som
mny.3ltr.KHR Cambodia Riel
mny.3ltr.KMF Comoros Franc
mny.3ltr.KPW Korea (North) Won
mny.3ltr.KRW Korea (South) Won
mny.3ltr.KWD Kuwait Dinar
mny.3ltr.KYD Cayman Islands Dollar
mny.3ltr.KZT Kazakhstan Tenge
mny.3ltr.LAK Laos Kip
mny.3ltr.LBP Lebanon Pound
mny.3ltr.LKR Sri Lanka Rupee
mny.3ltr.LRD Liberia Dollar
mny.3ltr.LSL Lesotho Loti
mny.3ltr.LYD Libya Dinar
mny.3ltr.MAD Morocco Dirham
mny.3ltr.MDL Moldova Leu
mny.3ltr.MGA Madagascar Ariary
mny.3ltr.MKD Macedonia Denar
mny.3ltr.MMK Myanmar (Burma) Kyat
mny.3ltr.MNT Mongolia Tughrik
mny.3ltr.MOP Macau Pataca
mny.3ltr.MRO Mauritania Ouguiya
mny.3ltr.MUR Mauritius Rupee
mny.3ltr.MVR Maldives (Maldive Islands) Rufiyaa
mny.3ltr.MWK Malawi Kwacha
mny.3ltr.MXN Mexico Peso
mny.3ltr.MYR Malaysia Ringgit
mny.3ltr.MZN Mozambique Metical
mny.3ltr.NAD Namibia Dollar
mny.3ltr.NGN Nigeria Naira
mny.3ltr.NIO Nicaragua Cordoba
mny.3ltr.NOK Norway Krone
mny.3ltr.NPR Nepal Rupee
mny.3ltr.NZD New Zealand Dollar
mny.3ltr.OMR Oman Rial
mny.3ltr.PAB Panama Balboa
mny.3ltr.PEN Peru Sol
mny.3ltr.PGK Papua New Guinea Kina
mny.3ltr.PHP Philippines Peso
mny.3ltr.PKR Pakistan Rupee
mny.3ltr.PLN Poland Zloty
mny.3ltr.PYG Paraguay Guarani
mny.3ltr.QAR Qatar Riyal
mny.3ltr.RON Romania New Leu
mny.3ltr.RSD Serbia Dinar
mny.3ltr.RUB Russia Ruble
mny.3ltr.RWF Rwanda Franc
mny.3ltr.SAR Saudi Arabia Riyal
mny.3ltr.SBD Solomon Islands Dollar
mny.3ltr.SCR Seychelles Rupee
mny.3ltr.SDG Sudan Pound
mny.3ltr.SEK Sweden Krona
mny.3ltr.SGD Singapore Dollar
mny.3ltr.SHP Saint Helena Pound
mny.3ltr.SLL Sierra Leone Leone
mny.3ltr.SOS Somalia Shilling
mny.3ltr.SPL* Seborga Luigino
mny.3ltr.SRD Suriname Dollar
mny.3ltr.STD Sγo Tomι and Prνncipe Dobra
mny.3ltr.SVC El Salvador Colon
mny.3ltr.SYP Syria Pound
mny.3ltr.SZL Swaziland Lilangeni
mny.3ltr.THB Thailand Baht
mny.3ltr.TJS Tajikistan Somoni
mny.3ltr.TMT Turkmenistan Manat
mny.3ltr.TND Tunisia Dinar
mny.3ltr.TOP Tonga Pa'anga
mny.3ltr.TRY Turkey Lira
mny.3ltr.TTD Trinidad and Tobago Dollar
mny.3ltr.TVD Tuvalu Dollar
mny.3ltr.TWD Taiwan New Dollar
mny.3ltr.TZS Tanzania Shilling
mny.3ltr.UAH Ukraine Hryvnia
mny.3ltr.UGX Uganda Shilling
mny.3ltr.USD United States Dollar
mny.3ltr.UYU Uruguay Peso
mny.3ltr.UZS Uzbekistan Som
mny.3ltr.VEF Venezuela Bolivar
mny.3ltr.VND Viet Nam Dong
mny.3ltr.VUV Vanuatu Vatu
mny.3ltr.WST Samoa Tala
mny.3ltr.XAF Communautι Financiθre Africaine (BEAC) CFA Franc BEAC
mny.3ltr.XCD East Caribbean Dollar
mny.3ltr.XDR International Monetary Fund (IMF) Special Drawing Rights
mny.3ltr.XOF Communautι Financiθre Africaine (BCEAO) Franc
mny.3ltr.XPF Comptoirs Franηais du Pacifique (CFP) Franc
mny.3ltr.YER Yemen Rial
mny.3ltr.ZAR South Africa Rand
mny.3ltr.ZMW Zambia Kwacha
mny.3ltr.ZWD Zimbabwe Dollar
[http://www.xe.com/iso4217.php]

mny'Symbol

name::
* McsEngl.mny'Symbol,
* McsEngl.mny'name.sign,
* McsEngl.mny'name.symbol,
* McsEngl.mny'sign,
* McsEngl.money'symbol@cptEconomy, {2012-12-21}

_EXAMPLE:
$,
€,

OTHER-VIEW#cptCore505#

Money is primarily a medium of exchange or means of exchange. It is a way for a person to trade what he has for what he wants. Ideal money has three critical characteristics: it acts as a medium of exchange; it is an economic good; and it is a means of economic calculation.
[https://economicsandliberty.wordpress.com/what-is-money/]

money
Anything of value that serves as a (1) generally accepted medium of financial exchange, (2) legal tender for repayment of debt, (3) standard of value, (4) unit of accounting measure, and (5) means to save or store purchasing power. See also cash.
Learn more about this term
Usage Example
They may be willing to loan you money or buy into an equity stake in your firm if they believe in the idea.
[BusinessDictionary.com term 2015-01-28]

"ΧΡΗΜΑ, ΕΝΑ ΙΔΙΑΙΤΕΡΟ ΕΜΠΟΡΕΥΜΑ, ΠΟΥ ΕΙΔΙΚΗ ΛΕΙΤΟΥΡΓΙΑ ΤΟΥ ΕΙΝΑΙ Η ΕΚΠΛΗΡΩΣΗ ΤΟΥ ΡΟΛΟΥ ΤΟΥ ΓΕΝΙΚΟΥ ΙΣΟΔΥΝΑΜΟΥ"
[ΛΕΞΙΚΟ ΠΟΛΙΤΙΚΗΣ ΟΙΚΟΝΟΜΙΑΣ 1983, 635#cptResource172#]

"ΤΟ ΓΕΝΙΚΟ ΕΜΠΟΡΕΥΜΑ ΠΟΥ Μ'ΑΥΤΟ ΑΝΤΑΛΛΑΖΟΝΤΑΝ ΟΛΑ Τ'ΑΛΛΑ"
[ΕΝΓΚΕΛΣ, Η ΚΑΤΑΓΩΓΗ...1966, 132#cptResource186#]

"ΤΟ ΧΡΗΜΑ ΠΟΥ ΧΡΗΣΙΜΟΠΟΙΕΙΤΑΙ ΣΗΜΕΡΑ ΣΤΙΣ ΠΕΡΙΣΣΟΤΕΡΕΣ ΟΙΚΟΝΟΜΙΕΣ ΤΟΥ ΚΟΣΜΟΥ ΔΕΝ ΕΧΕΙ ΕΣΩΤΕΡΙΚΗ ΑΞΙΑ"
[ΠΕΤΡΑΚΗ, 1977, 223#cptResource288#]

"The economists in fact give very indefinite, vague definitions of money, that in no way reflect its nature. In most cases they define it as something that makes it possible to buy goods and services, or as assets by which demand for commodities is financed".
[Smirnov et al, 1984, 46#cptResource289#]

"Money, in a scientific definition, is a universal equivalent whose special function is to express the value of all other commodities".
[Smirnov et al, 1984, 46#cptResource289#]

money is ANYTHING that is generally accepted as payment for goods, services, and debts. Money is a MEDIUM OF EXCHANGE; people accept money in exchange for the goods or services they provide in the expectation that they can subsequently exchange the money for goods and services they wish to ecquire.
...Money also serves as a UNIT OF ACCOUNT, or a "STANDARD OF VALUE". Money's role as a "measuring rod" allows the use of established prices for transactions.
[Cooper et al, 1990, 57#cptResource432#]

value of a quantity of money

ΑΞΙΑ 'ΠΟΣΟΤΗΤΑΣ ΧΡΗΜΑΤΟΣ' είναι η ΓΕΝΙΚΗ-ΚΟΙΝΩΝΙΚΗ-ΕΡΓΑΣΙΑ#cptEconomy164# που σε κάθε συγκεκριμμένη χρονική στιγμή ΑΝΤΙΠΡΟΣΩΠΕΥΕΙ.

face value = what they say, the quantity of <money units>,
inflation value = face value - inflation.
time value = face value +/- interest rate (opportunity cost of capital.
[nikos]

Τα παραπάνω που ξεχώρισα είναι στην ουσία τα διαφορετικά είδη ΤΙΜΩΝ.
[hmnSngo.1995-03]

mnyscs'foreign-exchange-rate-regime

name::
* McsEngl.mnyscs'foreign-exchange-rate-regime,
* McsEngl.conceptEconomy240.4,
* McsEngl.mny'foreign-exchange-rate-regime,
* McsEngl.conceptEconomy476,
* McsEngl.conceptEconomy541.115.81,
* McsEngl.ers@cptEconomy476,
* McsEngl.exchange-rate-regime@cptEconomy476,
* McsEngl.currency-valuation@cptEconomy476,
* McsEngl.exchange-rate-system,
* McsEngl.exchange'rate'system@cptEconomy476,
* McsEngl.IMS@cptEconomy476, {2012-07-10}
* McsEngl.international-monetary-regime@cptEconomy476, {2012-07-10}
* McsEngl.international-monetary-system@cptEconomy476,
* McsEngl.mny'Convertability,
* McsEngl.money-convertability@cptEconomy, {2012-12-20}
====== lagoGreek:
* McsElln.ΣΧΕΤΙΚΗ-ΤΙΜΗ-ΝΟΜΙΣΜΑΤΟΣ,
* McsElln.ΣΥΣΤΗΜΑ-ΠΡΟΣΔΙΟΡΙΣΜΟΥ-ΤΙΜΗΣ-ΣΥΝΑΛΛΑΓΜΑΤΟΣ,
* McsElln.ΣΥΣΤΗΜΑ-ΙΣΟΤΙΜΙΩΝ-ΣΥΝΑΛΛΑΓΜΑΤΟΣ,
* McsElln.ΣΥΣΤΗΜΑ-ΣΥΝΑΛΛΑΓΜΑΤΙΚΩΝ-ΙΣΟΤΙΜΙΩΝ,
* McsElln.ΣΥΣΤΗΜΑ'ΣΥΝΑΛΛΑΓΜΑΤΙΚΩΝ'ΙΣΟΤΙΜΙΩΝ@cptEconomy476,

_WHOLE:
* global-financial-sector#cptEconomy217#

_DESCRIPTION:
Convertability among money types.
[hknm_2012-12-20]
===
The exchange rate regime is the way a country manages its currency in respect to foreign currencies and the foreign exchange market. It is closely related to monetary policy and the two are generally dependent on many of the same factors.
The basic types are a floating exchange rate, where the market dictates the movements of the exchange rate, a pegged float, where the central bank keeps the rate from deviating too far from a target band or value, and the fixed exchange rate, which ties the currency to another currency, mostly more widespread currencies such as the U.S. dollar or the euro.
[http://en.wikipedia.org/wiki/Exchange_rate_regime]
===
ΣΥΣΤΗΜΑ ΣΥΝΑΛΛΑΓΜΑΤΙΚΩΝ ΙΣΟΤΙΜΙΩΝ είναι ο τρόπος με τον οποίο καθορίζονται οι ισοτιμίες των χρημάτων μεταξύ 'οικονομιών'.
[hmnSngo.1995-05]
===
An exchange-rate is the price of currency expressed in terms of another currency.
[Cooper et al, 1990, 549#cptResource432#]

mnyscs'monetary-policy#cptEconomy269#

name::
* McsEngl.mnyscs'monetary-policy,

mnyscs'subsystem.CURRENCY-CONVERSION-SYSTEM

name::
* McsEngl.mnyscs'subsystem.CURRENCY-CONVERSION-SYSTEM,
* McsEngl.mny'currency-exchange-system@cptEconomy,
* McsEngl.mny'foreign-exchange-system,
* McsEngl.currency-exchange-system@cptEconomy,

mnyscs'subsystem.PAYMENT-SYSTEM (mnypts)

_CREATED: {2012-12-19}

name::
* McsEngl.mnyscs'subsystem.PAYMENT-SYSTEM (mnypts),
* McsEngl.conceptEconomy240.5,
* McsEngl.money-transfer-system,
* McsEngl.payment-service-provider@cptEconomy246.42, {2012-12-19}
* McsEngl.payment-system@cptEconomy246.42, {2012-12-19}
* McsEngl.payment-service@cptEconomy346.19, {2011-08-03}
* McsEngl.payment-system@cptEconomy346.19, {2011-08-03}

* McsEngl.mnypts, {2016-04-10}

_GENERIC:
* servicing.financial#cptEconomy541.103.10#

_DESCRIPTION:
A payment system is any system used to settle financial transactions through the transfer of monetary value, and includes the institutions, instruments, people, rules, procedures, standards, and technologies that make such an exchange possible.[1][2] A common type of payment system is the operational network that links bank accounts and provides for monetary exchange using bank deposits.[3]

What makes a payment system a system is the use of cash-substitutes; traditional payment systems are negotiable instruments such as drafts (e.g., checks) and documentary credits such as letters of credit. With the advent of computers and electronic communications a large number of alternative electronic payment systems have emerged. These include debit cards, credit cards, electronic funds transfers, direct credits, direct debits, internet banking and e-commerce payment systems. Some payment systems include credit mechanisms, but that is essentially a different aspect of payment. Payment systems are used in lieu of tendering cash in domestic and international transactions and consist of a major service provided by banks and other financial institutions.

Payment systems may be physical or electronic and each has its own procedures and protocols. Standardization has allowed some of these systems and networks to grow to a global scale, but there are still many country- and product-specific systems. Examples of payment systems that have become globally available are credit card and automated teller machine networks. Specific forms of payment systems are also used to settle financial transactions for products in the equity markets, bond markets, currency markets, futures markets, derivatives markets, options markets and to transfer funds between financial institutions both domestically using clearing and Real Time Gross Settlement (RTGS) systems and internationally using the SWIFT network.

The term electronic payment can refer narrowly to e-commerce - a payment for buying and selling goods or services offered through the Internet, or broadly to any type of electronic funds transfer.
[https://en.wikipedia.org/wiki/Payment_system]
===
A payment service provider offers merchants online services for accepting electronic payments by a variety of payment methods including credit card, bank-based payments such as direct debit, bank transfer, and real-time bank transfer based on online banking. Some PSPs provide services to process other next generation methods (Payment systems) including cash payments, wallets such as PayPal, Adyen, WebMoney, Payoneer, and Moneybookers, prepaid cards or vouchers, and even paper or e-check processing.

Typically, a PSP can connect to multiple acquiring banks, card, and payment networks. In many cases, the PSP will fully manage these technical connections, relationships with the external network, and bank accounts. This makes the merchant less dependent on financial institutions and free from the task of establishing these connections directly, especially when operating internationally.

Furthermore, a full-service PSP can offer risk management services for card and bank based payments, transaction payment matching, reporting, fund remittance and fraud protection in addition to multi-currency functionality and services.

PSP fees are typically levied in one of two ways: as a percentage of each transaction or a low fixed cost per transaction.

US-based on-line payment service providers are supervised by the Financial Crimes Enforcement Network (or FinCEN), a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat money laundering, terrorist financiers, and other financial crimes.
[http://en.wikipedia.org/wiki/Payment_service_provider]
A payment system is a system used for transferring money. What makes it a "system" is that it employs cash-substitutes; traditional payment systems are negotiable instruments such as drafts (e.g., checks) and documentary credits such as letter of credits. With the advent of computers and electronic communications a large number of alternative electronic payment systems have emerged. These include debit cards, credit cards, electronic funds transfers, direct credits, direct debits, internet banking and e-commerce payment systems. Some payment systems include credit mechanisms, but that is essentially a different aspect of payment. Payment systems are used in lieu of tendering cash in domestic and international transactions and consist of a major service provided by banks and other financial institutions.
Payment systems may be physical or electronic and each has their own procedures and protocols. Standardisation have allowed some of these systems and networks to grow to a global scale, but there are still many country and product specific systems. Examples of payment systems that have become globally available are credit card and automated teller machine networks. Specific forms of payment systems are also used to settle financial transactions for products in the equity markets, bond markets, currency markets, futures markets, derivatives markets, options markets and for transfer funds between financial institutions both domestically using clearing and Real Time Gross Settlement (RTGS) systems and internationally using the SWIFT network.

The term electronic payment can refer narrowly to e-commerce - a payment for buying and selling goods or services offered through the Internet, or broadly to any type of electronic funds transfer.
[http://en.wikipedia.org/wiki/Payment_system]

_DESCRIPTION:
A payment system is a system used for transferring money. What makes it a "system" is that it employs cash-substitutes; traditional payment systems are negotiable instruments such as drafts (e.g., checks) and documentary credits such as letter of credits. With the advent of computers and electronic communications a large number of alternative electronic payment systems have emerged. These include debit cards, credit cards, electronic funds transfers, direct credits, direct debits, internet banking and e-commerce payment systems. Some payment systems include credit mechanisms, but that is essentially a different aspect of payment. Payment systems are used in lieu of tendering cash in domestic and international transactions and consist of a major service provided by banks and other financial institutions.

Payment systems may be physical or electronic and each has their own procedures and protocols. Standardisation have allowed some of these systems and networks to grow to a global scale, but there are still many country and product specific systems. Examples of payment systems that have become globally available are credit card and automated teller machine networks. Specific forms of payment systems are also used to settle financial transactions for products in the equity markets, bond markets, currency markets, futures markets, derivatives markets, options markets and for transfer funds between financial institutions both domestically using clearing and Real Time Gross Settlement (RTGS) systems and internationally using the SWIFT network. Due to the backing of modern fiat currencies with government bonds, payment systems are a core part of modern monetary systems.

The term electronic payment can refer narrowly to e-commerce - a payment for buying and selling goods or services offered through the Internet, or broadly to any type of electronic funds transfer.
[http://en.wikipedia.org/wiki/Payment_system]

mnyscs'subsystem.trade-system

name::
* McsEngl.mnyscs'subsystem.trade-system,

SPECIFIC

* mnyscs.specific,

_SPECIFIC:
* digital-money-service-system#cptItsoft98#
* LETS##
* mutual-credit-system##

mnyscs.MUTUAL-CREDIT

name::
* McsEngl.mnyscs.MUTUAL-CREDIT,
* McsEngl.barter-exchange@cptEconomy,
* McsEngl.mutual-credit-clearing-system,
* McsEngl.mutual-credit-exchange-system,

_DESCRIPTION:
Mutual credit: a system by which units of credit are created at the moment of the transaction between individual users as a debit of one’s account and a credit of the other’s. Operating within agreed limits of credit and debt, members of a mutual-credit system effectively loan one another the capital necessary for the exchange of goods and services within the network, with the overall balance of all members’ accounts always equalling zero.
[http://community-currency.info/wp-content/uploads/2015/06/ccia-book-people-powered-money1.pdf]

_SPECIFIC:
* Bangla-Pesa-system##
* LETS##

mny'ADOPTION

name::
* McsEngl.mny'ADOPTION,
* McsEngl.adoption-of-currency@cptEconomy,
* McsEngl.acceptance-of-currency@cptEconomy,
* McsEngl.currency'adoption,
* McsEngl.mny'acceptance,
* McsEngl.mny'trust,
* McsEngl.mny'use,
* McsEngl.money'acceptance,
* McsEngl.money'adoption,
* McsEngl.money'use,
====== lagoGreek:
* McsElln.αποδοχή-νομίσματος@cptEconomy,
* McsElln.υιοθεσία-νομίσματος@cptEconomy,
* McsElln.υιοθέτηση-νομίσματος@cptEconomy,

_DESCRIPTION:
The economist Hyman Minsky espoused the maxim that 'everyone can create (issue) money, the problem is getting it accepted'.
Where mainstream money can be thought of as IOUs issued on the most part by banks as the legal tender to settle debts and taxes - community currencies cannot rely on legal rules to enforce their use.
They are essentially voluntary in terms of participation and, therefore, need to encourage use by creating a viable and valued market.
A currency?s value is mainly achieved by ensuring it is widely and reliably accepted.
It could thus be said that a complementary currency requires the creation of a complementary marketplace.
[http://localhost/WebsiteSgm/book/economy/ppm.2015.html#idCh5.7P1]

mny'society-uses-it

name::
* McsEngl.mny'society-uses-it,

mny'demurrage

name::
* McsEngl.mny'demurrage,
* McsEngl.demurrage@cptEconomy,

_DESCRIPTION:
Demurrage is a cost associated with owning or holding currency over a given period. It is sometimes referred to as a carrying cost of money. For commodity money such as gold, demurrage is in practice nothing more than the cost of storing and securing the gold. Demurrage is sometimes cited as having advantageous economic effects, usually in the context of complementary currency systems.
[http://en.wikipedia.org/wiki/Demurrage_(currency)]

mny'durability

name::
* McsEngl.mny'durability,

_DESCRIPTION:
Durability must be a-characteristic of money in order to be 'A-STORAGE-OF-VALUE' commodity.
[hmnSngo.2015-07-29]

SPECIFIC

_SPECIFIC:
* gold#cptEconomy9.1#

Alternatives stores of value
* real estate - ownership in actual deeds in protectible controllable land.
* precious metals - ownership in gold, silver, platinum, rhodium, iridium, Osmium, which are hard metals that can be exchanged for thousands of hours of human labor per ounce at any point in the future.
* precious stones, ancient artifacts, ancient coinage.
* collectibles, e.g. original art by a famous artist or antiques.
* livestock ownership and control of Live Hogs, Fish, Cows, Chickens. (see African currency)
* stock ownership in a company which is a system to exchange human labor for value.
* Equipment, backhoes, nail guns, roofing tiles, plywood, concrete, nails, generators, oil, fuel, bricks, sheet rock, solar panels, chainsaws, tubing, wiring, switches, furniture.

While these items may be inconvenient to trade daily or store, and may vary in value quite significantly, they rarely or never lose all value. This is the point of any store of value, to impose a natural risk management simply due to inherent stable demand for the underlying asset. It need not be a capital asset at all, merely have economic value that is not known to disappear even in the worst situation. In principle, this could be true of any industrial commodity, but gold and precious metals are generally favored because of their demand and rarity in nature, which reduces the risk of devaluation associated with increased production and supply.
[http://en.wikipedia.org/wiki/Store_of_value]

mny'divisibility

name::
* McsEngl.mny'divisibility,

mny'Demonetization

name::
* McsEngl.mny'Demonetization,
* McsEngl.demonetization,

_DESCRIPTION:
demonetization
Ending something (e.g. gold or silver) as no longer the legal tender of a country

_ADDRESS.WPG:
* https://cointelegraph.com/news/cashless-chaos-life-comes-to-a-halt-in-cash-starved-india-bitcoin-can-help,

mny'backness-relation-to-adoption

_CREATED: {2015-08-27}

name::
* McsEngl.mny'backness-relation-to-adoption,
* McsEngl.mny'adoption-relation-to-backness,

_DESCRIPTION:
If a-currency will lose its adoption, if it is backed you have a-satisfier, if it is NOT backed you have nothing.
[hmnSngo.2015-08-27]

SPECIFIC

_SPECIFIC:
* backed|guarantee|collateral-money (= secured by collateral: 'a collateral loan')
* unbacked|unguarantee|collateralNo-money
===
* εγγυημένα
* μη-εγγυημένα

RegulationEC2009/0924 (Cross-border payments)

_TITLE:
Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 September 2009 on cross-border payments in the Community and repealing Regulation (EC) No 2560/2001 (Text with EEA relevance)

_ADDRESS.WPG:
* http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32009R0924,

DirectiveEC2009/0110; L267/7; EMD

E-money Directive:
an EU directive determining legislation around the regulation of electronic forms of legal tender money.
The implementation in the different member states varies.
The E-money Directive also aims to increase competition and participation in this industry by opening it up to non-banks.
[http://community-currency.info/wp-content/uploads/2015/06/ccia-book-people-powered-money1.pdf]

http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32009L0110:
10.10.2009
EN
Official Journal of the European Union
L 267/7

DIRECTIVE 2009/110/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 16 September 2009

on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC

(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 the first and third sentences of Article 47(2) and Article 95 thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Economic and Social Committee (1),
Having regard to the opinion of the European Central Bank (2),
Acting in accordance with the procedure laid down in Article 251 of the Treaty (3),
Whereas:
(1)
Directive 2000/46/EC of the European Parliament and of the Council of 18 September 2000 on the taking up, pursuit of and prudential supervision of the business of electronic money institutions (4) was adopted in response to the emergence of new pre-paid electronic payment products and was intended to create a clear legal framework designed to strengthen the internal market while ensuring an adequate level of prudential supervision.
(2)
In its review of Directive 2000/46/EC the Commission highlighted the need to revise that Directive since some of its provisions were considered to have hindered the emergence of a true single market for electronic money services and the development of such user-friendly services.
(3)
Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market (5) has established a modern and coherent legal framework for payment services, including the coordination of national provisions on prudential requirements for a new category of payment service providers, namely payment institutions.
(4)
With the objective of removing barriers to market entry and facilitating the taking up and pursuit of the business of electronic money issuance, the rules to which electronic money institutions are subject need to be reviewed so as to ensure a level playing field for all payment services providers.
(5)
It is appropriate to limit the application of this Directive to payment service providers that issue electronic money. This Directive should not apply to monetary value stored on specific pre-paid instruments, designed to address precise needs that can be used only in a limited way, because they allow the electronic money holder to purchase goods or services only in the premises of the electronic money issuer or within a limited network of service providers under direct commercial agreement with a professional issuer, or because they can be used only to acquire a limited range of goods or services. An instrument should be considered to be used within such a limited network if it can be used only either for the purchase of goods and services in a specific store or chain of stores, or for a limited range of goods or services, regardless of the geographical location of the point of sale. Such instruments could include store cards, petrol cards, membership cards, public transport cards, meal vouchers or vouchers for services (such as vouchers for childcare, or vouchers for social or services schemes which subsidise the employment of staff to carry out household tasks such as cleaning, ironing or gardening), which are sometimes subject to a specific tax or labour legal framework designed to promote the use of such instruments to meet the objectives laid down in social legislation. Where such a specific-purpose instrument develops into a general-purpose instrument, the exemption from the scope of this Directive should no longer apply. Instruments which can be used for purchases in stores of listed merchants should not be exempted from the scope of this Directive as such instruments are typically designed for a network of service providers which is continuously growing.
(6)
It is also appropriate that this Directive not apply to monetary value that is used to purchase digital goods or services, where, by virtue of the nature of the good or service, the operator adds intrinsic value to it, e.g. in the form of access, search or distribution facilities, provided that the good or service in question can be used only through a digital device, such as a mobile phone or a computer, and provided that the telecommunication, digital or information technology operator does not act only as an intermediary between the payment service user and the supplier of the goods and services. This is a situation where a mobile phone or other digital network subscriber pays the network operator directly and there is neither a direct payment relationship nor a direct debtor-creditor relationship between the network subscriber and any third-party supplier of goods or services delivered as part of the transaction.
(7)
It is appropriate to introduce a clear definition of electronic money in order to make it technically neutral. That definition should cover all situations where the payment service provider issues a pre-paid stored value in exchange for funds, which can be used for payment purposes because it is accepted by third persons as a payment.
(8)
The definition of electronic money should cover electronic money whether it is held on a payment device in the electronic money holder’s possession or stored remotely at a server and managed by the electronic money holder through a specific account for electronic money. That definition should be wide enough to avoid hampering technological innovation and to cover not only all the electronic money products available today in the market but also those products which could be developed in the future.
(9)
The prudential supervisory regime for electronic money institutions should be reviewed and aligned more closely with the risks faced by those institutions. That regime should also be made coherent with the prudential supervisory regime applying to payment institutions under Directive 2007/64/EC. In this respect, the relevant provisions of Directive 2007/64/EC should apply mutatis mutandis to electronic money institutions without prejudice to the provisions of this Directive. A reference to ‘payment institution’ in Directive 2007/64/EC therefore needs to be read as a reference to electronic money institution; a reference to ‘payment service’ needs to be read as a reference to the activity of payment services and issuing electronic money; a reference to ‘payment service user’ needs to be read as a reference to payment service user and electronic money holder; a reference to ‘this Directive’ needs to be read as a reference to both Directive 2007/64/EC and this Directive; a reference to Title II of Directive 2007/64/EC needs to be read as a reference to Title II of Directive 2007/64/EC and Title II of this Directive; a reference to Article 6 of Directive 2007/64/EC needs to be read as a reference to Article 4 of this Directive; a reference to Article 7(1) of Directive 2007/64/EC needs to be read as a reference to Article 5(1) of this Directive; a reference to Article 7(2) of Directive 2007/64/EC needs to be read as a reference to Article 5(6) of this Directive; a reference to Article 8 of Directive 2007/64/EC needs to be read as a reference to Article 5(2) to (5) of this Directive; a reference to Article 9 of Directive 2007/64/EC needs to be read as a reference to Article 7 of this Directive; a reference to Article 16(1) of Directive 2007/64/EC needs to be read as a reference to Article 6(1)(c) to (e) of this Directive; and a reference to Article 26 of Directive 2007/64/EC needs to be read as a reference to Article 9 of this Directive.
(10)
It is recognised that electronic money institutions distribute electronic money, including by selling or reselling electronic money products to the public, providing a means of distributing electronic money to customers, or of redeeming electronic money on the request of customers or of topping up customers’ electronic money products, through natural or legal persons on their behalf, according to the requirements of their respective business models. While electronic money institutions should not be permitted to issue electronic money through agents, they should none the less be permitted to provide the payment services listed in the Annex to Directive 2007/64/EC through agents, where the conditions in Article 17 of that Directive are met.
(11)
There is a need for a regime for initial capital combined with one for ongoing capital to ensure an appropriate level of consumer protection and the sound and prudent operation of electronic money institutions. Given the specificity of electronic money, an additional method for calculating ongoing capital should be provided for. Full supervisory discretion to ensure that the same risks are treated in the same way for all payment service providers and that the method of calculation encompasses the specific business situation of a given electronic money institution should be preserved. In addition, provision should be made for electronic money institutions to be required to keep the funds of electronic money holders separate from the funds of the electronic money institution for other business activities. Electronic money institutions should also be subject to effective anti-money laundering and anti-terrorist financing rules.
(12)
The operation of payment systems is an activity which is not reserved to specific categories of institution. It is important to recognise, however, that, as is the case for payment institutions, it is also possible for the operation of payment systems to be carried out by electronic money institutions.
(13)
The issuance of electronic money does not constitute a deposit-taking activity pursuant to Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (6), in view of its specific character as an electronic surrogate for coins and banknotes, which is to be used for making payments, usually of limited amount and not as means of saving. Electronic money institutions should not be allowed to grant credit from the funds received or held for the purpose of issuing electronic money. Electronic money issuers should not, moreover, be allowed to grant interest or any other benefit unless those benefits are not related to the length of time during which the electronic money holder holds electronic money. The conditions for granting and maintaining authorisation as electronic money institutions should include prudential requirements that are proportionate to the operational and financial risks faced by such bodies in the course of their business related to the issuance of electronic money, independently of any other commercial activities carried out by the electronic money institution.
(14)
It is necessary, however, to preserve a level playing field between electronic money institutions and credit institutions with regard to the issuance of electronic money to ensure fair competition for the same service among a wider range of institutions for the benefit of electronic money holders. This should be achieved by balancing the less cumbersome features of the prudential supervisory regime applying to electronic money institutions against provisions that are more stringent than those applying to credit institutions, notably as regards the safeguarding of the funds of an electronic money holder. Given the crucial importance of safeguarding, it is necessary that the competent authorities be informed in advance of any material change, such as a change in the safeguarding method, a change in the credit institution where safeguarded funds are deposited, or a change in the insurance undertaking or credit institution which insured or guaranteed the safeguarded funds.
(15)
The rules governing branches of electronic money institutions which have their head office outside the Community should be analogous in all Member States. It is important to provide that such rules not be more favourable than those for branches of electronic money institutions which have their head office in another Member State. The Community should be able to conclude agreements with third countries providing for the application of rules which accord branches of electronic money institutions which have their head office outside the Community the same treatment throughout the Community. The branches of electronic money institutions which have their head office outside the Community should benefit from neither the freedom of establishment under Article 43 of the Treaty in Member States other than those in which they are established nor the freedom to provide services under the second paragraph of Article 49 of the Treaty.
(16)
It is appropriate to allow Member States to waive the application of certain provisions of this Directive as regards institutions issuing only a limited amount of electronic money. institutions benefiting from such a waiver should not have the right under this Directive to exercise the freedom of establishment or the freedom to provide services and they should not indirectly exercise those rights as members of a payment system. It is desirable, however, to register the details of all entities providing electronic money services, including those benefiting from a waiver. For that purpose, Member States should enter such entities in a register of electronic money institutions.
(17)
For prudential reasons, Member States should ensure that only electronic money institutions duly authorised or benefiting from a waiver in accordance with this Directive, credit institutions authorised in accordance with Directive 2006/48/EC, post office giro institutions entitled under national law to issue electronic money, institutions referred to in Article 2 of Directive 2006/48/EC, the European Central Bank, national central banks when not acting in their capacity as monetary authority or other public authorities and Member States or their regional or local authorities when acting in their capacity as public authorities may issue electronic money.
(18)
Electronic money needs to be redeemable to preserve the confidence of the electronic money holder. Redeemability does not imply that the funds received in exchange for electronic money should be regarded as deposits or other repayable funds for the purpose of Directive 2006/48/EC. Redemption should be possible at any time, at par value without any possibility to agree a minimum threshold for redemption. Redemption should, in general, be granted free of charge. However, in cases duly specified in this Directive it should be possible to request a proportionate and cost-based fee without prejudice to national legislation on tax or social matters or any obligations on the electronic money issuer under other relevant Community or national legislation, such as anti-money laundering and anti-terrorist financing rules, any action targeting the freezing of funds or any specific measure linked to the prevention and investigation of crimes.
(19)
Out-of-court complaint and redress procedures for the settlement of disputes should be at the disposal of electronic money holders. Chapter 5 of Title IV of Directive 2007/64/EC should therefore apply mutatis mutandis in the context of this Directive, without prejudice to the provisions of this Directive. A reference to ‘payment service provider’ in Directive 2007/64/EC therefore needs to be read as a reference to electronic money issuer; a reference to ‘payment service user’ needs to be read as a reference to electronic money holder; and a reference to Titles III and IV of Directive 2007/64/EC needs to be read as a reference to Title III of this Directive.
(20)
The measures necessary for the implementation of this Directive should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (7).
(21)
In particular, the Commission should be empowered to adopt implementing provisions in order to take account of inflation or technological and market developments and to ensure a convergent application of the exemptions under this Directive. Since such measures are of general scope and are designed to amend non-essential elements of this Directive they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC.
(22)
The efficient functioning of this Directive will need to be reviewed. The Commission should therefore be required to produce a report three years after the deadline for transposition of this Directive. Member States should provide to the Commission information regarding the application of some of the provisions of this Directive.
(23)
In the interests of legal certainty, transitional arrangements should be made to ensure that electronic money institutions which have taken up their activities in accordance with the national laws transposing Directive 2000/46/EC are able to continue those activities within the Member State concerned for a specified period. That period should be longer for electronic money institutions that have benefited from the waiver provided for in Article 8 of Directive 2000/46/EC.
(24)
This Directive introduces a new definition of electronic money, the issuance of which can benefit from the derogations in Articles 34 and 53 of Directive 2007/64/EC. Therefore, the simplified customer due diligence regime for electronic money institutions under Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (8) should be amended accordingly.
(25)
Pursuant to Directive 2006/48/EC, electronic money institutions are considered to be credit institutions, although they can neither receive deposits from the public nor grant credit from funds received from the public. Given the regime introduced by this Directive, it is appropriate to amend the definition of credit institution in Directive 2006/48/EC in order to ensure that electronic money institutions are not considered to be credit institutions. However, credit institutions should continue to be allowed to issue electronic money and to carry on such activity Community-wide, subject to mutual recognition and to the comprehensive prudential supervisory regime applying to them in accordance with the Community legislation in the field of banking. In the interests of maintaining a level playing field, however, credit institutions should, alternatively, be able to carry out that activity through a subsidiary under the prudential supervisory regime of this Directive, rather than under Directive 2006/48/EC.
(26)
The provisions of this Directive replace all corresponding provisions of Directive 2000/46/EC. Directive 2000/46/EC should therefore be repealed.
(27)
Since the objective of this Directive cannot be sufficiently achieved by the Member States because it requires the harmonisation of many different rules currently existing in the legal systems of the various Member States and can therefore 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 Directive does not go beyond what is necessary in order to achieve that objective.
(28)
In accordance with point 34 of the Interinstitutional Agreement on better law-making (9), Member States are encouraged to draw up, for themselves and in the interest of the Community, their own tables illustrating, as far as possible, the correlation between this Directive and the transposition measures and to make them public,

HAVE ADOPTED THIS DIRECTIVE:

DirectiveEC2007/0064; L319/1

_ADDRESS.WPG:
* http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32007L0064

5.12.2007
EN
Official Journal of the European Union
L 319/1
DIRECTIVE 2007/64/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 13 November 2007
on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC
(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 the first and third sentences of Article 47(2) and Article 95 thereof,
Having regard to the proposal from the Commission,
Having consulted the European Economic and Social Committee,
Having regard to the opinion of the European Central Bank (1),
Acting in accordance with the procedure laid down in Article 251 of the Treaty (2),
Whereas:
(1)
It is essential for the establishment of the internal market that all internal frontiers in the Community be dismantled so as to enable the free movement of goods, persons, services and capital. The proper operation of the single market in payment services is therefore vital. At present, however, the lack of harmonisation in this area hinders the operation of that market.
(2)
Currently, the payment services markets of the Member States are organised separately, along national lines and the legal framework for payment services is fragmented into 27 national legal systems.
(3)
Several Community acts have already been adopted in this area, namely Directive 97/5/EC of the European Parliament and of the Council of 27 January 1997 on cross-border credit transfers (3) and Regulation (EC) No 2560/2001 of the European Parliament and of the Council of 19 December 2001 on cross-border payments in euro (4), but these have not sufficiently remedied this situation any more than have Commission Recommendation 87/598/EEC of 8 December 1987 on a European Code of Conduct relating to electronic payment (relations between financial institutions, traders and service establishments, and consumers) (5), Commission Recommendation 88/590/EEC of 17 November 1988 concerning payment systems, and in particular the relationship between cardholder and card issuer (6), or Commission Recommendation 97/489/EC of 30 July 1997 concerning transactions by electronic payment instruments and in particular the relationship between issuer and holder (7). These measures continue to be insufficient. The co-existence of national provisions and an incomplete Community framework gives rise to confusion and a lack of legal certainty.
(4)
It is vital, therefore, to establish at Community level a modern and coherent legal framework for payment services, whether or not the services are compatible with the system resulting from the financial sector initiative for a single euro payments area, which is neutral so as to ensure a level playing field for all payment systems, in order to maintain consumer choice, which should mean a considerable step forward in terms of consumer cost, safety and efficiency, as compared with the present national systems.
(5)
That legal framework should ensure the coordination of national provisions on prudential requirements, the access of new payment service providers to the market, information requirements, and the respective rights and obligations of payment services users and providers. Within that framework, the provisions of Regulation (EC) No 2560/2001, which created a single market for euro payments as far as prices are concerned, should be maintained. The provisions of Directive 97/5/EC and the recommendations made in Recommendations 87/598/EEC, 88/590/EEC and 97/489/EC should be integrated in a single act with binding force.
(6)
However, it is not appropriate for that legal framework to be fully comprehensive. Its application should be confined to payment service providers whose main activity consists in the provision of payment services to payment service users. Nor is it appropriate for it to apply to services where the transfer of funds from the payer to the payee or their transport is executed solely in bank notes and coins or where the transfer is based on a paper cheque, paper-based bill of exchange, promissory note or other instrument, paper-based vouchers or cards drawn upon a payment service provider or other party with a view to placing funds at the disposal of the payee. Furthermore, a differentiation should be made in the case of means offered by telecommunication, information technology or network operators to facilitate purchasing of digital goods or services, such as ring tones, music or digital newspapers, besides traditional voice services and their distribution to digital devices. The content of these goods or services may be produced either by a third party or by the operator, who may add intrinsic value to them in the form of access, distribution or search facilities. In the latter case, where the goods or services are distributed by one of those operators, or, for technical reasons, by a third party, and where they can be used only through digital devices, such as mobile phones or computers, that legal framework should not apply as the activity of the operator goes beyond a mere payment transaction. However, it is appropriate for that legal framework to apply to cases where the operator acts only as an intermediary who simply arranges for payment to be made to a third-party supplier.
(7)
Money remittance is a simple payment service that is usually based on cash provided by a payer to a payment service provider, which remits the corresponding amount, for example via communication network, to a payee or to another payment service provider acting on behalf of the payee. In some Member States supermarkets, merchants and other retailers provide to the public a corresponding service enabling the payment of utility and other regular household bills. Those bill-paying services should be treated as money remittance as defined in this Directive, unless the competent authorities consider the activity to fall under another payment service listed in the Annex.
(8)
It is necessary to specify the categories of payment service providers which may legitimately provide payment services throughout the Community, namely, credit institutions which take deposits from users that can be used to fund payment transactions and which should continue to be subject to the prudential requirements under Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (8), electronic money institutions which issue electronic money that can be used to fund payment transactions and which should continue to be subject to the prudential requirements under Directive 2000/46/EC of the European Parliament and of the Council of 18 September 2000 on the taking-up, pursuit and prudential supervision of the business of electronic money institutions (9), and post office giro institutions which are so entitled under national law.
(9)
This Directive should lay down rules on the execution of payment transactions where the funds are electronic money, as defined in Article 1(3)(b) of Directive 2000/46/EC. This Directive should, however, neither regulate issuance of electronic money nor amend the prudential regulation of electronic money institutions as provided for in Directive 2000/46/EC. Therefore, payment institutions should not be allowed to issue electronic money.
(10)
However, in order to remove legal barriers to market entry, it is necessary to establish a single licence for all providers of payment services which are not connected to taking deposits or issuing electronic money. It is appropriate, therefore, to introduce a new category of payment service providers, ‘payment institutions’, by providing for the authorisation, subject to a set of strict and comprehensive conditions, of legal persons outside the existing categories to provide payment services throughout the Community. Thus, the same conditions would apply Community-wide to such services.
(11)
The conditions for granting and maintaining authorisation as payment institutions should include prudential requirements proportionate to the operational and financial risks faced by such bodies in the course of their business. In this connection, there is a need for a sound regime of initial capital combined with ongoing capital which could be elaborated in a more sophisticated way in due course depending on the needs of the market. Due to the range of variety in the payments services area, this Directive should allow various methods combined with a certain range of supervisory discretion to ensure that the same risks are treated the same way for all payment service providers. The requirements for the payment institutions should reflect the fact that payment institutions engage in more specialised and limited activities, thus generating risks that are narrower and easier to monitor and control than those that arise across the broader spectrum of activities of credit institutions. In particular, payment institutions should be prohibited from accepting deposits from users and permitted to use funds received from users only for rendering payment services. Provision should be made for client funds to be kept separate from the payment institution's funds for other business activities. Payment institutions should also be made subject to effective anti-money laundering and anti-terrorist financing requirements.
(12)
Payment institutions should draw up their annual and consolidated accounts in accordance with Council Directive 78/660/EEC of 25 July 1978 on the annual accounts of certain types of companies (10) and, where applicable, Council Directive 83/349/EEC of 13 June 1983 on consolidated accounts (11) and Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions (12). The annual accounts and consolidated accounts should be audited, unless the payment institution is exempted from this obligation under Directive 78/660/EEC and, where applicable, Directives 83/349/EEC and 86/635/EEC.
(13)
This Directive should regulate the granting of credit by payment institutions, i.e. the granting of credit lines and the issuance of credit cards, only where it is closely linked to payment services. Only if credit is granted in order to facilitate payment services and such credit is of a short-term nature and is granted for a period not exceeding twelve months, including on a revolving basis, is it appropriate to allow payment institutions to grant such credit with regard to their cross-border activities, on condition that it is refinanced using mainly the payment institution's own funds, as well as other funds from the capital markets, but not the funds held on behalf of clients for payment services. The above should be without prejudice to Council Directive 87/102/EEC of 22 December 1986 for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit (13) or other relevant Community or national legislation regarding conditions for granting credit to consumers not harmonised by this Directive.
(14)
It is necessary for the Member States to designate the authorities responsible for granting authorisations to payment institutions, carrying out controls and deciding on the withdrawal of those authorisations. In order to ensure equality of treatment, Member States should apply to payment institutions no requirements other than those provided for in this Directive. However, all decisions made by the competent authorities should be contestable before the courts. In addition, the tasks of the competent authorities should be without prejudice to the oversight of payment systems, which, in line with the fourth indent of Article 105(2) of the Treaty, is a task to be carried out by the European System of Central Banks.
(15)
Given the desirability of registering the identity and whereabouts of all persons providing remittance services and of according them all a measure of acceptance, irrespective of whether they are able to meet the full range of conditions for authorisation as payment institutions, so that none are forced into the black economy and bring all persons providing remittance service within the ambit of certain minimum legal and regulatory requirements, it is appropriate and in line with the rationale of Special Recommendation VI of the Financial Action Task Force on Money Laundering to provide a mechanism whereby payment service providers unable to meet all those conditions may nevertheless be treated as payment institutions. For those purposes, Member States should enter such persons in the register of payment institutions while not applying all or part of the conditions for authorisation. However, it is essential to make the possibility of waiver subject to strict requirements relating to the volume of payment transactions. Payment institutions benefiting from a waiver should have neither the right of establishment nor the freedom to provide services, nor should they indirectly exercise those rights when being a member of a payment system.
(16)
It is essential for any payment service provider to be able to access the services of technical infrastructures of payment systems. Such access should, however, be subject to appropriate requirements in order to ensure integrity and stability of those systems. Each payment service provider applying for a participation in a payment system should furnish proof to the participants of the payment system that its internal arrangements are sufficiently robust against all kinds of risk. These payment systems typically include e.g. the four-party card schemes as well as major systems processing credit transfers and direct debits. In order to ensure equality of treatment throughout the Community as between the different categories of authorised payment service providers, according to the terms of their licence, it is necessary to clarify the rules concerning access to the provision of payment services and access to payment systems. Provision should be made for the non-discriminatory treatment of authorised payment institutions and credit institutions so that any payment service provider competing in the internal market is able to use the services of the technical infrastructures of these payment systems under the same conditions. It is appropriate to provide for different treatment for authorised payment service providers and for those benefiting from a waiver under this Directive as well as from the waiver under the Article 8 of the Directive 2000/46/EC, due to the differences in their prudential framework. In any case differences in price conditions should be allowed only when this is motivated by differences in costs induced by the payment service providers. This should be without prejudice to Member States' right to limit access to systemically important systems in accordance with Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (14) and without prejudice to the competence of the European Central Bank and the European System of Central Banks (ESCB), as laid down in Article 105(2) of the Treaty and Article 3(1) and Article 22 of the Statute of the ESCB, concerning access to payment systems.
(17)
The provisions of the access to payment systems should not apply to systems set up and operated by a single payment service provider. Those payment systems can operate either in direct competition to payment systems, or, more typically, in a market niche not adequately covered by payment systems. They typically cover three-party schemes, such as three party card schemes, payment services offered by telecommunication providers or money remittance services where the scheme operator is the payment service provider to both the payer and payee as well as internal systems of banking groups. In order to stimulate the competition that can be provided by such payment systems to established mainstream payment systems, it should in principle not be appropriate to grant third parties access to these payment systems. Nevertheless, such systems should always be subject to Community and national competition rules which may require that access be granted to the schemes in order to maintain effective competition in payments markets.
(18)
A set of rules should be established in order to ensure transparency of conditions and information requirements for payment services.
(19)
This Directive should apply neither to payment transactions made in cash since a single payments market for cash already exists nor to payment transactions based on paper cheques since, by their nature, they cannot be processed as efficiently as other means of payment. Good practice in this area should, however, be based on the principles set out in this Directive.
(20)
As consumers and enterprises are not in the same position, they do not need the same level of protection. While it is important to guarantee consumers' rights by provisions which cannot be derogated from by contract, it is reasonable to let enterprises and organisations agree otherwise. However, Member States should have the possibility to provide that micro-enterprises, as defined by Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (15), should be treated in the same way as consumers. In any case, certain core provisions of this Directive should always be applicable irrespective of the status of the user.
(21)
This Directive should specify the obligations on payment service providers as regards the provision of information to the payment service users who should receive the same high level of clear information about payment services in order to make well-informed choices and be able to shop around within the EU. In the interest of transparency this Directive should lay down the harmonised requirements needed to ensure that necessary and sufficient information is given to the payment service users with regard to the payment service contract and the payment transactions. In order to promote smooth functioning of the single market in payment services, Member States should be able to adopt only those information provisions laid down in this Directive.
(22)
Consumers should be protected against unfair and misleading practices in line with Directive 2005/29/EC of the European Parliament and the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the Internal Market (16) as well as Directive 2000/31/EC of the European Parliament and the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce) (17) and Directive 2002/65/EC of the European Parliament and the Council of 23 September 2002 concerning the distance marketing of consumer financial services (18). The additional provisions in those Directives continue to be applicable. However, the relationship of the pre-contractual information requirements between this Directive and Directive 2002/65/EC should, in particular, be clarified.
(23)
The information required should be proportionate to the needs of users and communicated in a standard manner. However, the information requirements for a single payment transaction should be different from those of a framework contract which provides for the series of payment transactions.
(24)
In practice, framework contracts and the payment transactions covered by them are far more common and economically important than single payment transactions. If there is a payment account or a specific payment instrument, a framework contract is required. Therefore, the requirements for prior information on framework contracts should be quite comprehensive and information should always be provided on paper or on another durable medium, such as printouts by account printers, floppy disks, CD-ROMs, DVDs and hard drives of personal computers on which electronic mail can be stored, and Internet sites, as long as such sites are accessible for future reference for a period of time adequate for the purposes of information and allow the unchanged reproduction of the information stored. However, it should be possible for the payment service provider and the payment service user to agree in the framework contract on the manner in which subsequent information on executed payment transactions is given, for instance, that in Internet banking all information on the payment account is made available online.
(25)
In single payment transactions only the essential information should always be given on the payment service provider's own initiative. As the payer is usually present when he gives the payment order, it is not necessary to require that information should in every case be provided on paper or on another durable medium. The payment service provider may give information orally over the counter or make it otherwise easily accessible, for example by keeping the conditions on a notice board on the premises. Information should also be given on where other more detailed information is available (e.g. the address of the website). However, if the consumer so requests, the essential information should be given on paper or on another durable medium.
(26)
This Directive should provide for the consumer's right to receive relevant information free of charge before he is bound by any payment service contract. The consumer should also be able to request prior information as well as the framework contract, on paper, free of charge at any time during the contractual relationship, so as to enable him to compare payment service providers' services and their conditions and in case of any dispute verify his contractual rights and obligations. Those provisions should be compatible with Directive 2002/65/EC. The explicit provisions on free information in this Directive should not have the effect of allowing charges to be imposed for the provision of information to consumers under other applicable Directives.
(27)
The way in which the required information is to be given by the payment service provider to the payment service user should take into account the needs of the latter as well as practical technical aspects and cost-efficiency depending on the situation with regard to the agreement in the respective payment service contract. Thus, this Directive should distinguish between two ways in which information is to be given by the payment service provider: either the information should be provided, i.e. actively communicated by the payment service provider at the appropriate time as required by this Directive without further prompting by the payment service user, or the information should be made available to the payment service user, taking into account any request he may have for further information. In the latter case, the payment service user should take some active steps in order to obtain the information, such as requesting it explicitly from the payment service provider, logging into bank account mail box or inserting a bank card into printer for account statements. For such purposes the payment service provider should ensure that access to the information is possible and that the information is available to the payment service user.
(28)
In addition, the consumer should receive basic information on executed payment transactions for no additional charge. In the case of a single payment transaction the payment service provider should not charge separately for this information. Similarly, the subsequent monthly information on payment transactions under a framework contract should be given free of charge. However, taking into account the importance of transparency in pricing and differing customer needs, the parties should be able to agree on charges for more frequent or additional information. In order to take into account different national practices, Member States should be allowed to set rules requiring that monthly paper-based statements of payment accounts are always to be given free of charge.
(29)
In order to facilitate customer mobility, it should be possible for consumers to terminate a framework contract after the expiry of a year without incurring charges. For consumers, the period of notice agreed should be no longer than a month, and for payment service providers no shorter than two months. This Directive should be without prejudice to the payment service provider's obligation to terminate the payment service contract in exceptional circumstances under other relevant Community or national legislation, such as legislation on money laundering and terrorist financing, any action targeting the freezing of funds, or any specific measure linked to the prevention and investigation of crimes.
(30)
Low value payment instruments should be a cheap and easy-to-use alternative in the case of low-priced goods and services and should not be overburdened by excessive requirements. The relevant information requirements and rules on their execution should therefore be limited to essential information, taking also into account technical capabilities that can justifiably be expected from instruments dedicated to low value payments. Despite the lighter regime payment service users should benefit from adequate protection considering the limited risks posed by those payment instruments, especially with regard to prepaid payment instruments.
(31)
In order to reduce the risks and consequences of unauthorised or incorrectly executed payment transactions the payment service user should inform the payment service provider as soon as possible about any contestations concerning allegedly unauthorised or incorrectly executed payment transactions provided that the payment service provider has fulfilled his information obligations under this Directive. If the notification deadline is met by the payment service user, he should be able to pursue those claims within the prescription periods pursuant to national law. This Directive should not affect other claims between payment service users and payment service providers.
(32)
In order to provide an incentive for the payment service user to notify, without undue delay, his provider of any theft or loss of a payment instrument and thus to reduce the risk of unauthorised payment transactions, the user should be liable only for a limited amount, unless the payment service user has acted fraudulently or with gross negligence. Moreover, once a user has notified a payment service provider that his payment instrument may have been compromised, the user should not be required to cover any further losses stemming from unauthorised use of that instrument. This Directive should be without prejudice to the payment service providers' responsibility for technical security of their own products.
(33)
In order to assess possible negligence by the payment service user, account should be taken of all the circumstances. The evidence and degree of alleged negligence should be evaluated according to national law. Contractual terms and conditions relating to the provision and use of a payment instrument, the effect of which would be to increase the burden of proof on the consumer or to reduce the burden of proof on the issuer should be considered null and void.
(34)
However, Member States should be able to establish less stringent rules than mentioned above in order to maintain existing levels of consumer protection and promote trust in the safe usage of electronic payment instruments. The fact that different payment instruments involve different risks should be taken into account accordingly thus promoting the issuance of safer instruments. Member States should be allowed to reduce or completely waive the payer's liability except where the payer has acted fraudulently.
(35)
Provisions should be made for the allocation of losses in the case of unauthorised payment transactions. Different provisions may apply to payment service users who are not consumers, since such users are normally in a better position to assess the risk of fraud and take countervailing measures.
(36)
This Directive should lay down rules for a refund to protect the consumer when the executed payment transaction exceeds the amount which could reasonably have been expected. Payment service providers should be able to provide even more favourable terms to their customers and, for example, refund any disputed payment transactions. In cases where the user makes a claim for the refund of a payment transaction refund rights should affect neither the liability of the payer vis-ΰ-vis the payee from the underlying relationship, e.g. for goods or services ordered, consumed or legitimately charged, nor the users rights with regard to revocation of a payment order.
(37)
For financial planning and the fulfilment of payment obligations in due time, consumers and enterprises need to have certainty on the length of time that the execution of a payment order takes. Therefore, this Directive should introduce a point in time at which rights and obligations take effect, namely, when the payment service provider receives the payment order, including when he has had the opportunity to receive it through the means of communication agreed in the payment service contract, notwithstanding any prior involvement in the process leading up to the creation and transmission of the payment order, e.g. security and availability of funds checks, information on the use of the personal identity number or issuance of a payment promise. Furthermore, the receipt of a payment order should occur when the payer's payment service provider receives the payment order to be debited from the payer's account. The day or moment in time when a payee transmits to his service provider payment orders for the collection e.g. of card payment or of direct debits or when the payee is granted a pre-financing on the related amounts by his payment service provider (by way of a contingent credit to his account) should have no relevance in this respect. Users should be able to rely on the proper execution of a complete and valid payment order if the payment service provider has no contractual or statutory ground for refusal. If the payment service provider refuses a payment order, the refusal and the reason therefor should be communicated to the payment service user at the earliest opportunity subject to the requirements of Community and national law.
(38)
In view of the speed with which modern fully automated payment systems process payment transactions, which means that after a certain point in time payment orders cannot be revoked without high manual intervention costs, it is necessary to specify a clear deadline for payment revocations. However, depending on the type of the payment service and the payment order, the point in time may be varied by agreement between the parties. Revocation, in this context, is applicable only to the relationship between a payment service user and payment service provider, thus being without prejudice to the irrevocability and finality of payment transactions in payment systems.
(39)
Such irrevocability should not affect a payment service provider's right or obligation under the laws of some Member States, based on the payer's framework contract or national laws, regulations, administrative provisions or guidelines, to reimburse the payer with the amount of the executed payment transaction in the event of a dispute between the payer and the payee. Such reimbursement should be considered to be a new payment order. Except for those cases, legal disputes arising within the relationship underlying the payment order should be settled only between the payer and the payee.
(40)
It is essential, for the fully integrated straight-through processing of payments and for legal certainty with respect to the fulfilment of any underlying obligation between payment service users, that the full amount transferred by the payer should be credited to the account of the payee. Accordingly, it should not be possible for any of the intermediaries involved in the execution of payment transactions to make deductions from the amount transferred. However, it should be possible for the payee to enter into an agreement with his payment service provider under which the latter may deduct his own charges. Nevertheless, in order to enable the payee to verify that the amount due is correctly paid, subsequent information provided on the payment transaction should indicate not only the full amount of funds transferred but also the amount of any charges.
(41)
With regard to charges, experience has shown that the sharing of charges between a payer and a payee is the most efficient system since it facilitates the straight-through processing of payments. Provision should therefore be made for charges to be levied, in the normal course, directly on the payer and the payee by their respective payment service providers. However, that should apply only where the payment transaction does not require currency exchange. The amount of any charges levied may also be zero as the provisions of this Directive do not affect the practice whereby the payment service provider does not charge consumers for crediting their accounts. Similarly, depending on the contract terms, a payment service provider may charge only the payee (merchant) for the use of the payment service, which has the effect that no charges are imposed on the payer. The charging of the payment systems may be in the form of a subscription fee. The provisions on the amount transferred or any charges levied have no direct impact on pricing between payment service providers or any intermediaries.
(42)
In order to promote transparency and competition, the payment service provider should not prevent the payee from requesting a charge from the payer for using a specific payment instrument. While the payee should be free to levy charges for the use of a certain payment instrument, Member States may decide whether they forbid or limit any such practice where, in their view, this may be warranted in view of abusive pricing or pricing which may have a negative impact on the use of a certain payment instrument taking into account the need to encourage competition and the use of efficient payment instruments.
(43)
In order to improve the efficiency of payments throughout the Community, all payment orders initiated by the payer and denominated in euro or the currency of a Member State outside the euro area, including credit transfers and money remittances, should be subject to a maximum one-day execution time. For all other payments, such as payments initiated by or through a payee, including direct debits and card payments, in the absence of an explicit agreement between the payment service provider and the payer setting a longer execution time, the same one-day execution time should apply. The periods above could be extended by an additional business day, if a payment order is given on paper. This allows the continued provision of payment services for those consumers who are used to paper documents only. When a direct debit scheme is used the payee's payment service provider should transmit the collection order within the time limits agreed between the payee and his payment service provider, enabling settlement at the agreed due date. In view of the fact that national payment infrastructures are often highly efficient and in order to prevent any deterioration in current service levels, Member States should be allowed to maintain or set rules specifying an execution time shorter than one business day, where appropriate.
(44)
The provisions on execution for the full amount and execution time should constitute good practice where one of the service providers is not located in the Community.
(45)
It is essential for payment service users to know the real costs and charges of payment services in order to make their choice. Accordingly, the use of non-transparent pricing methods should not be allowed, since it is commonly accepted that those methods make it extremely difficult for users to establish the real price of the payment service. Specifically, the use of value dating to the disadvantage of the user should not be permitted.
(46)
The smooth and efficient functioning of the payment system depends on the user being able to rely on the payment service provider executing the payment transaction correctly and within the agreed time. Usually, the provider is in the position to assess the risks involved in the payment transaction. It is the provider that provides the payments system, makes arrangements to recall misplaced or wrongly allocated funds and decides in most cases on the intermediaries involved in the execution of a payment transaction. In view of all those considerations, it is entirely appropriate, except under abnormal and unforeseeable circumstances, to impose liability on the payment service provider in respect of execution of a payment transaction accepted from the user, except for the payee's payment service provider's acts and omissions for whose selection solely the payee is responsible. However, in order not to leave the payer unprotected in unlikely constellations where it may remain open (non liquet) whether the payment amount was duly received by the payee's payment service provider or not, the corresponding burden of proof should lie upon the payer's payment service provider. As a rule, it can be expected that the intermediary institution, usually a ‘neutral’ body like a central bank or a clearing house, transferring the payment amount from the sending to the receiving payment service provider will store the account data and be able to furnish the latter whenever this may be necessary. Whenever the payment amount has been credited to the receiving payment service provider's account, the payee should immediately have a claim against his payment service provider for credit to his account.
(47)
The payer's payment service provider should assume liability for correct payment execution, including, in particular the full amount of the payment transaction and execution time, and full responsibility for any failure by other parties in the payment chain up to the account of the payee. As a result of that liability the payment service provider of the payer should, where the full amount is not credited to the payee's payment service provider, correct the payment transaction or without undue delay refund to the payer the relevant amount of that transaction, without prejudice to any other claims which may be made in accordance with national law. This Directive should concern only contractual obligations and responsibilities between the payment service user and his payment service provider. However, the proper functioning of credit transfers and other payment services requires that payment service providers and their intermediaries, such as processors, have contracts where their mutual rights and obligations are agreed upon. Questions related to liabilities form an essential part of these uniform contracts. To ensure the reliability among payment service providers and intermediaries taking part in a payment transaction, legal certainty is necessary to the effect that a non-responsible payment service provider is compensated for losses incurred or sums paid under the provisions of this Directive relating to liability. Further rights and details of content of recourse and how to handle claims towards the payment service provider or intermediary attributable to a defective payment transaction should be left to be defined by contractual arrangements.
(48)
It should be possible for the payment service provider to specify unambiguously the information required to execute a payment order correctly. On the other hand, however, in order to avoid fragmentation and jeopardising the setting-up of integrated payment systems in the Community, Member States should not be allowed to require a particular identifier to be used for payment transactions. However, this should not prevent Member States from requiring the payment service provider of the payer to act in due diligence and verify, where technically possible and without requiring manual intervention, the coherence of the unique identifier, and where the unique identifier is found to be incoherent, to refuse the payment order and inform the payer thereof. The liability of the payment service provider should be limited to the correct execution of the payment transaction in accordance with the payment order of the payment service user.
(49)
In order to facilitate effective fraud prevention and combat payment fraud across the Community, provision should be made for the efficient exchange of data between payment service providers who should be allowed to collect, process and exchange personal data relating to persons involved in payment fraud. All those activities should be conducted in compliance with Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (19).
(50)
It is necessary to ensure the effective enforcement of the provisions of national law adopted pursuant to this Directive. Appropriate procedures should therefore be established by means of which it will be possible to pursue complaints against payment service providers which do not comply with those provisions and to ensure that, where appropriate, effective, proportionate and dissuasive penalties are imposed.
(51)
Without prejudice to the right of customers to bring action in the courts, Member States should ensure an easily accessible and cost-sensitive out-of-court resolution of conflicts between payment service providers and consumers arising from the rights and obligations set out in this Directive. Article 5(2) of the Rome Convention on the law applicable to contractual obligations (20) ensures that the protection afforded to consumers by the mandatory rules of the law of the country in which they have their habitual residence may not be undermined by any contractual terms on law applicable.
(52)
Member States should determine whether the competent authorities designated for granting authorisation to payment institutions might also be the competent authorities with regard to out-of-court complaint and redress procedures.
(53)
This Directive should be without prejudice to provisions of national law relating to the consequences as regards liability of inaccuracy in the expression or transmission of a statement.
(54)
Since it is necessary to review the efficient functioning of this Directive and to monitor progress on the establishment of a single payment market, the Commission should be required to produce a report three years after the end of the transposition period of this Directive. With regard to the global integration of financial services and harmonised consumer protection also beyond the efficient functioning of this Directive focal points of the review should be the possible need to expand the scope of application with regard to non-EU currencies and to payment transactions where only one payment service provider concerned is located in the Community.
(55)
Since the provisions of this Directive replace those of Directive 97/5/EC, that Directive should be repealed.
(56)
It is necessary to lay down more detailed rules concerning the fraudulent use of payment cards, an area currently covered by Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts (21) and Directive 2002/65/EC. Those Directives should therefore be amended accordingly.
(57)
Since, pursuant to Directive 2006/48/EC, financial institutions are not subject to the rules applicable to credit institutions, they should be made subject to the same requirements as payment institutions so that they are able to provide payment services throughout the Community. Directive 2006/48/EC should therefore be amended accordingly.
(58)
Since money remittance is defined in this Directive as a payment service which requires an authorisation for a payment institution or a registration for some natural or legal persons benefiting from a waiver clause under certain circumstances specified in the provisions of this Directive, Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (22) should be amended accordingly.
(59)
In the interests of legal certainty, it is appropriate to make transitional arrangements in accordance with which persons who have commenced the activities of payment institutions in accordance with the national law in force before the entry into force of this Directive may continue those activities within the Member State concerned for a specified period.
(60)
Since the objective of this Directive, namely, the establishment of a single market in payment services, cannot be sufficiently achieved by the Member States because it requires the harmonisation of a multitude of different rules currently existing in the legal systems of the various Member States and can therefore 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 Directive does not go beyond what is necessary in order to achieve that objective.
(61)
The measures necessary for the implementation of this Directive should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (23).
(62)
In particular, the Commission should be empowered to adopt implementing provisions in order to take account of technological and market developments. Since those measures are of general scope and are designed to amend non-essential elements of this Directive, they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC.
(63)
In accordance with point 34 of the Interinstitutional Agreement on better law-making (24), Member States are encouraged to draw up, for themselves and in the interest of the Community, their own tables illustrating, as far as possible, the correlation between this Directive and the transposition measures, and to make them public,
HAVE ADOPTED THIS DIRECTIVE:
TITLE I
SUBJECT MATTER, SCOPE AND DEFINITIONS
Article 1
Subject matter
1. This Directive lays down the rules in accordance with which Member States shall distinguish the following six categories of payment service provider:
(a)
credit institutions within the meaning of Article 4(1)(a) of Directive 2006/48/EC;
(b)
electronic money institutions within the meaning of Article 1(3)(a) of Directive 2000/46/EC;
(c)
post office giro institutions which are entitled under national law to provide payment services;
(d)
payment institutions within the meaning of this Directive;
(e)
the European Central Bank and national central banks when not acting in their capacity as monetary authority or other public authorities;
(f)
Member States or their regional or local authorities when not acting in their capacity as public authorities.
2. This Directive also lays down rules concerning transparency of conditions and information requirements for payment services, and the respective rights and obligations of payment service users and payment service providers in relation to the provision of payment services as a regular occupation or business activity.
Article 2
Scope
1. This Directive shall apply to payment services provided within the Community. However, with the exception of Article 73, Titles III and IV shall apply only where both the payer's payment service provider and the payee's payment service provider are, or the sole payment service provider in the payment transaction is, located in the Community.
2. Titles III and IV shall apply to payment services made in euro or the currency of a Member State outside the euro area.
3. Member States may waive the application of all or part of the provisions of this Directive to the institutions referred to in Article 2 of Directive 2006/48/EC, with the exception of those referred to in the first and second indent of that article.
Article 3
Negative scope
This Directive shall apply to none of the following:
(a)
payment transactions made exclusively in cash directly from the payer to the payee, without any intermediary intervention;
(b)
payment transactions from the payer to the payee through a commercial agent authorised to negotiate or conclude the sale or purchase of goods or services on behalf of the payer or the payee;
(c)
professional physical transport of banknotes and coins, including their collection, processing and delivery;
(d)
payment transactions consisting of the non-professional cash collection and delivery within the framework of a non-profit or charitable activity;
(e)
services where cash is provided by the payee to the payer as part of a payment transaction following an explicit request by the payment service user just before the execution of the payment transaction through a payment for the purchase of goods or services;
(f)
money exchange business, that is to say, cash-to-cash operations, where the funds are not held on a payment account;
(g)
payment transactions based on any of the following documents drawn on the payment service provider with a view to placing funds at the disposal of the payee:
(i)
paper cheques in accordance with the Geneva Convention of 19 March 1931 providing a uniform law for cheques;
(ii)
paper cheques similar to those referred to in point (i) and governed by the laws of Member States which are not party to the Geneva Convention of 19 March 1931 providing a uniform law for cheques;
(iii)
paper-based drafts in accordance with the Geneva Convention of 7 June 1930 providing a uniform law for bills of exchange and promissory notes;
(iv)
paper-based drafts similar to those referred to in point (iii) and governed by the laws of Member States which are not party to the Geneva Convention of 7 June 1930 providing a uniform law for bills of exchange and promissory notes;
(v)
paper-based vouchers;
(vi)
paper-based traveller's cheques; or
(vii)
paper-based postal money orders as defined by the Universal Postal Union;
(h)
payment transactions carried out within a payment or securities settlement system between settlement agents, central counterparties, clearing houses and/or central banks and other participants of the system, and payment service providers, without prejudice to Article 28;
(i)
payment transactions related to securities asset servicing, including dividends, income or other distributions, or redemption or sale, carried out by persons referred to in point (h) or by investment firms, credit institutions, collective investment undertakings or asset management companies providing investment services and any other entities allowed to have the custody of financial instruments;
(j)
services provided by technical service providers, which support the provision of payment services, without them entering at any time into possession of the funds to be transferred, including processing and storage of data, trust and privacy protection services, data and entity authentication, information technology (IT) and communication network provision, provision and maintenance of terminals and devices used for payment services;
(k)
services based on instruments that can be used to acquire goods or services only in the premises used by the issuer or under a commercial agreement with the issuer either within a limited network of service providers or for a limited range of goods or services;
(l)
payment transactions executed by means of any telecommunication, digital or IT device, where the goods or services purchased are delivered to and are to be used through a telecommunication, digital or IT device, provided that the telecommunication, digital or IT operator does not act only as an intermediary between the payment service user and the supplier of the goods and services;
(m)
payment transactions carried out between payment service providers, their agents or branches for their own account;
(n)
payment transactions between a parent undertaking and its subsidiary or between subsidiaries of the same parent undertaking, without any intermediary intervention by a payment service provider other than an undertaking belonging to the same group; or
(o)
services by providers to withdraw cash by means of automated teller machines acting on behalf of one or more card issuers, which are not a party to the framework contract with the customer withdrawing money from a payment account, on condition that these providers do not conduct other payment services as listed in the Annex.
Article 4
Definitions
For the purposes of this Directive, the following definitions shall apply:
1.
‘home Member State’ means either of the following:
(i)
the Member State in which the registered office of the payment service provider is situated; or
(ii)
if the payment service provider has, under its national law, no registered office, the Member State in which its head office is situated;
2.
‘host Member State’ means the Member State other than the home Member State in which a payment service provider has an agent or a branch or provides payment services;
3.
‘payment service’ means any business activity listed in the Annex;
4.
‘payment institution’ means a legal person that has been granted authorisation in accordance with Article 10 to provide and execute payment services throughout the Community;
5.
‘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;
6.
‘payment system’ means a funds transfer system with formal and standardised arrangements and common rules for the processing, clearing and/or settlement of payment transactions;
7.
‘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;
8.
‘payee’ means a natural or legal person who is the intended recipient of funds which have been the subject of a payment transaction;
9.
‘payment service provider’ means bodies referred to in Article 1(1) and legal and natural persons benefiting from the waiver under Article 26;
10.
‘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;
11.
‘consumer’ means a natural person who, in payment service contracts covered by this Directive, is acting for purposes other than his trade, business or profession;
12.
‘framework contract’ means a payment service contract which governs the future execution of individual and successive payment transactions and which may contain the obligation and conditions for setting up a payment account;
13.
‘money remittance’ means a payment service where funds are received from a payer, without any payment accounts being created in the name of the payer or the payee, for the sole purpose of transferring a corresponding amount to a payee or to another payment service provider acting on behalf of the payee, and/or where such funds are received on behalf of and made available to the payee;
14.
‘payment account’ means an account held in the name of one or more payment service users which is used for the execution of payment transactions;
15.
‘funds’ means banknotes and coins, scriptural money and electronic money as defined in Article 1(3)(b) of Directive 2000/46/EC;
16.
‘payment order’ means any instruction by a payer or payee to his payment service provider requesting the execution of a payment transaction;
17.
‘value date’ means a reference time used by a payment service provider for the calculation of interest on the funds debited from or credited to a payment account;
18.
‘reference exchange rate’ means the exchange rate which is used as the basis to calculate any currency exchange and which is made available by the payment service provider or comes from a publicly available source;
19.
‘authentication’ means a procedure which allows the payment service provider to verify the use of a specific payment instrument, including its personalised security features;
20.
‘reference interest rate’ means the interest rate which is used as the basis for calculating any interest to be applied and which comes from a publicly available source which can be verified by both parties to a payment service contract;
21.
‘unique identifier’ means a combination of letters, numbers or symbols specified to the payment service user by the payment service provider and to be provided by the payment service user to identify unambiguously the other payment service user and/or his payment account for a payment transaction;
22.
‘agent’ means a natural or legal person which acts on behalf of a payment institution in providing payment services;
23.
‘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 order;
24.
‘means of distance communication’ refers to any means which, without the simultaneous physical presence of the payment service provider and the payment service user, may be used for the conclusion of a payment services contract;
25.
‘durable medium’ means any instrument which enables the payment service user to store information addressed personally to him in a way accessible for future reference for a period of time adequate to the purposes of the information and which allows the unchanged reproduction of the information stored;
26.
‘micro-enterprise’ means an enterprise, which at the time of conclusion of the payment service contract, is an enterprise as defined in Article 1 and Article 2(1) and (3) of the Annex to Recommendation 2003/361/EC;
27.
‘business day’ means a day on which the relevant payment service provider of the payer or the payment service provider of the payee involved in the execution of a payment transaction is open for business as required for the execution of a payment transaction;
28.
‘direct debit’ means a payment service for debiting a payer's payment account, where a payment transaction is initiated by the payee on the basis of the payer's consent given to the payee, to the payee's payment service provider or to the payer's own payment service provider;
29.
‘branch’ means a place of business other than the head office which is a part of a payment institution, which has no legal personality and which carries out directly some or all of the transactions inherent in the business of a payment institution; all the places of business set up in the same Member State by a payment institution with a head office in another Member State shall be regarded as a single branch;
30.
‘group’ means a group of undertakings, which consists of a parent undertaking, its subsidiaries and the entities in which the parent undertaking or its subsidiaries have a holding as well as undertakings linked to each other by a relationship referred to in Article 12(1) of Directive 83/349/EEC.
TITLE II
PAYMENT SERVICE PROVIDERS
CHAPTER 1
Payment institutions
Section 1
General rules
Article 5
Applications for authorisation
For authorisation as a payment institution, an application shall be submitted to the competent authorities of the home Member State, together with the following:
(a)
a programme of operations, setting out in particular the type of payment services envisaged;
(b)
a business plan including a forecast budget calculation for the first three financial years which demonstrates that the applicant is able to employ the appropriate and proportionate systems, resources and procedures to operate soundly;
(c)
evidence that the payment institution holds initial capital provided for in Article 6;
(d)
for the payment institutions referred to in Article 9(1), a description of the measures taken for safeguarding payment service users' funds in accordance with Article 9;
(e)
a description of the applicant's governance arrangements and internal control mechanisms, including administrative, risk management and accounting procedures, which demonstrates that these governance arrangements, control mechanisms and procedures are proportionate, appropriate, sound and adequate;
(f)
a description of the internal control mechanisms which the applicant has established in order to comply with obligations in relation to money laundering and terrorist financing under Directive 2005/60/EC and Regulation (EC) No 1781/2006 of the European Parliament and of the Council of 15 November 2006 on information on the payer accompanying transfers of funds (25);
(g)
a description of the applicant's structural organisation, including, where applicable, a description of the intended use of agents and branches and a description of outsourcing arrangements, and of its participation in a national or international payment system;
(h)
the identity of persons holding in the applicant, directly or indirectly, qualifying holdings within the meaning of Article 4(11) of Directive 2006/48/EC, the size of their holdings and evidence of their suitability taking into account the need to ensure the sound and prudent management of a payment institution;
(i)
the identity of directors and persons responsible for the management of the payment institution and, where relevant, persons responsible for the management of the payment services activities of the payment institution, as well as evidence that they are of good repute and possess appropriate knowledge and experience to perform payment services as determined by the home Member State of the payment institution;
(j)
where applicable, the identity of statutory auditors and audit firms as defined in Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts (26);
(k)
the applicant's legal status and articles of association;
(l)
the address of the applicant's head office.
For the purposes of points (d), (e) and (g), the applicant shall provide a description of its audit arrangements and the organisational arrangements it has set up with a view to taking all reasonable steps to protect the interests of its users and to ensure continuity and reliability in the performance of payment services.
Article 6
Initial capital
Member States shall require payment institutions to hold, at the time of authorisation, initial capital, comprised of the items defined in Article 57(a) and (b) of Directive 2006/48/EC as follows:
(a)
where the payment institution provides only the payment service listed in point 6 of the Annex, its capital shall at no time be less than EUR 20 000;
(b)
where the payment institution provides the payment service listed in point 7 of the Annex, its capital shall at no time be less than EUR 50 000; and
(c)
where the payment institution provides any of the payment services listed in points 1 to 5 of the Annex, its capital shall at no time be less than EUR 125 000.
Article 7
Own funds
1. The payment institution's own funds, as defined in Articles 57 to 61, 63, 64 and 66 of Directive 2006/48/EC, may not fall below the amount required under Articles 6 or 8 of this Directive, whichever the higher.
2. Member States shall take the necessary measures to prevent the multiple use of elements eligible for own funds where the payment institution belongs to the same group as another payment institution, credit institution, investment firm, asset management company or insurance undertaking. This paragraph shall also apply where a payment institution has a hybrid character and carries out activities other than providing payment services listed in the Annex.
3. If the conditions laid down in Article 69 of Directive 2006/48/EC are met, Member States or their competent authorities may choose not to apply Article 8 of this Directive to payment institutions which are included in the consolidated supervision of the parent credit institution pursuant to Directive 2006/48/EC.
Article 8
Calculation of own funds
1. Notwithstanding the initial capital requirements set out in Article 6, Member States shall require payment institutions to hold, at all times, own funds calculated in accordance with one of the following three methods, as determined by the competent authorities in accordance with national legislation:
Method A
The payment institution's own funds shall amount to at least 10 % of its fixed overheads of the preceding year. The competent authorities may adjust that requirement in the event of a material change in a payment institution's business since the preceding year. Where a payment institution has not completed a full year's business at the date of the calculation, the requirement shall be that its own funds amount to at least 10 % of the corresponding fixed overheads as projected in its business plan, unless an adjustment to that plan is required by the competent authorities.
Method B
The payment institution's own funds shall amount to at least the sum of the following elements multiplied by the scaling factor k defined in paragraph 2, where payment volume (PV) represents one twelfth of the total amount of payment transactions executed by the payment institution in the preceding year:
(a)
4,0 % of the slice of PV up to EUR 5 million,
plus
(b)
2,5 % of the slice of PV above EUR 5 million up to EUR 10 million,
plus
(c)
1 % of the slice of PV above EUR 10 million up to EUR 100 million,
plus
(d)
0,5 % of the slice of PV above EUR 100 million up to EUR 250 million,
plus
(e)
0,25 % of the slice of PV above EUR 250 million.
Method C
The payment institution's own funds shall amount to at least the relevant indicator defined in point (a), multiplied by the multiplication factor defined in point (b) and by the scaling factor k defined in paragraph 2.
(a)
The relevant indicator is the sum of the following:
—
interest income,
—
interest expenses,
—
commissions and fees received, and
—
other operating income.
Each element shall be included in the sum with its positive or negative sign. Income from extraordinary or irregular items may not be used in the calculation of the relevant indicator. Expenditure on the outsourcing of services rendered by third parties may reduce the relevant indicator if the expenditure is incurred from an undertaking subject to supervision under this Directive. The relevant indicator is calculated on the basis of the twelve-monthly observation at the end of the previous financial year. The relevant indicator shall be calculated over the previous financial year. Nevertheless own funds calculated according to Method C shall not fall below 80 % of the average of the previous three financial years for the relevant indicator. When audited figures are not available, business estimates may be used.
(b)
The multiplication factor shall be:
(i)
10 % of the slice of the relevant indicator up to EUR 2,5 million;
(ii)
8 % of the slice of the relevant indicator from EUR 2,5 million up to EUR 5 million;
(iii)
6 % of the slice of the relevant indicator from EUR 5 million up to EUR 25 million;
(iv)
3 % of the slice of the relevant indicator from EUR 25 million up to 50 million;
(v)
1,5 % above EUR 50 million.
2. The scaling factor k to be used in Methods B and C shall be:
(a)
0,5 where the payment institution provides only the payment service listed in point 6 of the Annex;
(b)
0,8 where the payment institution provides the payment service listed in point 7 of the Annex;
(c)
1 where the payment institution provides any of the payment services listed in points 1 to 5 of the Annex.
3. The competent authorities may, based on an evaluation of the risk-management processes, risk loss data base and internal control mechanisms of the payment institution, require the payment institution to hold an amount of own funds which is up to 20 % higher than the amount which would result from the application of the method chosen in accordance with paragraph 1, or permit the payment institution to hold an amount of own funds which is up to 20 % lower than the amount which would result from the application of the method chosen in accordance with paragraph 1.
Article 9
Safeguarding requirements
1. The Member States or competent authorities shall require a payment institution which provides any of the payment services listed in the Annex and, at the same time, is engaged in other business activities referred to in Article 16(1)(c) to safeguard funds which have been received from the payment service users or through another payment service provider for the execution of payment transactions, as follows:
either:
(a)
they shall not be commingled at any time with the funds of any natural or legal person other than payment service users on whose behalf the funds are held and, where they are still held by the payment institution and not yet delivered to the payee or transferred to another payment service provider by the end of the business day following the day when the funds have been received, they shall be deposited in a separate account in a credit institution or invested in secure, liquid low-risk assets as defined by the competent authorities of the home Member State; and
(b)
they shall be insulated in accordance with national law in the interest of the payment service users against the claims of other creditors of the payment institution, in particular in the event of insolvency;
or
(c)
they shall be covered by an insurance policy or some other comparable guarantee from an insurance company or a credit institution, which does not belong to the same group as the payment institution itself, for an amount equivalent to that which would have been segregated in the absence of the insurance policy or other comparable guarantee, payable in the event that the payment institution is unable to meet its financial obligations.
2. Where a payment institution is required to safeguard funds under paragraph 1 and a portion of those funds is to be used for future payment transactions with the remaining amount to be used for non-payment services, that portion of the funds to be used for future payment transactions shall also be subject to the requirements under paragraph 1. Where that portion is variable or unknown in advance, Member States may allow payment institutions to apply this paragraph on the basis of a representative portion assumed to be used for payment services provided such a representative portion can be reasonably estimated on the basis of historical data to the satisfaction of the competent authorities.
3. The Member States or competent authorities may require that payment institutions which are not engaged in other business activities referred to in Article 16(1)(c) shall also comply with the safeguarding requirements under paragraph 1 of this Article.
4. The Member States or competent authorities may also limit such safeguarding requirements to funds of those payment service users whose funds individually exceed a threshold of EUR 600.
Article 10
Granting of authorisation
1. Member States shall require undertakings other than those referred to in Article 1(1)(a) to (c), (e) and (f) and other than legal or natural persons benefiting from a waiver under Article 26, who intend to provide payment services, to obtain authorisation as a payment institution before commencing the provision of payment services. An authorisation shall only be granted to a legal person established in a Member State.
2. An authorisation shall be granted if the information and evidence accompanying the application complies with all the requirements under Article 5 and if the competent authorities' overall assessment, having scrutinised the application, is favourable. Before an authorisation is granted, the competent authorities may, where relevant, consult the national central bank or other relevant public authorities.
3. A payment institution which under the national law of its home Member State is required to have a registered office, shall have its head office in the same Member State as its registered office.
4. The competent authorities shall grant an authorisation only if, taking into account the need to ensure the sound and prudent management of a payment institution, the payment institution has robust governance arrangements for its payment services business, which include a clear organisational structure with well-defined, transparent and consistent lines of responsibility, effective procedures to identify, manage, monitor and report the risks to which it is or might be exposed, and adequate internal control mechanisms, including sound administrative and accounting procedures; those arrangements, procedures and mechanisms shall be comprehensive and proportionate to the nature, scale and complexity of the payment services provided by the payment institution.
5. Where a payment institution provides any of the payment services listed in the Annex and, at the same time, is engaged in other business activities, the competent authorities may require the establishment of a separate entity for the payment services business, where the non-payment services activities of the payment institution impair or are likely to impair either the financial soundness of the payment institution or the ability of the competent authorities to monitor the payment institution's compliance with all obligations laid down by this Directive.
6. The competent authorities shall refuse to grant an authorisation if, taking into account the need to ensure the sound and prudent management of a payment institution, they are not satisfied as to the suitability of the shareholders or members that have qualifying holdings.
7. Where close links as defined in Article 4(46) of Directive 2006/48/EC exist between the payment institution and other natural or legal persons, the competent authorities shall grant an authorisation only if those links do not prevent the effective exercise of their supervisory functions.
8. The competent authorities shall grant an authorisation only if the laws, regulations or administrative provisions of a third country governing one or more natural or legal persons with which the payment institution has close links, or difficulties involved in the enforcement of those laws, regulations or administrative provisions, do not prevent the effective exercise of their supervisory functions.
9. An authorisation shall be valid in all Member States and shall allow the payment institution concerned to provide payment services throughout the Community, either under the freedom to provide services or the freedom of establishment, provided that such services are covered by the authorisation.
Article 11
Communication of the decision
Within three months of receipt of an application or, should the application be incomplete, of all the information required for the decision, the competent authorities shall inform the applicant whether the authorisation has been granted or refused. Reasons shall be given whenever an authorisation is refused.
Article 12
Withdrawal of authorisation
1. The competent authorities may withdraw an authorisation issued to a payment institution only where the institution:
(a)
does not make use of the authorisation within 12 months, expressly renounces the authorisation or has ceased to engage in business for more than six months, if the Member State concerned has made no provision for the authorisation to lapse in such cases;
(b)
has obtained the authorisation through false statements or any other irregular means;
(c)
no longer fulfils the conditions for granting the authorisation;
(d)
would constitute a threat to the stability of the payment system by continuing its payment services business; or
(e)
falls within one of the other cases where national law provides for withdrawal of an authorisation.
2. Reasons shall be given for any withdrawal of an authorisation and those concerned shall be informed accordingly.
3. The withdrawal of an authorisation shall be made public.
Article 13
Registration
Member States shall establish a public register of authorised payment institutions, their agents and branches, as well as of natural and legal persons, their agents and branches, benefiting from a waiver under Article 26, and of the institutions referred to in Article 2(3) that are entitled under national law to provide payment services. They shall be entered in the register of the home Member State.
This register shall identify the payment services for which the payment institution is authorised or for which the natural or legal person has been registered. Authorised payment institutions shall be listed in the register separately from natural and legal persons that have been registered in accordance with Article 26. The register shall be publicly available for consultation, accessible online, and updated on a regular basis.
Article 14
Maintenance of authorisation
Where any change affects the accuracy of information and evidence provided in accordance with Article 5, the payment institution shall without undue delay inform the competent authorities of its home Member State accordingly.
Article 15
Accounting and statutory audit
1. Directive 78/660/EEC and, where applicable, Directives 83/349/EEC and 86/635/EEC and Regulation (EC) 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards (27) shall apply to payment institutions mutatis mutandis.
2. Unless exempted under Directive 78/660/EEC and, where applicable, Directives 83/349/EEC and 86/635/EEC, the annual accounts and consolidated accounts of payment institutions shall be audited by statutory auditors or audit firms within the meaning of Directive 2006/43/EC.
3. For supervisory purposes, Member States shall require that payment institutions provide separate accounting information for payment services listed in the Annex and activities referred to in Article 16(1), which shall be subject to an auditor's report. That report shall be prepared, where applicable, by the statutory auditors or an audit firm.
4. The obligations established in Article 53 of Directive 2006/48/EC shall apply mutatis mutandis to the statutory auditors or audit firms of payment institutions in respect of payment services activities.
Article 16
Activities
1. Apart from the provision of payment services listed in the Annex payment institutions shall be entitled to engage in the following activities:
(a)
the provision of operational and closely related ancillary services such as ensuring the execution of payment transactions, foreign exchange services, safekeeping activities, and the storage and processing of data;
(b)
the operation of payment systems, without prejudice to Article 28;
(c)
business activities other than the provision of payment services, having regard to applicable Community and national law.
2. When payment institutions engage in the provision of one or more of the payment services listed in the Annex, they may hold only payment accounts used exclusively for payment transactions. Any funds received by payment institutions from payment service users with a view to the provision of payment services shall not constitute a deposit or other repayable funds within the meaning of Article 5 of Directive 2006/48/EC, or electronic money within the meaning of Article 1(3) of Directive 2000/46/EC.
3. Payment institutions may grant credit related to payment services referred to in points 4, 5 or 7 of the Annex only if the following conditions are met:
(a)
the credit shall be ancillary and granted exclusively in connection with the execution of a payment transaction;
(b)
notwithstanding national rules on providing credit by credit cards, the credit granted in connection with a payment and executed in accordance with Article 10(9) and Article 25 shall be repaid within a short period which shall in no case exceed twelve months;
(c)
such credit shall not be granted from the funds received or held for the purpose of executing a payment transaction; and
(d)
the own funds of the payment institution shall at all times and to the satisfaction of the supervisory authorities be appropriate in view of the overall amount of credit granted.
4. Payment institutions shall not conduct the business of taking deposits or other repayable funds within the meaning of Article 5 of Directive 2006/48/EC.
5. This Directive shall be without prejudice to national measures implementing Directive 87/102/EEC. This Directive shall also be without prejudice to other relevant Community or national legislation regarding conditions for granting credit to consumers not harmonised by this Directive that are in conformity with Community law.
Section 2
Other requirements
Article 17
Use of agents, branches or entities to which activities are outsourced
1. When a payment institution intends to provide payment services through an agent it shall communicate the following information to the competent authorities in its home Member State:
(a)
the name and address of the agent;
(b)
a description of the internal control mechanisms that will be used by agents in order to comply with the obligations in relation to money laundering and terrorist financing under Directive 2005/60/EC; and
(c)
the identity of directors and persons responsible for the management of the agent to be used in the provision of payment services and evidence that they are fit and proper persons.
2. When the competent authorities receive the information in accordance with paragraph 1 then they may list the agent in the register provided for in Article 13.
3. Before listing the agent in the register, the competent authorities may, if they consider that the information provided to them is incorrect, take further action to verify the information.
4. If, after taking action to verify the information, the competent authorities are not satisfied that the information provided to them pursuant to paragraph 1 is correct, they shall refuse to list the agent in the register provided for in Article 13.
5. If the payment institution wishes to provide payment services in another Member State by engaging an agent it shall follow the procedures set out in Article 25. In that case, before the agent may be registered under this Article, the competent authorities of the home Member State shall inform the competent authorities of the host Member State of their intention to register the agent and take their opinion into account.
6. If the competent authorities of the host Member State have reasonable grounds to suspect that, in connection with the intended engagement of the agent or establishment of the branch, money laundering or terrorist financing within the meaning of Directive 2005/60/EC is taking place, has taken place or been attempted, or that the engagement of such agent or establishment of such branch could increase the risk of money laundering or terrorist financing, they shall so inform the competent authorities of the home Member State, which may refuse to register the agent or branch, or may withdraw the registration, if already made, of the agent or branch.
7. Where a payment institution intends to outsource operational functions of payment services, it shall inform the competent authorities of its home Member State accordingly.
Outsourcing of important operational functions may not be undertaken in such way as to impair materially the quality of the payment institution's internal control and the ability of the competent authorities to monitor the payment institution's compliance with all obligations laid down in this Directive.
For the purposes of the second subparagraph, an operational function shall be regarded as important if a defect or failure in its performance would materially impair the continuing compliance of a payment institution with the requirements of its authorisation requested under this Title or its other obligations under this Directive, or its financial performance, or the soundness or the continuity of its payment services. Member States shall ensure that when payment institutions outsource important operational functions, the payment institutions comply with the following conditions:
(a)
the outsourcing shall not result in the delegation by senior management of its responsibility;
(b)
the relationship and obligations of the payment institution towards its payment service users under this Directive shall not be altered;
(c)
the conditions with which the payment institution is to comply in order to be authorised and remain so in accordance with this Title shall not be undermined; and
(d)
none of the other conditions subject to which the payment institution's authorisation was granted shall be removed or modified.
8. Payment institutions shall ensure that agents or branches acting on their behalf inform payment service users of this fact.
Article 18
Liability
1. Member States shall ensure that, where payment institutions rely on third parties for the performance of operational functions, those payment institutions take reasonable steps to ensure that the requirements of this Directive are complied with.
2. Member States shall require that payment institutions remain fully liable for any acts of their employees, or any agent, branch or entity to which activities are outsourced.
Article 19
Record-keeping
Member States shall require payment institutions to keep all appropriate records for the purpose of this Title for at least five years, without prejudice to Directive 2005/60/EC or other relevant Community or national legislation.
Section 3
Competent authorities and supervision
Article 20
Designation of competent authorities
1. Member States shall designate as the competent authorities responsible for the authorisation and prudential supervision of payment institutions which are to carry out the duties provided for under this Title either public authorities, or bodies recognised by national law or by public authorities expressly empowered for that purpose by national law, including national central banks.
The competent authorities shall guarantee independence from economic bodies and avoid conflicts of interest. Without prejudice to the first subparagraph, payment institutions, credit institutions, electronic money institutions, or post office giro institutions shall not be designated as competent authorities.
The Member States shall inform the Commission accordingly.
2. Member States shall ensure that the competent authorities designated under paragraph 1 possess all the powers necessary for the performance of their duties.
3. Where there is more than one competent authority for matters covered by this Title on its territory, Member States shall ensure that those authorities cooperate closely so that they can discharge their respective duties effectively. The same applies in cases where the authorities competent for matters covered by this Title are not the competent authorities responsible for the supervision of credit institutions.
4. The tasks of the competent authorities designated under paragraph 1 shall be the responsibility of the competent authorities of the home Member State.
5. Paragraph 1 shall not imply that the competent authorities are required to supervise business activities of the payment institutions other than the provision of payment services listed in the Annex and the activities listed in Article 16(1)(a).
Article 21
Supervision
1. Member States shall ensure that the controls exercised by the competent authorities for checking continued compliance with this Title are proportionate, adequate and responsive to the risks to which payment institutions are exposed.
In order to check compliance with this Title, the competent authorities shall be entitled to take the following steps, in particular:
(a)
to require the payment institution to provide any information needed to monitor compliance;
(b)
to carry out on-site inspections at the payment institution, at any agent or branch providing payment services under the responsibility of the payment institution, or at any entity to which activities are outsourced;
(c)
to issue recommendations, guidelines and, if applicable, binding administrative provisions; and
(d)
to suspend or withdraw authorisation in cases referred to in Article 12.
2. Without prejudice to the procedures for the withdrawal of authorisations and the provisions of criminal law, the Member States shall provide that their respective competent authorities, may, as against payment institutions or those who effectively control the business of payment institutions which breach laws, regulations or administrative provisions concerning the supervision or pursuit of their payment service business, adopt or impose in respect of them penalties or measures aimed specifically at ending observed breaches or the causes of such breaches.
3. Notwithstanding the requirements of Article 6, Article 7(1) and (2) and Article 8, Member States shall ensure that the competent authorities are entitled to take steps described under paragraph 1 of this Article to ensure sufficient capital for payment services, in particular where the non-payment services activities of the payment institution impair or are likely to impair the financial soundness of the payment institution.
Article 22
Professional secrecy
1. Member States shall ensure that all persons working or who have worked for the competent authorities, as well as experts acting on behalf of the competent authorities, are bound by the obligation of professional secrecy, without prejudice to cases covered by criminal law.
2. In the exchange of information in accordance with Article 24, professional secrecy shall be strictly applied to ensure the protection of individual and business rights.
3. Member States may apply this Article taking into account, mutatis mutandis, Articles 44 to 52 of Directive 2006/48/EC.
Article 23
Right to apply to the courts
1. Member States shall ensure that decisions taken by the competent authorities in respect of a payment institution pursuant to the laws, regulations and administrative provisions adopted in accordance with this Directive may be contested before the courts.
2. Paragraph 1 shall apply also in respect of failure to act.
Article 24
Exchange of information
1. The competent authorities of the different Member States shall cooperate with each other and, where appropriate, with the European Central Bank and the national central banks of the Member States and other relevant competent authorities designated under Community or national legislation applicable to payment service providers.
2. Member States shall, in addition, allow the exchange of information between their competent authorities and the following:
(a)
the competent authorities of other Member States responsible for the authorisation and supervision of payment institutions;
(b)
the European Central Bank and the national central banks of Member States, in their capacity as monetary and oversight authorities, and, where appropriate, other public authorities responsible for overseeing payment and settlement systems;
(c)
other relevant authorities designated under this Directive, Directive 95/46/EC, Directive 2005/60/EC and other Community legislation applicable to payment service providers, such as legislation applicable to the protection of individuals with regard to the processing of personal data as well as money laundering and terrorist financing.
Article 25
Exercise of the right of establishment and freedom to provide services
1. Any authorised payment institution wishing to provide payment services for the first time in a Member State other than its home Member State, in exercise of the right of establishment or the freedom to provide services, shall so inform the competent authorities in its home Member State.
Within one month of receiving that information, the competent authorities of the home Member State shall inform the competent authorities of the host Member State of the name and address of the payment institution, the names of those responsible for the management of the branch, its organisational structure and of the kind of payment services it intends to provide in the territory of the host Member State.
2. In order to carry out the controls and take the necessary steps provided for in Article 21 in respect of the agent, branch or entity to which activities are outsourced of a payment institution located in the territory of another Member State, the competent authorities of the home Member State shall cooperate with the competent authorities of the host Member State.
3. By way of cooperation in accordance with paragraphs 1 and 2, the competent authorities of the home Member State shall notify the competent authorities of the host Member State whenever they intend to carry out an on-site inspection in the territory of the latter.
However, if they so wish, the competent authorities of the home Member State may delegate to the competent authorities of the host Member State the task of carrying out on-site inspections of the institution concerned.
4. The competent authorities shall provide each other with all essential and/or relevant information, in particular in the case of infringements or suspected infringements by an agent, a branch or an entity to which activities are outsourced. In this regard, the competent authorities shall communicate, upon request, all relevant information and, on their own initiative, all essential information.
5. Paragraphs 1 to 4 shall be without prejudice to the obligation of competent authorities under Directive 2005/60/EC and Regulation (EC) No 1781/2006, in particular under Article 37(1) of Directive 2005/60/EC and Article 15(3) of Regulation (EC) No 1781/2006 to supervise or monitor the compliance with the requirements laid down in those instruments.
Section 4
Waiver
Article 26
Conditions
1. Notwithstanding Article 13, Member States may waive or allow their competent authorities to waive the application of all or part of the procedure and conditions set out in Sections 1 to 3, with the exception of Articles 20, 22, 23 and 24, and allow natural or legal persons to be entered in the register provided for in Article 13, where:
(a)
the average of the preceding 12 months' total amount of payment transactions executed by the person concerned, including any agent for which it assumes full responsibility, does not exceed EUR 3 million per month. That requirement shall be assessed on the projected total amount of payment transactions in its business plan, unless an adjustment to that plan is required by the competent authorities; and
(b)
none of the natural persons responsible for the management or operation of the business has been convicted of offences relating to money laundering or terrorist financing or other financial crimes.
2. Any natural or legal person registered in accordance with paragraph 1 shall be required to have its head office or place of residence in the Member State in which it actually carries on its business.
3. The persons referred to in paragraph 1 shall be treated as payment institutions, save that Article 10(9) and Article 25 shall not apply to them.
4. Member States may also provide that any natural or legal person registered in accordance with paragraph 1 may engage only in certain activities listed in Article 16.
5. The persons referred to in paragraph 1 shall notify the competent authorities of any change in their situation which is relevant to the conditions specified in that paragraph. Member States shall take the necessary steps to ensure that where the conditions set out in paragraphs 1, 2 and 4 are no longer fulfilled, the persons concerned shall seek authorisation within 30 calendar days in accordance with the procedure laid down in Article 10.
6. This Article shall not be applied in respect of provisions of Directive 2005/60/EC or national anti-money-laundering provisions.
Article 27
Notification and information
If a Member State avails itself of the waiver provided for in Article 26, it shall notify the Commission accordingly by 1 November 2009 and it shall notify the Commission forthwith of any subsequent change. In addition, the Member State shall inform the Commission of the number of natural and legal persons concerned and, on an annual basis, of the total amount of payment transactions executed as of 31 December of each calendar year, as referred to in Article 26(1)(a).
CHAPTER 2
Common provisions
Article 28
Access to payment systems
1. Member States shall ensure that the rules on access of authorised or registered payment service providers that are legal persons to payment systems shall be objective, non-discriminatory and proportionate and that those rules do not inhibit access more than is necessary to safeguard against specific risks such as settlement risk, operational risk and business risk and to protect the financial and operational stability of the payment system.
Payment systems shall impose on payment service providers, on payment service users or on other payment systems none of the following requirements:
(a)
any restrictive rule on effective participation in other payment systems;
(b)
any rule which discriminates between authorised payment service providers or between registered payment service providers in relation to the rights, obligations and entitlements of participants; or
(c)
any restriction on the basis of institutional status.
2. Paragraph 1 shall not apply to:
(a)
payment systems designated under Directive 98/26/EC;
(b)
payment systems composed exclusively of payment service providers belonging to a group composed of entities linked by capital where one of the linked entities enjoys effective control over the other linked entities; or
(c)
payment systems where a sole payment service provider (whether as a single entity or as a group):
—
acts or can act as the payment service provider for both the payer and the payee and is exclusively responsible for the management of the system, and
—
licenses other payment service providers to participate in the system and the latter have no right to negotiate fees between or amongst themselves in relation to the payment system although they may establish their own pricing in relation to payers and payees.
Article 29
Prohibition for persons other than payment service providers to provide payment services
Member States shall prohibit natural or legal persons that are neither payment service providers nor explicitly excluded from the scope of this Directive from providing the payment services listed in the Annex.
TITLE III
TRANSPARENCY OF CONDITIONS AND INFORMATION REQUIREMENTS FOR PAYMENT SERVICES
CHAPTER 1
General rules
Article 30
Scope
1. This Title shall apply to single payment transactions, framework contracts and payment transactions covered by them. The parties may agree that it shall not apply in whole or in part when the payment service user is not a consumer.
2. Member States may provide that the provisions in this Title shall be applied to micro enterprises in the same way as to consumers.
3. This Directive shall be without prejudice to national measures implementing Directive 87/102/EEC. This Directive shall also be without prejudice to other relevant Community or national legislation regarding conditions for granting credit to consumers not harmonised by this Directive that are in conformity with Community law.
Article 31
Other provisions in Community legislation
The provisions of this Title are without prejudice to any Community legislation containing additional requirements on prior information.
However, where Directive 2002/65/EC is also applicable, the information requirements set out in Article 3(1) of that Directive, with the exception of points (2)(c) to (g), (3)(a), (d) and (e), and (4)(b) of that paragraph shall be replaced by Articles 36, 37, 41 and 42 of this Directive.
Article 32
Charges for information
1. The payment service provider shall not charge the payment service user for providing information under this Title.
2. The payment service provider and the payment service user may agree on charges for additional or more frequent information, or transmission by means of communication other than those specified in the framework contract, provided at the payment service user's request.
3. Where the payment service provider may impose charges for information in accordance with paragraph 2, they shall be appropriate and in line with the payment service provider's actual costs.
Article 33
Burden of proof on information requirements
Member States may stipulate that the burden of proof shall lie with the payment service provider to prove that it has complied with the information requirements set out in this Title.
Article 34
Derogation from information requirements for low-value payment instruments and electronic money
1. In cases of payment instruments which, according to the framework contract, concern only individual payment transactions that do not exceed EUR 30 or that either have a spending limit of EUR 150 or store funds that do not exceed EUR 150 at any time:
(a)
by way of derogation from Articles 41, 42 and 46, the payment service provider shall provide the payer only with information on the main characteristics of the payment service, including the way in which the payment instrument can be used, liability, charges levied and other material information needed to take an informed decision as well as an indication of where any other information and conditions specified in Article 42 are made available in an easily accessible manner;
(b)
it may be agreed that, by way of derogation from Article 44, the payment service provider shall not be required to propose changes in the conditions of the framework contract in the same way as provided for in Article 41(1);
(c)
it may be agreed that, by way of derogation from Articles 47 and 48, after the execution of a payment transaction:
(i)
the payment service provider shall provide or make available only a reference enabling the payment service user to identify the payment transaction, the amount of the payment transaction, any charges and/or, in the case of several payment transactions of the same kind made to the same payee, information on the total amount and charges for those payment transactions;
(ii)
the payment service provider shall not be required to provide or make available information referred to in point (i) if the payment instrument is used anonymously or if the payment service provider is not otherwise technically in a position to provide it. However, the payment service provider shall provide the payer with a possibility to verify the amount of funds stored.
2. For national payment transactions, Member States or their competent authorities may reduce or double the amounts referred to in paragraph 1. For prepaid payment instruments, Member States may increase those amounts up to EUR 500.
CHAPTER 2
Single payment transactions
Article 35
Scope
1. This Chapter shall apply to single payment transactions not covered by a framework contract.
2. When a payment order for a single payment transaction is transmitted by a payment instrument covered by a framework contract, the payment service provider shall not be obliged to provide or make available information which is already given to the payment service user on the basis of a framework contract with another payment service provider or which will be given to him according to that framework contract.
Article 36
Prior general information
1. Member States shall require that before the payment service user is bound by any single payment service contract or offer, the payment service provider, in an easily accessible manner, makes available to the payment service user the information and conditions specified in Article 37. At the payment service user's request, the payment service provider shall provide the information and conditions on paper or on another durable medium. The information and conditions shall be given in easily understandable words and in a clear and comprehensible form, in an official language of the Member State where the payment service is offered or in any other language agreed between the parties.
2. If the single payment service contract has been concluded at the request of the payment service user using a means of distance communication which does not enable the payment service provider to comply with paragraph 1, the payment service provider shall fulfil its obligations under that paragraph immediately after the execution of the payment transaction.
3. The obligations under paragraph 1 may also be discharged by supplying a copy of the draft single payment service contract or the draft payment order including the information and conditions specified in Article 37.
Article 37
Information and conditions
1. Member States shall ensure that the following information and conditions are provided or made available to the payment service user:
(a)
a specification of the information or unique identifier that has to be provided by the payment service user in order for a payment order to be properly executed;
(b)
the maximum execution time for the payment service to be provided;
(c)
all charges payable by the payment service user to his payment service provider and, where applicable, the breakdown of the amounts of any charges;
(d)
where applicable, the actual or reference exchange rate to be applied to the payment transaction.
2. Where applicable, any other relevant information and conditions specified in Article 42 shall be made available to the payment service user in an easily accessible manner.
Article 38
Information for the payer after receipt of the payment order
Immediately after receipt of the payment order, the payer's payment service provider shall provide or make available to the payer, in the same way as provided for in Article 36(1), the following information:
(a)
a reference enabling the payer to identify the payment transaction and, where appropriate, information relating to the payee;
(b)
the amount of the payment transaction in the currency used in the payment order;
(c)
the amount of any charges for the payment transaction payable by the payer and, where applicable, a breakdown of the amounts of such charges;
(d)
where applicable, the exchange rate used in the payment transaction by the payer's payment service provider or a reference thereto, when different from the rate provided in accordance with Article 37(1)(d), and the amount of the payment transaction after that currency conversion; and
(e)
the date of receipt of the payment order.
Article 39
Information for the payee after execution
Immediately after the execution of the payment transaction, the payee's payment service provider shall provide or make available to the payee, in the same way as provided for in Article 36(1), the following information:
(a)
the reference enabling the payee to identify the payment transaction and, where appropriate, the payer and any information transferred with the payment transaction;
(b)
the amount of the payment transaction in the currency in which the funds are at the payee's disposal;
(c)
the amount of any charges for the payment transaction payable by the payee and, where applicable, a breakdown of the amount of such charges;
(d)
where applicable, the exchange rate used in the payment transaction by the payee's payment service provider, and the amount of the payment transaction before that currency conversion; and
(e)
the credit value date.
CHAPTER 3
Framework contracts
Article 40
Scope
This Chapter applies to payment transactions covered by a framework contract.
Article 41
Prior general information
1. Member States shall require that, in good time before the payment service user is bound by any framework contract or offer, the payment service provider provide the payment service user on paper or on another durable medium with the information and conditions specified in Article 42. The information and conditions shall be given in easily understandable words and in a clear and comprehensible form, in an official language of the Member State where the payment service is offered or in any other language agreed between the parties.
2. If the framework contract has been concluded at the request of the payment service user using a means of distance communication which does not enable the payment service provider to comply with paragraph 1, the payment service provider shall fulfil its obligations under that paragraph immediately after the conclusion of the framework contract.
3. The obligations under paragraph 1 may also be discharged by supplying a copy of the draft framework contract including the information and conditions specified in Article 42.
Article 42
Information and conditions
Member States shall ensure that the following information and conditions are provided to the payment service user:
1.
on the payment service provider:
(a)
the name of the payment service provider, the geographical address of its head office and, where applicable, the geographical address of its agent or branch established in the Member State where the payment service is offered, and any other address, including electronic mail address, relevant for communication with the payment service provider; and
(b)
the particulars of the relevant supervisory authorities and of the register provided for in Article 13 or of any other relevant public register of authorisation of the payment service provider and the registration number, or equivalent means of identification in that register;
2.
on use of the payment service:
(a)
a description of the main characteristics of the payment service to be provided;
(b)
a specification of the information or unique identifier that has to be provided by the payment service user in order for a payment order to be properly executed;
(c)
the form of and procedure for giving consent to execute a payment transaction and withdrawal of such consent in accordance with Articles 54 and 66;
(d)
a reference to the point in time of receipt of a payment order as defined in Article 64 and the cut-off time, if any, established by the payment service provider;
(e)
the maximum execution time for the payment services to be provided; and
(f)
whether there is a possibility to agree on spending limits for the use of the payment instrument in accordance with Article 55(1);
3.
on charges, interest and exchange rates:
(a)
all charges payable by the payment service user to the payment service provider and, where applicable, the breakdown of the amounts of any charges;
(b)
where applicable, the interest and exchange rates to be applied or, if reference interest and exchange rates are to be used, the method of calculating the actual interest, and the relevant date and index or base for determining such reference interest or exchange rate; and
(c)
if agreed, the immediate application of changes in reference interest or exchange rate and information requirements related to the changes in accordance with Article 44(2);
4.
on communication:
(a)
where applicable, the means of communication, including the technical requirements for the payment service user's equipment, agreed between the parties for the transmission of information or notifications under this Directive;
(b)
the manner in and frequency with which information under this Directive is to be provided or made available;
(c)
the language or languages in which the framework contract will be concluded and communication during this contractual relationship undertaken; and
(d)
the payment service user's right to receive the contractual terms of the framework contract and information and conditions in accordance with Article 43;
5.
on safeguards and corrective measures:
(a)
where applicable, a description of steps that the payment service user is to take in order to keep safe a payment instrument and how to notify the payment service provider for the purposes of Article 56(1)(b);
(b)
if agreed, the conditions under which the payment service provider reserves the right to block a payment instrument in accordance with Article 55;
(c)
the liability of the payer in accordance with Article 61, including information on the relevant amount;
(d)
how and within what period of time the payment service user is to notify the payment service provider of any unauthorised or incorrectly executed payment transaction in accordance with Article 58 as well as the payment service provider's liability for unauthorised payment transactions in accordance with Article 60;
(e)
the liability of the payment service provider for the execution of payment transactions in accordance with Article 75; and
(f)
the conditions for refund in accordance with Articles 62 and 63;
6.
on changes in and termination of framework contract:
(a)
if agreed, information that the payment service user will be deemed to have accepted changes in the conditions in accordance with Article 44, unless he notifies the payment service provider that he does not accept them before the date of their proposed date of entry into force;
(b)
the duration of the contract; and
(c)
the right of the payment service user to terminate the framework contract and any agreements relating to termination in accordance with Article 44(1) and Article 45;
7.
on redress:
(a)
any contractual clause on the law applicable to the framework contract and/or the competent courts; and
(b)
the out-of-court complaint and redress procedures available to the payment service user in accordance with Articles 80 to 83.
Article 43
Accessibility of information and conditions of the framework contract
At any time during the contractual relationship the payment service user shall have a right to receive, on request, the contractual terms of the framework contract as well as the information and conditions specified in Article 42 on paper or on another durable medium.
Article 44
Changes in conditions of the framework contract
1. Any changes in the framework contract as well as the information and conditions specified in Article 42, shall be proposed by the payment service provider in the same way as provided for in Article 41(1) and no later than two months before their proposed date of application.
Where applicable in accordance with point (6)(a) of Article 42, the payment service provider shall inform the payment service user that he is to be deemed to have accepted these changes if he does not notify the payment service provider that he does not accept them before the proposed date of their entry into force. In this case, the payment service provider shall also specify that the payment service user has the right to terminate the framework contract immediately and without charge before the date of the proposed application of the changes.
2. Changes in the interest or exchange rates may be applied immediately and without notice, provided that such a right is agreed upon in the framework contract and that the changes are based on the reference interest or exchange rates agreed on in accordance with Article 42(3)(b) and (c). The payment service user shall be informed of any change in the interest rate at the earliest opportunity in the same way as provided for in Article 41(1), unless the parties have agreed on a specific frequency or manner in which the information is to be provided or made available. However, changes in interest or exchange rates which are more favourable to the payment service users, may be applied without notice.
3. Changes in the interest or exchange rate used in payment transactions shall be implemented and calculated in a neutral manner that does not discriminate against payment service users.
Article 45
Termination
1. The payment service user may terminate the framework contract at any time, unless the parties have agreed on a period of notice. Such a period may not exceed one month.
2. Termination of a framework contract concluded for a fixed period exceeding 12 months or for an indefinite period shall be free of charge for the payment service user after the expiry of 12 months. In all other cases charges for the termination shall be appropriate and in line with costs.
3. If agreed in the framework contract, the payment service provider may terminate a framework contract concluded for an indefinite period by giving at least two months' notice in the same way as provided for in Article 41(1).
4. Charges for payment services levied on a regular basis shall be payable by the payment service user only proportionally up to the termination of the contract. If such charges are paid in advance, they shall be reimbursed proportionally.
5. The provisions of this Article are without prejudice to the Member States' laws and regulations governing the rights of the parties to declare the framework contract unenforceable or void.
6. Member States may provide more favourable provisions for payment service users.
Article 46
Information before execution of individual payment transactions
In the case of an individual payment transaction under a framework contract initiated by the payer, a payment service provider shall, at the payer's request for this specific payment transaction, provide explicit information on the maximum execution time and the charges payable by the payer and, where applicable, a breakdown of the amounts of any charges.
Article 47
Information for the payer on individual payment transactions
1. After the amount of an individual payment transaction is debited from the payer's account or, where the payer does not use a payment account, after the receipt of the payment order, the payer's payment service provider shall provide the payer without undue delay in the same way as laid down in Article 41(1) with the following information:
(a)
a reference enabling the payer to identify each payment transaction and, where appropriate, information relating to the payee;
(b)
the amount of the payment transaction in the currency in which the payer's payment account is debited or in the currency used for the payment order;
(c)
the amount of any charges for the payment transaction and, where applicable, a breakdown thereof, or the interest payable by the payer;
(d)
where applicable, the exchange rate used in the payment transaction by the payer's payment service provider, and the amount of the payment transaction after that currency conversion; and
(e)
the debit value date or the date of receipt of the payment order.
2. A framework contract may include a condition that the information referred to in paragraph 1 is to be provided or made available periodically at least once a month and in an agreed manner which allows the payer to store and reproduce information unchanged.
3. However, Member States may require payment service providers to provide information on paper once a month free of charge.
Article 48
Information for the payee on individual payment transactions
1. After the execution of an individual payment transaction, the payee's payment service provider shall provide the payee without undue delay in the same way as laid down in Article 41(1) with the following information:
(a)
the reference enabling the payee to identify the payment transaction and, where appropriate, the payer, and any information transferred with the payment transaction;
(b)
the amount of the payment transaction in the currency in which the payee's payment account is credited;
(c)
the amount of any charges for the payment transaction and, where applicable, a breakdown thereof, or the interest payable by the payee;
(d)
where applicable, the exchange rate used in the payment transaction by the payee's payment service provider, and the amount of the payment transaction before that currency conversion; and
(e)
the credit value date.
2. A framework contract may include a condition that the information referred to in paragraph 1 is to be provided or made available periodically at least once a month and in an agreed manner which allows the payee to store and reproduce information unchanged.
3. However, Member States may require payment service providers to provide information on paper once a month free of charge.
CHAPTER 4
Common provisions
Article 49
Currency and currency conversion
1. Payments shall be made in the currency agreed between the parties.
2. Where a currency conversion service is offered prior to the initiation of the payment transaction and where that currency conversion service is offered at the point of sale or by the payee, the party offering the currency conversion service to the payer shall disclose to the payer all charges as well as the exchange rate to be used for converting the payment transaction.
The payer shall agree to the currency conversion service on that basis.
Article 50
Information on additional charges or reductions
1. Where, for the use of a given payment instrument, the payee requests a charge or offers a reduction, the payee shall inform the payer thereof prior to the initiation of the payment transaction.
2. Where, for the use of a given payment instrument, a payment service provider or a third party requests a charge, he shall inform the payment service user thereof prior to the initiation of the payment transaction.
TITLE IV
RIGHTS AND OBLIGATIONS IN RELATION TO THE PROVISION AND USE OF PAYMENT SERVICES
CHAPTER 1
Common provisions
Article 51
Scope
1. Where the payment service user is not a consumer, the parties may agree that Article 52(1), the second subparagraph of Article 54(2), and Articles 59, 61, 62, 63, 66 and 75 shall not apply in whole or in part. The parties may also agree on a time period different from that laid down in Article 58.
2. Member States may provide that Article 83 does not apply where the payment service user is not a consumer.
3. Member States may provide that provisions in this Title are applied to micro enterprises in the same way as to consumers.
4. This Directive shall be without prejudice to national measures implementing Directive 87/102/EEC. This Directive shall also be without prejudice to other relevant Community or national legislation regarding conditions for granting credit to consumers not harmonised by this Directive that are in conformity with Community law.
Article 52
Charges applicable
1. The payment service provider may not charge the payment service user for fulfilment of its information obligations or corrective and preventive measures under this Title, unless otherwise specified in Articles 65(1), 66(5) and 74(2). Those charges shall be agreed between the payment service user and the payment service provider and shall be appropriate and in line with the payment service provider's actual costs.
2. Where a payment transaction does not involve any currency conversion, Member States shall require that the payee pays the charges levied by his payment service provider, and the payer pays the charges levied by his payment service provider.
3. The payment service provider shall not prevent the payee from requesting from the payer a charge or from offering him a reduction for the use of a given payment instrument. However, Member States may forbid or limit the right to request charges taking into account the need to encourage competition and promote the use of efficient payment instruments.
Article 53
Derogation for low value payment instruments and electronic money
1. In the case of payment instruments which according to the framework contract, solely concern individual payment transactions not exceeding EUR 30 or which either have a spending limit of EUR 150 or store funds which do not exceed EUR 150 at any time payment service providers may agree with their payment service users that:
(a)
Article 56(1)(b) and Article 57(1)(c) and (d) as well as Article 61(4) and (5) do not apply if the payment instrument does not allow its blocking or prevention of its further use;
(b)
Articles 59, 60 and Article 61(1) and (2) do not apply if the payment instrument is used anonymously or the payment service provider is not in a position for other reasons which are intrinsic to the payment instrument to prove that a payment transaction was authorised;
(c)
by way of derogation from Article 65(1), the payment service provider is not required to notify the payment service user of the refusal of a payment order, if the non-execution is apparent from the context;
(d)
by way of derogation from Article 66, the payer may not revoke the payment order after transmitting the payment order or giving his consent to execute the payment transaction to the payee;
(e)
by way of derogation from Articles 69 and 70, other execution periods apply.
2. For national payment transactions, Member States or their competent authorities may reduce or double the amounts referred to in paragraph 1. They may increase them for prepaid payment instruments up to EUR 500.
3. Articles 60 and 61 shall apply also to electronic money within the meaning of Article 1(3)(b) of Directive 2000/46/EC, except where the payer's payment service provider does not have the ability to freeze the payment account or block the payment instrument. Member States may limit that derogation to payment accounts or payment instruments of a certain value.
CHAPTER 2
Authorisation of payment transactions
Article 54
Consent and withdrawal of consent
1. Member States shall ensure that a payment transaction is considered to be authorised only if the payer has given consent to execute the payment transaction. A payment transaction may be authorised by the payer prior to or, if agreed between the payer and his payment service provider, after the execution of the payment transaction.
2. Consent to execute a payment transaction or a series of payment transactions shall be given in the form agreed between the payer and his payment service provider.
In the absence of such consent, a payment transaction shall be considered to be unauthorised.
3. Consent may be withdrawn by the payer at any time, but no later than the point in time of irrevocability under Article 66. Consent to execute a series of payment transactions may also be withdrawn with the effect that any future payment transaction is to be considered as unauthorised.
4. The procedure for giving consent shall be agreed between the payer and the payment service provider.
Article 55
Limits of the use of the payment instrument
1. In cases where a specific payment instrument is used for the purposes of giving consent, the payer and his payment service provider may agree on spending limits for payment transactions executed through that payment instrument.
2. If agreed in the framework contract, the payment service provider may reserve the right to block the payment instrument for objectively justified reasons related to the security of the payment instrument, the suspicion of unauthorised or fraudulent use of the payment instrument or, in the case of a payment instrument with a credit line, a significantly increased risk that the payer may be unable to fulfil his liability to pay.
3. In such cases the payment service provider shall inform the payer of the blocking of the payment instrument and the reasons for it in an agreed manner, where possible, before the payment instrument is blocked and at the latest immediately thereafter, unless giving such information would compromise objectively justified security reasons or is prohibited by other relevant Community or national legislation.
4. The payment service provider shall unblock the payment instrument or replace it with a new payment instrument once the reasons for blocking no longer exist.
Article 56
Obligations of the payment service user in relation to payment instruments
1. The payment service user entitled to use a payment instrument shall have the following obligations:
(a)
to use the payment instrument in accordance with the terms governing the issue and use of the payment instrument; and
(b)
to notify the payment service provider, or the entity specified by the latter, without undue delay on becoming aware of loss, theft or misappropriation of the payment instrument or of its unauthorised use.
2. For the purposes of paragraph 1(a), the payment service user shall, in particular, as soon as he receives a payment instrument, take all reasonable steps to keep its personalised security features safe.
Article 57
Obligations of the payment service provider in relation to payment instruments
1. The payment service provider issuing a payment instrument shall have the following obligations:
(a)
to make sure that the personalised security features of the payment instrument are not accessible to parties other than the payment service user entitled to use the payment instrument, without prejudice to the obligations on the payment service user set out in Article 56;
(b)
to refrain from sending an unsolicited payment instrument, except where a payment instrument already given to the payment service user is to be replaced;
(c)
to ensure that appropriate means are available at all times to enable the payment service user to make a notification pursuant to Article 56(1)(b) or request unblocking pursuant to Article 55(4); on request, the payment service provider shall provide the payment service user with the means to prove, for 18 months after notification, that he made such notification; and
(d)
to prevent all use of the payment instrument once notification pursuant to Article 56(1)(b) has been made.
2. The payment service provider shall bear the risk of sending a payment instrument to the payer or of sending any personalised security features of it.
Article 58
Notification of unauthorised or incorrectly executed payment transactions
The payment service user shall obtain rectification from the payment service provider only if he notifies his payment service provider without undue delay on becoming aware of any unauthorised or incorrectly executed payment transactions giving rise to a claim, including that under Article 75, and no later than 13 months after the debit date, unless, where applicable, the payment service provider has failed to provide or make available the information on that payment transaction in accordance with Title III.
Article 59
Evidence on authentication and execution of payment transactions
1. Member States shall require that, where a payment service user denies having authorised an executed payment transaction or claims that the payment transaction was not correctly executed, it is for his payment service provider to prove that the payment transaction was authenticated, accurately recorded, entered in the accounts and not affected by a technical breakdown or some other deficiency.
2. Where a payment service user denies having authorised an executed payment transaction, the use of a payment instrument recorded by the payment service provider shall in itself not necessarily be sufficient to prove either that the payment transaction was authorised by the payer or that the payer acted fraudulently or failed with intent or gross negligence to fulfil one or more of his obligations under Article 56.
Article 60
Payment service provider's liability for unauthorised payment transactions
1. Member States shall ensure that, without prejudice to Article 58, in the case of an unauthorised payment transaction, the payer's payment service provider refunds to the payer immediately the amount of the unauthorised payment transaction and, where applicable, restores the debited payment account to the state in which it would have been had the unauthorised payment transaction not taken place.
2. Further financial compensation may be determined in accordance with the law applicable to the contract concluded between the payer and his payment service provider.
Article 61
Payer's liability for unauthorised payment transactions
1. By way of derogation from Article 60 the payer shall bear the losses relating to any unauthorised payment transactions, up to a maximum of EUR 150, resulting from the use of a lost or stolen payment instrument or, if the payer has failed to keep the personalised security features safe, from the misappropriation of a payment instrument.
2. The payer shall bear all the losses relating to any unauthorised payment transactions if he incurred them by acting fraudulently or by failing to fulfil one or more of his obligations under Article 56 with intent or gross negligence. In such cases, the maximum amount referred to in paragraph 1 of this Article shall not apply.
3. In cases where the payer has neither acted fraudulently nor with intent failed to fulfil his obligations under Article 56, Member States may reduce the liability referred to in paragraphs 1 and 2 of this Article, taking into account, in particular, the nature of the personalised security features of the payment instrument and the circumstances under which it was lost, stolen or misappropriated.
4. The payer shall not bear any financial consequences resulting from use of the lost, stolen or misappropriated payment instrument after notification in accordance with Article 56(1)(b), except where he has acted fraudulently.
5. If the payment service provider does not provide appropriate means for the notification at all times of a lost, stolen or misappropriated payment instrument, as required under Article 57(1)(c), the payer shall not be liable for the financial consequences resulting from use of that payment instrument, except where he has acted fraudulently.
Article 62
Refunds for payment transactions initiated by or through a payee
1. Member States shall ensure that a payer is entitled to a refund from his payment service provider of an authorised payment transaction initiated by or through a payee which has already been executed, if the following conditions are met:
(a)
the authorisation did not specify the exact amount of the payment transaction when the authorisation was made; and
(b)
the amount of the payment transaction exceeded the amount the payer could reasonably have expected taking into account his previous spending pattern, the conditions in his framework contract and relevant circumstances of the case.
At the payment service provider's request, the payer shall provide factual elements relating to such conditions.
The refund consists of the full amount of the executed payment transaction.
For direct debits the payer and his payment service provider may agree in the framework contract that the payer is entitled to a refund from his payment service provider even though the conditions for refund in the first subparagraph are not met.
2. However, for the purposes of point (b) of the first subparagraph of paragraph 1, the payer may not rely on currency exchange reasons if the reference exchange rate agreed with his payment service provider in accordance with Articles 37(1)(d) and 42(3)(b) was applied.
3. It may be agreed in the framework contract between the payer and the payment service provider that the payer has no right to a refund where he has given his consent to execute the payment transaction directly to his payment service provider and, where applicable, information on the future payment transaction was provided or made available in an agreed manner to the payer for at least four weeks before the due date by the payment service provider or by the payee.
Article 63
Requests for refunds for payment transactions initiated by or through a payee
1. Member States shall ensure that the payer can request the refund referred to in Article 62 of an authorised payment transaction initiated by or through a payee for a period of eight weeks from the date on which the funds were debited.
2. Within ten business days of receiving a request for a refund, the payment service provider shall either refund the full amount of the payment transaction or provide justification for refusing the refund, indicating the bodies to which the payer may refer the matter in accordance with Articles 80 to 83 if he does not accept the justification provided.
The payment service provider's right under the first subparagraph to refuse the refund shall not apply in the case set out in the fourth subparagraph of Article 62(1).
CHAPTER 3
Execution of payment transactions
Section 1
Payment orders and amounts transferred
Article 64
Receipt of payment orders
1. Member States shall ensure that the point in time of receipt is the time when the payment order transmitted directly by the payer or indirectly by or through a payee is received by the payer's payment service provider. If the point in time of receipt is not on a business day for the payer's payment service provider, the payment order shall be deemed to have been received on the following business day. The payment service provider may establish a cut-off time near the end of a business day beyond which any payment order received shall be deemed to have been received on the following business day.
2. If the payment service user initiating a payment order and his payment service provider agree that execution of the payment order shall start on a specific day or at the end of a certain period or on the day on which the payer has set funds at his payment service provider's disposal, the point in time of receipt for the purposes of Article 69 is deemed to be the agreed day. If the agreed day is not a business day for the payment service provider, the payment order received shall be deemed to have been received on the following business day.
Article 65
Refusal of payment orders
1. Where the payment service provider refuses to execute a payment order, the refusal and, if possible, the reasons for it and the procedure for correcting any factual mistakes that led to the refusal shall be notified to the payment service user, unless prohibited by other relevant Community or national legislation.
The payment service provider shall provide or make available the notification in an agreed manner at the earliest opportunity, and in any case, within the periods specified in Article 69.
The framework contract may include a condition that the payment service provider may charge for such a notification if the refusal is objectively justified.
2. In cases where all the conditions set out in the payer's framework contract are met, the payer's payment service provider shall not refuse to execute an authorised payment order irrespective of whether the payment order is initiated by a payer or by or through a payee, unless prohibited by other relevant Community or national legislation.
3. For the purposes of Articles 69 and 75 a payment order of which execution has been refused shall be deemed not to have been received.
Article 66
Irrevocability of a payment order
1. Member States shall ensure that the payment service user may not revoke a payment order once it has been received by the payer's payment service provider, unless otherwise specified in this Article.
2. Where the payment transaction is initiated by or through the payee, the payer may not revoke the payment order after transmitting the payment order or giving his consent to execute the payment transaction to the payee.
3. However, in the case of a direct debit and without prejudice to refund rights the payer may revoke the payment order at the latest by the end of the business day preceding the day agreed for debiting the funds.
4. In the case referred to in Article 64(2) the payment service user may revoke a payment order at the latest by the end of the business day preceding the agreed day.
5. After the time limits specified in paragraphs 1 to 4, the payment order may be revoked only if agreed between the payment service user and his payment service provider. In the case referred to in paragraphs 2 and 3, the payee's agreement shall also be required. If agreed in the framework contract, the payment service provider may charge for revocation.
Article 67
Amounts transferred and amounts received
1. Member States shall require the payment service provider of the payer, the payment service provider of the payee and any intermediaries of the payment service providers to transfer the full amount of the payment transaction and refrain from deducting charges from the amount transferred.
2. However, the payee and his payment service provider may agree that the payment service provider deduct its charges from the amount transferred before crediting it to the payee. In such a case, the full amount of the payment transaction and charges shall be separated in the information given to the payee.
3. If any charges other than those referred to in paragraph 2 are deducted from the amount transferred, the payment service provider of the payer shall ensure that the payee receives the full amount of the payment transaction initiated by the payer. In cases where the payment transaction is initiated by or through the payee, his payment service provider shall ensure that the full amount of the payment transaction is received by the payee.
Section 2
Execution time and value date
Article 68
Scope
1. This Section shall apply to:
(a)
payment transactions in euro;
(b)
national payment transactions in the currency of the Member State outside the euro area concerned; and
(c)
payment transactions involving only one currency conversion between the euro and the currency of a Member State outside the euro area, provided that the required currency conversion is carried out in the Member State outside the euro area concerned and, in the case of cross-border payment transactions, the cross-border transfer takes place in euro.
2. This Section shall apply to other payment transactions, unless otherwise agreed between the payment service user and his payment service provider, with the exception of Article 73, which is not at the disposal of the parties. However, when the payment service user and his payment service provider agree on a longer period than those laid down in Article 69, for intra-Community payment transactions such period shall not exceed 4 business days following the point in time of receipt in accordance with Article 64.
Article 69
Payment transactions to a payment account
1. Member States shall require the payer's payment service provider to ensure that, after the point in time of receipt in accordance with Article 64, the amount of the payment transaction is credited to the payee's payment service provider's account at the latest by the end of the next business day. Until 1 January 2012, a payer and his payment service provider may agree on a period no longer than three business days. These periods may be extended by a further business day for paper-initiated payment transactions.
2. Member States shall require the payment service provider of the payee to value date and make available the amount of the payment transaction to the payee's payment account after the payment service provider has received the funds in accordance with Article 73.
3. Member States shall require the payee's payment service provider to transmit a payment order initiated by or through the payee to the payer's payment service provider within the time limits agreed between the payee and his payment service provider, enabling settlement, as far as direct debit is concerned, on the agreed due date.
Article 70
Absence of payee's payment account with the payment service provider
Where the payee does not have a payment account with the payment service provider, the funds shall be made available to the payee by the payment service provider who receives the funds for the payee within the period specified in Article 69.
Article 71
Cash placed on a payment account
Where a consumer places cash on a payment account with that payment service provider in the currency of that payment account, the payment service provider shall ensure that the amount is made available and value dated immediately after the point of time of the receipt of the funds. Where the payment service user is not a consumer, the amount shall be made available and value dated at the latest on the next business day after the receipt of the funds.
Article 72
National payment transactions
For national payment transactions, Member States may provide for shorter maximum execution times than those provided for in this Section.
Article 73
Value date and availability of funds
1. Member States shall ensure that the credit value date for the payee's payment account is no later than the business day on which the amount of the payment transaction is credited to the payee's payment service provider's account.
The payment service provider of the payee shall ensure that the amount of the payment transaction is at the payee's disposal immediately after that amount is credited to the payee's payment service provider's account.
2. Member States shall ensure that the debit value date for the payer's payment account is no earlier than the point in time at which the amount of the payment transaction is debited to that payment account.
Section 3
Liability
Article 74
Incorrect unique identifiers
1. If a payment order is executed in accordance with the unique identifier, the payment order shall be deemed to have been executed correctly with regard to the payee specified by the unique identifier.
2. If the unique identifier provided by the payment service user is incorrect, the payment service provider shall not be liable under Article 75 for non-execution or defective execution of the payment transaction.
However the payer's payment service provider shall make reasonable efforts to recover the funds involved in the payment transaction.
If agreed in the framework contract, the payment service provider may charge the payment service user for recovery.
3. If the payment service user provides information additional to that specified in Articles 37(1)(a) or 42(2)(b), the payment service provider shall be liable only for the execution of payment transactions in accordance with the unique identifier provided by the payment service user.
Article 75
Non-execution or defective execution
1. Where a payment order is initiated by the payer, his payment service provider shall, without prejudice to Article 58, Article 74(2) and (3), and Article 78, be liable to the payer for correct execution of the payment transaction, unless he can prove to the payer and, where relevant, to the payee's payment service provider that the payee's payment service provider received the amount of the payment transaction in accordance with Article 69(1), in which case, the payee's payment service provider shall be liable to the payee for the correct execution of the payment transaction.
Where the payer's payment service provider is liable under the first subparagraph, he shall without undue delay refund to the payer the amount of the non-executed or defective payment transaction and, where applicable, restore the debited payment account to the state in which it would have been had the defective payment transaction not taken place.
Where the payee's payment service provider is liable under the first subparagraph, he shall immediately place the amount of the payment transaction at the payee's disposal and, where applicable, credit the corresponding amount to the payee's payment account.
In the case of a non-executed or defectively executed payment transaction where the payment order is initiated by the payer, his payment service provider shall regardless of liability under this paragraph, on request, make immediate efforts to trace the payment transaction and notify the payer of the outcome.
2. Where a payment order is initiated by or through the payee, his payment service provider shall, without prejudice to Article 58, Article 74(2) and (3), and Article 78, be liable to the payee for correct transmission of the payment order to the payment service provider of the payer in accordance with Article 69(3). Where the payee's payment service provider is liable under this subparagraph, he shall immediately re-transmit the payment order in question to the payment service provider of the payer.
In addition, the payment service provider of the payee shall, without prejudice to Article 58, Article 74(2) and (3), and Article 78, be liable to the payee for handling the payment transaction in accordance with its obligations under Article 73. Where the payee's payment service provider is liable under this subparagraph, he shall ensure that the amount of the payment transaction is at the payee's disposal immediately after that amount is credited to the payee's payment service provider's account.
In the case of a non-executed or defectively executed payment transaction for which the payee's payment service provider is not liable under the first and second subparagraphs, the payer's payment service provider shall be liable to the payer. Where the payer's payment service provider is so liable he shall, as appropriate and without undue delay, refund to the payer the amount of the non-executed or defective payment transaction and restore the debited payment account to the state in which it would have been had the defective payment transaction not taken place.
In the case of a non-executed or defectively executed payment transaction where the payment order is initiated by or through the payee, his payment service provider shall, regardless of liability under this paragraph, on request, make immediate efforts to trace the payment transaction and notify the payee of the outcome.
3. In addition, payment service providers shall be liable to their respective payment service users for any charges for which they are responsible, and for any interest to which the payment service user is subject as a consequence of non-execution or defective execution of the payment transaction.
Article 76
Additional financial compensation
Any financial compensation additional to that provided for under this Section may be determined in accordance with the law applicable to the contract concluded between the payment service user and his payment service provider.
Article 77
Right of recourse
1. Where the liability of a payment service provider under Article 75 is attributable to another payment service provider or to an intermediary, that payment service provider or intermediary shall compensate the first payment service provider for any losses incurred or sums paid under Article 75.
2. Further financial compensation may be determined in accordance with agreements between payment service providers and/or intermediaries and the law applicable to the agreement concluded between them.
Article 78
No liability
Liability under Chapter 2 and 3 shall not apply in cases of abnormal and unforeseeable circumstances beyond the control of the party pleading for the application of those circumstances, the consequences of which would have been unavoidable despite all efforts to the contrary, or where a payment service provider is bound by other legal obligations covered by national or Community legislation.
CHAPTER 4
Data protection
Article 79
Data protection
Member States shall permit the processing of personal data by payment systems and payment service providers when this is necessary to safeguard the prevention, investigation and detection of payment fraud. The processing of such personal data shall be carried out in accordance with Directive 95/46/EC.
CHAPTER 5
Out-of-court complaint and redress procedures for the settlement of disputes
Section 1
Complaint procedures
Article 80
Complaints
1. Member States shall ensure that procedures are set up which allow payment service users and other interested parties, including consumer associations, to submit complaints to the competent authorities with regard to payment service providers' alleged infringements of the provisions of national law implementing the provisions of this Directive.
2. 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 83.
Article 81
Penalties
1. Member States shall lay down the rules on penalties applicable to infringements of the national provisions adopted pursuant to this Directive and shall take all measures necessary to ensure that they are implemented. Such penalties shall be effective, proportionate and dissuasive.
2. Member States shall notify the Commission of the rules referred to in paragraph 1 and of the competent authorities referred to in Article 82 by 1 November 2009 and shall notify it without delay of any subsequent amendment affecting them.
Article 82
Competent authorities
1. Member States shall take all the measures necessary to ensure that the complaints procedures and penalties provided for in Articles 80(1) and 81(1) respectively are administered by the authorities empowered to ensure compliance with the provisions of national law adopted pursuant to the requirements laid down in this Section.
2. In the event of infringement or suspected infringement of the provisions of national law adopted pursuant to Titles III and IV, the competent authorities referred to in paragraph 1 shall be those of the home Member State of the payment service provider, except for agents and branches conducted under the right of establishment where the competent authorities shall be those of the host Member State.
Section 2
Out-of-court redress procedures
Article 83
Out-of-court redress
1. Member States shall ensure that adequate and effective out-of-court complaint and redress procedures for the settlement of disputes between payment service users and their payment service providers are put in place for disputes concerning rights and obligations arising under this Directive, using existing bodies where appropriate.
2. In the case of cross-border disputes, Member States shall make sure that those bodies cooperate actively in resolving them.
TITLE V
IMPLEMENTING MEASURES AND PAYMENTS COMMITTEE
Article 84
Implementing measures
In order to take account of technological and market developments in payment services and to ensure the uniform application of this Directive, the Commission may, in accordance with the regulatory procedure with scrutiny referred to in Article 85(2), adopt implementing measures designed to amend non-essential elements of this Directive and relating to the following:
(a)
adapting the list of activities in the Annex, in accordance with Articles 2 to 4 and 16;
(b)
changing the definition of micro enterprise within the meaning of Article 4(26) in accordance with an amendment of Recommendation 2003/361/EC;
(c)
updating the amounts specified in Articles 26(1) and 61(1) in order to take account of inflation and significant market developments.
Article 85
Committee
1. The Commission shall be assisted by a Payments Committee.
2. Where reference is made to this paragraph, Article 5a(1) to (4) and Article 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.
TITLE VI
FINAL PROVISIONS
Article 86
Full harmonisation
1. Without prejudice to Article 30(2), Article 33, Article 34(2), Article 45(6), Article 47(3), Article 48(3), Article 51(2), Article 52(3), Article 53(2), Article 61(3), and Articles 72 and 88 insofar as this Directive contains harmonised provisions, Member States shall not maintain or introduce provisions other than those laid down in this Directive.
2. Where a Member State makes use of any of the options referred to in paragraph 1, it shall inform the Commission thereof as well as of any subsequent changes. The Commission shall make the information public on a web-site or other easily accessible means.
3. Member States shall ensure that payment service providers do not derogate, to the detriment of payment service users, from the provisions of national law implementing or corresponding to provisions of this Directive except where explicitly provided for therein.
However, payment service providers may decide to grant more favourable terms to payment service users.
Article 87
Review
No later than 1 November 2012, the Commission shall present to the European Parliament, the Council, the European Economic and Social Committee and the European Central Bank a report on the implementation and impact of this Directive, in particular on:
—
the possible need to extend the scope of the Directive to payment transactions in all currencies and to payment transactions where only one of the payment service providers is located in the Community,
—
the application of Articles 6, 8 and 9 concerning prudential requirements for payment institutions, in particular as regards own funds requirements and safeguarding requirements (ringfencing),
—
the possible impact of the granting of credit by payment institutions related to payments services, as set out in Article 16(3),
—
the possible impact of the authorisation requirements of payment institutions on competition between payment institutions and other payment service providers as well as on barriers to market entry by new payment service providers,
—
the application of Articles 34 and 53 and the possible need to revise the scope of this Directive with respect to low value payment instruments and electronic money, and
—
the application and functioning of Articles 69 and 75 for all kinds of payment instruments,
accompanied, where appropriate, by a proposal for its revision.
Article 88
Transitional provision
1. Without prejudice to Directive 2005/60/EC or other relevant Community legislation, Member States shall allow legal persons who have commenced before 25 December 2007 the activities of payment institutions within the meaning of this Directive, in accordance with the national law in force to continue those activities within the Member State concerned until 30 April 2011, without authorisation under Article 10. Any such persons who have not been granted authorisation within this period shall be prohibited in accordance with Article 29 to provide payment services.
2. Notwithstanding paragraph 1, an exemption to the authorisation requirement under Article 10 shall be granted to financial institutions that have commenced activities listed in point 4 of Annex I to Directive 2006/48/EC and meet the conditions of point (e) of the first subparagraph of Article 24(1), of that Directive in accordance with national law before 25 December 2007. However, they shall notify the competent authorities of the home Member State of these activities by 25 December 2007. Furthermore, this notification shall include the information demonstrating that they have complied with Article 5(a), (d), (g) to (i), (k) and (l) of this Directive. Where the competent authorities are satisfied that those requirements are complied with, the financial institutions concerned shall be registered in accordance with Article 13 of this Directive. Member States may allow their competent authorities to exempt those financial institutions from the requirements under Article 5.
3. Member States may provide that legal persons referred to in paragraph 1 shall be automatically granted authorisation and entered into the register provided for in Article 13 if the competent authorities already have evidence that the requirements laid down in Articles 5 and 10 are complied with. The competent authorities shall inform the entities concerned before the authorisation is granted.
4. Without prejudice to Directive 2005/60/EC or other relevant Community legislation, Member States may allow natural or legal persons who have commenced the activities of payment institutions within the meaning of this Directive, in accordance with the national law in force before 25 December 2007 and who are eligible for waiver under Article 26 to continue those activities within the Member State concerned for a transitional period not longer than 3 years without being waived in accordance with Article 26 and entered into the register provided for in Article 13. Any such persons who are not waived within this period shall be prohibited in accordance with Article 29 to provide payment services.
Article 89
Amendment of Directive 97/7/EC
Article 8 of Directive 97/7/EC shall be deleted.
Article 90
Amendments of Directive 2002/65/EC
Directive 2002/65/EC is hereby amended as follows:
1.
in Article 4 the following paragraph shall be added:
‘5. Where Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market (28) is also applicable, the information provisions under Article 3(1) of this Directive, with the exception of paragraphs (2)(c) to (g), (3)(a), (d) and (e), and (4)(b), shall be replaced with Articles 36, 37, 41 and 42 of that Directive.
2.
Article 8 shall be deleted.
Article 91
Amendments of Directive 2005/60/EC
Directive 2005/60/EC is hereby amended as follows:
1.
Article 3(2)(a) shall be replaced by the following:
‘(a)
an undertaking other than a credit institution which carries out one or more of the activities listed in points 2 to 12 and 14 of Annex I to Directive 2006/48/EC, including the activities of currency exchange offices (bureaux de change)’;
2.
in Article 15 paragraphs 1 and 2 shall be replaced by the following:
‘1. Where a Member State permits credit and financial institutions referred to in Article 2(1)(1) or (2) situated in its territory to be relied on as a third party domestically, that Member State shall in any case permit institutions and persons referred to in Article 2(1) situated in its territory to recognise and accept, in accordance with Article 14, the outcome of the customer due diligence requirements laid down in Article 8(1)(a) to (c), carried out in accordance with this Directive by an institution referred to in Article 2(1)(1) or (2) in another Member State, with the exception of currency exchange offices and payment institutions as defined in Article 4(4) of Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market (29), which mainly provide the payment service listed in point 6 of the Annex to that Directive, including natural and legal persons benefiting from a waiver under Article 26 of that Directive, and meeting the requirements laid down in Articles 16 and 18 of this Directive, even if the documents or data on which these requirements have been based are different to those required in the Member State to which the customer is being referred.
2. Where a Member State permits currency exchange offices referred to in Article 3(2)(a) and payment institutions as defined in Article 4(4) of Directive 2007/64/EC, which mainly provide the payment service listed in point 6 of the Annex to that Directive, situated in its territory to be relied on as a third party domestically, that Member State shall in any case permit them to recognise and accept, in accordance with Article 14 of this Directive, the outcome of the customer due diligence requirements laid down in Article 8(1)(a) to (c), carried out in accordance with this Directive by the same category of institution in another Member State and meeting the requirements laid down in Articles 16 and 18 of this Directive, even if the documents or data on which these requirements have been based are different to those required in the Member State to which the customer is being referred.
3.
the second sentence of Article 36(1) shall be deleted.
Article 92
Amendments of Directive 2006/48/EC
Annex I to Directive 2006/48/EC is hereby amended as follows:
1.
point 4 shall be replaced by the following:
‘(4)
Payment services as defined in Article 4(3) of Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market (30)
2.
point 5 shall be replaced by the following:
‘(5)
Issuing and administering other means of payment (e.g. travellers' cheques and bankers' drafts) insofar as this activity is not covered by point 4’.
Article 93
Repeal
Directive 97/5/EC shall be repealed with effect from 1 November 2009.
Article 94
Transposition
1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive before 1 November 2009. They shall forthwith inform the Commission thereof.
When they are adopted by Member States, those measures shall contain a reference to this Directive or shall be accompanied by such reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.
2. Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.
Article 95
Entry into force
This Directive shall enter into force on the 20th day following its publication in the Official Journal of the European Union.
Article 96
Addressees
This Directive is addressed to the Member States.
Done at Strasbourg, 13 November 2007.
For the European Parliament
The President
H.-G. PΦTTERING
For the Council
The President
M. LOBO ANTUNES
(1) OJ C 109, 9.5.2006, p. 10.
(2) Opinion of the European Parliament of 24 April 2007 (not yet published in the Official Journal) and Council Decision of 15 October 2007.
(3) OJ L 43, 14.2.1997, p. 25.
(4) OJ L 344, 28.12.2001, p. 13.
(5) OJ L 365, 24.12.1987, p. 72.
(6) OJ L 317, 24.11.1988, p. 55.
(7) OJ L 208, 2.8.1997, p. 52.
(8) OJ L 177, 30.6.2006, p. 1. Directive as amended by Commission Directive 2007/44/EC (OJ L 247, 21.9.2007, p. 1).
(9) OJ L 275, 27.10.2000, p. 39.
(10) OJ L 222, 14.8.1978, p. 11. Directive as last amended by Directive 2006/46/EC of the European Parliament and of the Council (OJ L 224, 16.8.2006, p. 1).
(11) OJ L 193, 18.7.1983, p. 1. Directive as last amended by Directive 2006/99/EC (OJ L 363, 20.12.2006, p. 137).
(12) OJ L 372, 31.12.1986, p. 1. Directive as last amended by Directive 2006/46/EC.
(13) OJ L 42, 12.2.1987, p. 48. Directive as last amended by Directive 98/7/EC of the European Parliament and of the Council (OJ L 101, 1.4.1998, p. 17).
(14) OJ L 166, 11.6.1998, p. 45.
(15) OJ L 124, 20.5.2003, p. 36.
(16) OJ L 149, 11.6.2005, p. 22.
(17) OJ L 178, 17.7.2000, p. 1.
(18) OJ L 271, 9.10.2002, p. 16. Directive as amended by Directive 2005/29/EC.
(19) OJ L 281, 23.11.1995, p. 31. Directive as amended by Regulation (EC) No 1882/2003 (OJ L 284, 31.10.2003, p. 1).
(20) OJ C 27, 26.1.1998, p. 34.
(21) OJ L 144, 4.6.1997, p. 19. Directive as last amended by Directive 2005/29/EC.
(22) OJ L 309, 25.11.2005, p. 15.
(23) OJ L 184, 17.7.1999, p. 23. Decision as amended by Decision 2006/512/EC (OJ L 200, 22.7.2006, p. 11).
(24) OJ C 321, 31.12.2003, p. 1.
(25) OJ L 345, 8.12.2006, p. 1.
(26) OJ L 157, 9.6.2006, p. 87.
(27) OJ L 243, 11.9.2002, p. 1.
(28) OJ L 319, 5.12.2007, p. 1’;
(29) OJ L 319, 5.12.2007, p. 1’;
(30) OJ L 319, 5.12.2007, p. 1’;
ANNEX
PAYMENT SERVICES (DEFINITION 3 IN ARTICLE 4)
1.
Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account.
2.
Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account.
3.
Execution of payment transactions, including transfers of funds on a payment account with the user's payment service provider or with another payment service provider:
—
execution of direct debits, including one-off direct debits,
—
execution of payment transactions through a payment card or a similar device,
—
execution of credit transfers, including standing orders.
4.
Execution of payment transactions where the funds are covered by a credit line for a payment service user:
—
execution of direct debits, including one-off direct debits,
—
execution of payment transactions through a payment card or a similar device,
—
execution of credit transfers, including standing orders.
5.
Issuing and/or acquiring of payment instruments.
6.
Money remittance.
7.
Execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting only as an intermediary between the payment service user and the supplier of the goods and services.

DirectiveEC2006/0048

_ADDRESS.WPG:
* http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32006L0048,

DirectiveEC2005/0060

_TITLE:
Directive 2005/60/EC of the European Parliament and of the-Council#ql:eu'council@cptCore13.4# of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (Text with EEA relevance)

_ADDRESS.WPG:
* http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32005L0060,

25.11.2005
EN
Official Journal of the European Union
L 309/15
DIRECTIVE 2005/60/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 26 October 2005
on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing
(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 47(2), first and third sentences, and Article 95 thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Economic and Social Committee (1),
Having regard to the opinion of the European Central Bank (2),
Acting in accordance with the procedure laid down in Article 251 of the Treaty (3),
Whereas:
(1)
Massive flows of dirty money can damage the stability and reputation of the financial sector and threaten the single market, and terrorism shakes the very foundations of our society. In addition to the criminal law approach, a preventive effort via the financial system can produce results.
(2)
The soundness, integrity and stability of credit and financial institutions and confidence in the financial system as a whole could be seriously jeopardised by the efforts of criminals and their associates either to disguise the origin of criminal proceeds or to channel lawful or unlawful money for terrorist purposes. In order to avoid Member States' adopting measures to protect their financial systems which could be inconsistent with the functioning of the internal market and with the prescriptions of the rule of law and Community public policy, Community action in this area is necessary.
(3)
In order to facilitate their criminal activities, money launderers and terrorist financers could try to take advantage of the freedom of capital movements and the freedom to supply financial services which the integrated financial area entails, if certain coordinating measures are not adopted at Community level.
(4)
In order to respond to these concerns in the field of money laundering, Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering (4) was adopted. It required Member States to prohibit money laundering and to oblige the financial sector, comprising credit institutions and a wide range of other financial institutions, to identify their customers, keep appropriate records, establish internal procedures to train staff and guard against money laundering and to report any indications of money laundering to the competent authorities.
(5)
Money laundering and terrorist financing are frequently carried out in an international context. Measures adopted solely at national or even Community level, without taking account of international coordination and cooperation, would have very limited effects. The measures adopted by the Community in this field should therefore be consistent with other action undertaken in other international fora. The Community action should continue to take particular account of the Recommendations of the Financial Action Task Force (hereinafter referred to as the FATF), which constitutes the foremost international body active in the fight against money laundering and terrorist financing. Since the FATF Recommendations were substantially revised and expanded in 2003, this Directive should be in line with that new international standard.
(6)
The General Agreement on Trade in Services (GATS) allows Members to adopt measures necessary to protect public morals and prevent fraud and adopt measures for prudential reasons, including for ensuring the stability and integrity of the financial system.
(7)
Although initially limited to drugs offences, there has been a trend in recent years towards a much wider definition of money laundering based on a broader range of predicate offences. A wider range of predicate offences facilitates the reporting of suspicious transactions and international cooperation in this area. Therefore, the definition of serious crime should be brought into line with the definition of serious crime in Council Framework Decision 2001/500/JHA of 26 June 2001 on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime (5).
(8)
Furthermore, the misuse of the financial system to channel criminal or even clean money to terrorist purposes poses a clear risk to the integrity, proper functioning, reputation and stability of the financial system. Accordingly, the preventive measures of this Directive should cover not only the manipulation of money derived from crime but also the collection of money or property for terrorist purposes.
(9)
Directive 91/308/EEC, though imposing a customer identification obligation, contained relatively little detail on the relevant procedures. In view of the crucial importance of this aspect of the prevention of money laundering and terrorist financing, it is appropriate, in accordance with the new international standards, to introduce more specific and detailed provisions relating to the identification of the customer and of any beneficial owner and the verification of their identity. To that end a precise definition of ‘beneficial owner’ is essential. Where the individual beneficiaries of a legal entity or arrangement such as a foundation or trust are yet to be determined, and it is therefore impossible to identify an individual as the beneficial owner, it would suffice to identify the class of persons intended to be the beneficiaries of the foundation or trust. This requirement should not include the identification of the individuals within that class of persons.
(10)
The institutions and persons covered by this Directive should, in conformity with this Directive, identify and verify the identity of the beneficial owner. To fulfil this requirement, it should be left to those institutions and persons whether they make use of public records of beneficial owners, ask their clients for relevant data or obtain the information otherwise, taking into account the fact that the extent of such customer due diligence measures relates to the risk of money laundering and terrorist financing, which depends on the type of customer, business relationship, product or transaction.
(11)
Credit agreements in which the credit account serves exclusively to settle the loan and the repayment of the loan is effected from an account which was opened in the name of the customer with a credit institution covered by this Directive pursuant to Article 8(1)(a) to (c) should generally be considered as an example of types of less risky transactions.
(12)
To the extent that the providers of the property of a legal entity or arrangement have significant control over the use of the property they should be identified as a beneficial owner.
(13)
Trust relationships are widely used in commercial products as an internationally recognised feature of the comprehensively supervised wholesale financial markets. An obligation to identify the beneficial owner does not arise from the fact alone that there is a trust relationship in this particular case.
(14)
This Directive should also apply to those activities of the institutions and persons covered hereunder which are performed on the Internet.
(15)
As the tightening of controls in the financial sector has prompted money launderers and terrorist financers to seek alternative methods for concealing the origin of the proceeds of crime and as such channels can be used for terrorist financing, the anti-money laundering and anti-terrorist financing obligations should cover life insurance intermediaries and trust and company service providers.
(16)
Entities already falling under the legal responsibility of an insurance undertaking, and therefore falling within the scope of this Directive, should not be included within the category of insurance intermediary.
(17)
Acting as a company director or secretary does not of itself make someone a trust and company service provider. For that reason, the definition covers only those persons that act as a company director or secretary for a third party and by way of business.
(18)
The use of large cash payments has repeatedly proven to be very vulnerable to money laundering and terrorist financing. Therefore, in those Member States that allow cash payments above the established threshold, all natural or legal persons trading in goods by way of business should be covered by this Directive when accepting such cash payments. Dealers in high-value goods, such as precious stones or metals, or works of art, and auctioneers are in any event covered by this Directive to the extent that payments to them are made in cash in an amount of EUR 15 000 or more. To ensure effective monitoring of compliance with this Directive by that potentially wide group of institutions and persons, Member States may focus their monitoring activities in particular on those natural and legal persons trading in goods that are exposed to a relatively high risk of money laundering or terrorist financing, in accordance with the principle of risk-based supervision. In view of the different situations in the various Member States, Member States may decide to adopt stricter provisions, in order to properly address the risk involved with large cash payments.
(19)
Directive 91/308/EEC brought notaries and other independent legal professionals within the scope of the Community anti-money laundering regime; this coverage should be maintained unchanged in this Directive; these legal professionals, as defined by the Member States, are subject to the provisions of this Directive when participating in financial or corporate transactions, including providing tax advice, where there is the greatest risk of the services of those legal professionals being misused for the purpose of laundering the proceeds of criminal activity or for the purpose of terrorist financing.
(20)
Where independent members of professions providing legal advice which are legally recognised and controlled, such as lawyers, are ascertaining the legal position of a client or representing a client in legal proceedings, it would not be appropriate under this Directive to put those legal professionals in respect of these activities under an obligation to report suspicions of money laundering or terrorist financing. There must be exemptions from any obligation to report information obtained either before, during or after judicial proceedings, or in the course of ascertaining the legal position for a client. Thus, legal advice shall remain subject to the obligation of professional secrecy unless the legal counsellor is taking part in money laundering or terrorist financing, the legal advice is provided for money laundering or terrorist financing purposes or the lawyer knows that the client is seeking legal advice for money laundering or terrorist financing purposes.
(21)
Directly comparable services need to be treated in the same manner when provided by any of the professionals covered by this Directive. In order to ensure the respect of the rights laid down in the European Convention for the Protection of Human Rights and Fundamental Freedoms and the Treaty on European Union, in the case of auditors, external accountants and tax advisors, who, in some Member States, may defend or represent a client in the context of judicial proceedings or ascertain a client's legal position, the information they obtain in the performance of those tasks should not be subject to the reporting obligations in accordance with this Directive.
(22)
It should be recognised that the risk of money laundering and terrorist financing is not the same in every case. In line with a risk-based approach, the principle should be introduced into Community legislation that simplified customer due diligence is allowed in appropriate cases.
(23)
The derogation concerning the identification of beneficial owners of pooled accounts held by notaries or other independent legal professionals should be without prejudice to the obligations that those notaries or other independent legal professionals have pursuant to this Directive. Those obligations include the need for such notaries or other independent legal professionals themselves to identify the beneficial owners of the pooled accounts held by them.
(24)
Equally, Community legislation should recognise that certain situations present a greater risk of money laundering or terrorist financing. Although the identity and business profile of all customers should be established, there are cases where particularly rigorous customer identification and verification procedures are required.
(25)
This is particularly true of business relationships with individuals holding, or having held, important public positions, particularly those from countries where corruption is widespread. Such relationships may expose the financial sector in particular to significant reputational and/or legal risks. The international effort to combat corruption also justifies the need to pay special attention to such cases and to apply the complete normal customer due diligence measures in respect of domestic politically exposed persons or enhanced customer due diligence measures in respect of politically exposed persons residing in another Member State or in a third country.
(26)
Obtaining approval from senior management for establishing business relationships should not imply obtaining approval from the board of directors but from the immediate higher level of the hierarchy of the person seeking such approval.
(27)
In order to avoid repeated customer identification procedures, leading to delays and inefficiency in business, it is appropriate, subject to suitable safeguards, to allow customers to be introduced whose identification has been carried out elsewhere. Where an institution or person covered by this Directive relies on a third party, the ultimate responsibility for the customer due diligence procedure remains with the institution or person to whom the customer is introduced. The third party, or introducer, also retains his own responsibility for all the requirements in this Directive, including the requirement to report suspicious transactions and maintain records, to the extent that he has a relationship with the customer that is covered by this Directive.
(28)
In the case of agency or outsourcing relationships on a contractual basis between institutions or persons covered by this Directive and external natural or legal persons not covered hereby, any anti-money laundering and anti-terrorist financing obligations for those agents or outsourcing service providers as part of the institutions or persons covered by this Directive, may only arise from contract and not from this Directive. The responsibility for complying with this Directive should remain with the institution or person covered hereby.
(29)
Suspicious transactions should be reported to the financial intelligence unit (FIU), which serves as a national centre for receiving, analysing and disseminating to the competent authorities suspicious transaction reports and other information regarding potential money laundering or terrorist financing. This should not compel Member States to change their existing reporting systems where the reporting is done through a public prosecutor or other law enforcement authorities, as long as the information is forwarded promptly and unfiltered to FIUs, allowing them to conduct their business properly, including international cooperation with other FIUs.
(30)
By way of derogation from the general prohibition on executing suspicious transactions, the institutions and persons covered by this Directive may execute suspicious transactions before informing the competent authorities, where refraining from the execution thereof is impossible or likely to frustrate efforts to pursue the beneficiaries of a suspected money laundering or terrorist financing operation. This, however, should be without prejudice to the international obligations accepted by the Member States to freeze without delay funds or other assets of terrorists, terrorist organisations or those who finance terrorism, in accordance with the relevant United Nations Security Council resolutions.
(31)
Where a Member State decides to make use of the exemptions provided for in Article 23(2), it may allow or require the self-regulatory body representing the persons referred to therein not to transmit to the FIU any information obtained from those persons in the circumstances referred to in that Article.
(32)
There has been a number of cases of employees who report their suspicions of money laundering being subjected to threats or hostile action. Although this Directive cannot interfere with Member States' judicial procedures, this is a crucial issue for the effectiveness of the anti-money laundering and anti-terrorist financing system. Member States should be aware of this problem and should do whatever they can to protect employees from such threats or hostile action.
(33)
Disclosure of information as referred to in Article 28 should be in accordance with the rules on transfer of personal data to third countries as laid down in Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (6). Moreover, Article 28 cannot interfere with national data protection and professional secrecy legislation.
(34)
Persons who merely convert paper documents into electronic data and are acting under a contract with a credit institution or a financial institution do not fall within the scope of this Directive, nor does any natural or legal person that provides credit or financial institutions solely with a message or other support systems for transmitting funds or with clearing and settlement systems.
(35)
Money laundering and terrorist financing are international problems and the effort to combat them should be global. Where Community credit and financial institutions have branches and subsidiaries located in third countries where the legislation in this area is deficient, they should, in order to avoid the application of very different standards within an institution or group of institutions, apply the Community standard or notify the competent authorities of the home Member State if this application is impossible.
(36)
It is important that credit and financial institutions should be able to respond rapidly to requests for information on whether they maintain business relationships with named persons. For the purpose of identifying such business relationships in order to be able to provide that information quickly, credit and financial institutions should have effective systems in place which are commensurate with the size and nature of their business. In particular it would be appropriate for credit institutions and larger financial institutions to have electronic systems at their disposal. This provision is of particular importance in the context of procedures leading to measures such as the freezing or seizing of assets (including terrorist assets), pursuant to applicable national or Community legislation with a view to combating terrorism.
(37)
This Directive establishes detailed rules for customer due diligence, including enhanced customer due diligence for high-risk customers or business relationships, such as appropriate procedures to determine whether a person is a politically exposed person, and certain additional, more detailed requirements, such as the existence of compliance management procedures and policies. All these requirements are to be met by each of the institutions and persons covered by this Directive, while Member States are expected to tailor the detailed implementation of those provisions to the particularities of the various professions and to the differences in scale and size of the institutions and persons covered by this Directive.
(38)
In order to ensure that the institutions and others subject to Community legislation in this field remain committed, feedback should, where practicable, be made available to them on the usefulness and follow-up of the reports they present. To make this possible, and to be able to review the effectiveness of their systems to combat money laundering and terrorist financing Member States should keep and improve the relevant statistics.
(39)
When registering or licensing a currency exchange office, a trust and company service provider or a casino nationally, competent authorities should ensure that the persons who effectively direct or will direct the business of such entities and the beneficial owners of such entities are fit and proper persons. The criteria for determining whether or not a person is fit and proper should be established in conformity with national law. As a minimum, such criteria should reflect the need to protect such entities from being misused by their managers or beneficial owners for criminal purposes.
(40)
Taking into account the international character of money laundering and terrorist financing, coordination and cooperation between FIUs as referred to in Council Decision 2000/642/JHA of 17 October 2000 concerning arrangements for cooperation between financial intelligence units of the Member States in respect of exchanging information (7), including the establishment of an EU FIU-net, should be encouraged to the greatest possible extent. To that end, the Commission should lend such assistance as may be needed to facilitate such coordination, including financial assistance.
(41)
The importance of combating money laundering and terrorist financing should lead Member States to lay down effective, proportionate and dissuasive penalties in national law for failure to respect the national provisions adopted pursuant to this Directive. Provision should be made for penalties in respect of natural and legal persons. Since legal persons are often involved in complex money laundering or terrorist financing operations, sanctions should also be adjusted in line with the activity carried on by legal persons.
(42)
Natural persons exercising any of the activities referred to in Article 2(1)(3)(a) and (b) within the structure of a legal person, but on an independent basis, should be independently responsible for compliance with the provisions of this Directive, with the exception of Article 35.
(43)
Clarification of the technical aspects of the rules laid down in this Directive may be necessary to ensure an effective and sufficiently consistent implementation of this Directive, taking into account the different financial instruments, professions and risks in the different Member States and the technical developments in the fight against money laundering and terrorist financing. The Commission should accordingly be empowered to adopt implementing measures, such as certain criteria for identifying low and high risk situations in which simplified due diligence could suffice or enhanced due diligence would be appropriate, provided that they do not modify the essential elements of this Directive and provided that the Commission acts in accordance with the principles set out herein, after consulting the Committee on the Prevention of Money Laundering and Terrorist Financing.
(44)
The measures necessary for the implementation of this Directive should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (8). To that end a new Committee on the Prevention of Money Laundering and Terrorist Financing, replacing the Money Laundering Contact Committee set up by Directive 91/308/EEC, should be established.
(45)
In view of the very substantial amendments that would need to be made to Directive 91/308/EEC, it should be repealed for reasons of clarity.
(46)
Since the objective of this Directive, namely the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale and 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 Directive does not go beyond what is necessary in order to achieve that objective.
(47)
In exercising its implementing powers in accordance with this Directive, the Commission should respect the following principles: the need for high levels of transparency and consultation with institutions and persons covered by this Directive and with the European Parliament and the Council; the need to ensure that competent authorities will be able to ensure compliance with the rules consistently; the balance of costs and benefits to institutions and persons covered by this Directive on a long-term basis in any implementing measures; the need to respect the necessary flexibility in the application of the implementing measures in accordance with a risk-sensitive approach; the need to ensure coherence with other Community legislation in this area; the need to protect the Community, its Member States and their citizens from the consequences of money laundering and terrorist financing.
(48)
This Directive respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. Nothing in this Directive should be interpreted or implemented in a manner that is inconsistent with the European Convention on Human Rights,
HAVE ADOPTED THIS DIRECTIVE:
CHAPTER I
SUBJECT MATTER, SCOPE AND DEFINITIONS
Article 1
1. Member States shall ensure that money laundering and terrorist financing are prohibited.
2. For the purposes of this Directive, the following conduct, when committed intentionally, shall be regarded as money laundering:
(a)
the conversion or transfer of property, knowing that such property is derived from criminal activity or from an act of participation in such activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such activity to evade the legal consequences of his action;
(b)
the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from criminal activity or from an act of participation in such activity;
(c)
the acquisition, possession or use of property, knowing, at the time of receipt, that such property was derived from criminal activity or from an act of participation in such activity;
(d)
participation in, association to commit, attempts to commit and aiding, abetting, facilitating and counselling the commission of any of the actions mentioned in the foregoing points.
3. Money laundering shall be regarded as such even where the activities which generated the property to be laundered were carried out in the territory of another Member State or in that of a third country.
4. For the purposes of this Directive, ‘terrorist financing’ means the provision or collection of funds, by any means, directly or indirectly, with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out any of the offences within the meaning of Articles 1 to 4 of Council Framework Decision 2002/475/JHA of 13 June 2002 on combating terrorism (9).
5. Knowledge, intent or purpose required as an element of the activities mentioned in paragraphs 2 and 4 may be inferred from objective factual circumstances.
Article 2
1. This Directive shall apply to:
(1)
credit institutions;
(2)
financial institutions;
(3)
the following legal or natural persons acting in the exercise of their professional activities:
(a)
auditors, external accountants and tax advisors;
(b)
notaries and other independent legal professionals, when they participate, whether by acting on behalf of and for their client in any financial or real estate transaction, or by assisting in the planning or execution of transactions for their client concerning the:
(i)
buying and selling of real property or business entities;
(ii)
managing of client money, securities or other assets;
(iii)
opening or management of bank, savings or securities accounts;
(iv)
organisation of contributions necessary for the creation, operation or management of companies;
(v)
creation, operation or management of trusts, companies or similar structures;
(c)
trust or company service providers not already covered under points (a) or (b);
(d)
real estate agents;
(e)
other natural or legal persons trading in goods, only to the extent that payments are made in cash in an amount of EUR 15 000 or more, whether the transaction is executed in a single operation or in several operations which appear to be linked;
(f)
casinos.
2. Member States may decide that legal and natural persons who engage in a financial activity on an occasional or very limited basis and where there is little risk of money laundering or terrorist financing occurring do not fall within the scope of Article 3(1) or (2).
Article 3
For the purposes of this Directive the following definitions shall apply:
(1)
‘credit institution’ means a credit institution, as defined in the first subparagraph of Article 1(1) of Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions (10), including branches within the meaning of Article 1(3) of that Directive located in the Community of credit institutions having their head offices inside or outside the Community;
(2)
‘financial institution’ means:
(a)
an undertaking other than a credit institution which carries out one or more of the operations included in points 2 to 12 and 14 of Annex I to Directive 2000/12/EC, including the activities of currency exchange offices (bureaux de change) and of money transmission or remittance offices;
(b)
an insurance company duly authorised in accordance with Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance (11), insofar as it carries out activities covered by that Directive;
(c)
an investment firm as defined in point 1 of Article 4(1) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments (12);
(d)
a collective investment undertaking marketing its units or shares;
(e)
an insurance intermediary as defined in Article 2(5) of Directive 2002/92/EC of the European Parliament and of the Council of 9 December 2002 on insurance mediation (13), with the exception of intermediaries as mentioned in Article 2(7) of that Directive, when they act in respect of life insurance and other investment related services;
(f)
branches, when located in the Community, of financial institutions as referred to in points (a) to (e), whose head offices are inside or outside the Community;
(3)
‘property’ means assets of every kind, whether corporeal or incorporeal, movable or immovable, tangible or intangible, and legal documents or instruments in any form including electronic or digital, evidencing title to or an interest in such assets;
(4)
‘criminal activity’ means any kind of criminal involvement in the commission of a serious crime;
(5)
‘serious crimes’ means, at least:
(a)
acts as defined in Articles 1 to 4 of Framework Decision 2002/475/JHA;
(b)
any of the offences defined in Article 3(1)(a) of the 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances;
(c)
the activities of criminal organisations as defined in Article 1 of Council Joint Action 98/733/JHA of 21 December 1998 on making it a criminal offence to participate in a criminal organisation in the Member States of the European Union (14);
(d)
fraud, at least serious, as defined in Article 1(1) and Article 2 of the Convention on the Protection of the European Communities' Financial Interests (15);
(e)
corruption;
(f)
all offences which are punishable by deprivation of liberty or a detention order for a maximum of more than one year or, as regards those States which have a minimum threshold for offences in their legal system, all offences punishable by deprivation of liberty or a detention order for a minimum of more than six months;
(6)
‘beneficial owner’ means the natural person(s) who ultimately owns or controls the customer and/or the natural person on whose behalf a transaction or activity is being conducted. The beneficial owner shall at least include:
(a)
in the case of corporate entities:
(i)
the natural person(s) who ultimately owns or controls a legal entity through direct or indirect ownership or control over a sufficient percentage of the shares or voting rights in that legal entity, including through bearer share holdings, other than a company listed on a regulated market that is subject to disclosure requirements consistent with Community legislation or subject to equivalent international standards; a percentage of 25 % plus one share shall be deemed sufficient to meet this criterion;
(ii)
the natural person(s) who otherwise exercises control over the management of a legal entity:
(b)
in the case of legal entities, such as foundations, and legal arrangements, such as trusts, which administer and distribute funds:
(i)
where the future beneficiaries have already been determined, the natural person(s) who is the beneficiary of 25 % or more of the property of a legal arrangement or entity;
(ii)
where the individuals that benefit from the legal arrangement or entity have yet to be determined, the class of persons in whose main interest the legal arrangement or entity is set up or operates;
(iii)
the natural person(s) who exercises control over 25 % or more of the property of a legal arrangement or entity;
(7)
‘trust and company service providers’ means any natural or legal person which by way of business provides any of the following services to third parties:
(a)
forming companies or other legal persons;
(b)
acting as or arranging for another person to act as a director or secretary of a company, a partner of a partnership, or a similar position in relation to other legal persons;
(c)
providing a registered office, business address, correspondence or administrative address and other related services for a company, a partnership or any other legal person or arrangement;
(d)
acting as or arranging for another person to act as a trustee of an express trust or a similar legal arrangement;
(e)
acting as or arranging for another person to act as a nominee shareholder for another person other than a company listed on a regulated market that is subject to disclosure requirements in conformity with Community legislation or subject to equivalent international standards;
(8)
‘politically exposed persons’ means natural persons who are or have been entrusted with prominent public functions and immediate family members, or persons known to be close associates, of such persons;
(9)
‘business relationship’ means a business, professional or commercial relationship which is connected with the professional activities of the institutions and persons covered by this Directive and which is expected, at the time when the contact is established, to have an element of duration;
(10)
‘shell bank’ means a credit institution, or an institution engaged in equivalent activities, incorporated in a jurisdiction in which it has no physical presence, involving meaningful mind and management, and which is unaffiliated with a regulated financial group.
Article 4
1. Member States shall ensure that the provisions of this Directive are extended in whole or in part to professions and to categories of undertakings, other than the institutions and persons referred to in Article 2(1), which engage in activities which are particularly likely to be used for money laundering or terrorist financing purposes.
2. Where a Member State decides to extend the provisions of this Directive to professions and to categories of undertakings other than those referred to in Article 2(1), it shall inform the Commission thereof.
Article 5
The Member States may adopt or retain in force stricter provisions in the field covered by this Directive to prevent money laundering and terrorist financing.
CHAPTER II
CUSTOMER DUE DILIGENCE
SECTION 1
General provisions
Article 6
Member States shall prohibit their credit and financial institutions from keeping anonymous accounts or anonymous passbooks. By way of derogation from Article 9(6), Member States shall in all cases require that the owners and beneficiaries of existing anonymous accounts or anonymous passbooks be made the subject of customer due diligence measures as soon as possible and in any event before such accounts or passbooks are used in any way.
Article 7
The institutions and persons covered by this Directive shall apply customer due diligence measures in the following cases:
(a)
when establishing a business relationship;
(b)
when carrying out occasional transactions amounting to EUR 15 000 or more, whether the transaction is carried out in a single operation or in several operations which appear to be linked;
(c)
when there is a suspicion of money laundering or terrorist financing, regardless of any derogation, exemption or threshold;
(d)
when there are doubts about the veracity or adequacy of previously obtained customer identification data.
Article 8
1. Customer due diligence measures shall comprise:
(a)
identifying the customer and verifying the customer's identity on the basis of documents, data or information obtained from a reliable and independent source;
(b)
identifying, where applicable, the beneficial owner and taking risk-based and adequate measures to verify his identity so that the institution or person covered by this Directive is satisfied that it knows who the beneficial owner is, including, as regards legal persons, trusts and similar legal arrangements, taking risk-based and adequate measures to understand the ownership and control structure of the customer;
(c)
obtaining information on the purpose and intended nature of the business relationship;
(d)
conducting ongoing monitoring of the business relationship including scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the institution's or person's knowledge of the customer, the business and risk profile, including, where necessary, the source of funds and ensuring that the documents, data or information held are kept up-to-date.
2. The institutions and persons covered by this Directive shall apply each of the customer due diligence requirements set out in paragraph 1, but may determine the extent of such measures on a risk-sensitive basis depending on the type of customer, business relationship, product or transaction. The institutions and persons covered by this Directive shall be able to demonstrate to the competent authorities mentioned in Article 37, including self-regulatory bodies, that the extent of the measures is appropriate in view of the risks of money laundering and terrorist financing.
Article 9
1. Member States shall require that the verification of the identity of the customer and the beneficial owner takes place before the establishment of a business relationship or the carrying-out of the transaction.
2. By way of derogation from paragraph 1, Member States may allow the verification of the identity of the customer and the beneficial owner to be completed during the establishment of a business relationship if this is necessary not to interrupt the normal conduct of business and where there is little risk of money laundering or terrorist financing occurring. In such situations these procedures shall be completed as soon as practicable after the initial contact.
3. By way of derogation from paragraphs 1 and 2, Member States may, in relation to life insurance business, allow the verification of the identity of the beneficiary under the policy to take place after the business relationship has been established. In that case, verification shall take place at or before the time of payout or at or before the time the beneficiary intends to exercise rights vested under the policy.
4. By way of derogation from paragraphs 1 and 2, Member States may allow the opening of a bank account provided that there are adequate safeguards in place to ensure that transactions are not carried out by the customer or on its behalf until full compliance with the aforementioned provisions is obtained.
5. Member States shall require that, where the institution or person concerned is unable to comply with points (a), (b) and (c) of Article 8(1), it may not carry out a transaction through a bank account, establish a business relationship or carry out the transaction, or shall terminate the business relationship, and shall consider making a report to the financial intelligence unit (FIU) in accordance with Article 22 in relation to the customer.
Member States shall not be obliged to apply the previous subparagraph in situations when notaries, independent legal professionals, auditors, external accountants and tax advisors are in the course of ascertaining the legal position for their client or performing their task of defending or representing that client in, or concerning judicial proceedings, including advice on instituting or avoiding proceedings.
6. Member States shall require that institutions and persons covered by this Directive apply the customer due diligence procedures not only to all new customers but also at appropriate times to existing customers on a risk-sensitive basis.
Article 10
1. Member States shall require that all casino customers be identified and their identity verified if they purchase or exchange gambling chips with a value of EUR 2 000 or more.
2. Casinos subject to State supervision shall be deemed in any event to have satisfied the customer due diligence requirements if they register, identify and verify the identity of their customers immediately on or before entry, regardless of the amount of gambling chips purchased.
SECTION 2
Simplified customer due diligence
Article 11
1. By way of derogation from Articles 7(a), (b) and (d), 8 and 9(1), the institutions and persons covered by this Directive shall not be subject to the requirements provided for in those Articles where the customer is a credit or financial institution covered by this Directive, or a credit or financial institution situated in a third country which imposes requirements equivalent to those laid down in this Directive and supervised for compliance with those requirements.
2. By way of derogation from Articles 7(a), (b) and (d), 8 and 9(1) Member States may allow the institutions and persons covered by this Directive not to apply customer due diligence in respect of:
(a)
listed companies whose securities are admitted to trading on a regulated market within the meaning of Directive 2004/39/EC in one or more Member States and listed companies from third countries which are subject to disclosure requirements consistent with Community legislation;
(b)
beneficial owners of pooled accounts held by notaries and other independent legal professionals from the Member States, or from third countries provided that they are subject to requirements to combat money laundering or terrorist financing consistent with international standards and are supervised for compliance with those requirements and provided that the information on the identity of the beneficial owner is available, on request, to the institutions that act as depository institutions for the pooled accounts;
(c)
domestic public authorities,
or in respect of any other customer representing a low risk of money laundering or terrorist financing which meets the technical criteria established in accordance with Article 40(1)(b).
3. In the cases mentioned in paragraphs 1 and 2, institutions and persons covered by this Directive shall in any case gather sufficient information to establish if the customer qualifies for an exemption as mentioned in these paragraphs.
4. The Member States shall inform each other and the Commission of cases where they consider that a third country meets the conditions laid down in paragraphs 1 or 2 or in other situations which meet the technical criteria established in accordance with Article 40(1)(b).
5. By way of derogation from Articles 7(a), (b) and (d), 8 and 9(1), Member States may allow the institutions and persons covered by this Directive not to apply customer due diligence in respect of:
(a)
life insurance policies where the annual premium is no more than EUR 1 000 or the single premium is no more than EUR 2 500;
(b)
insurance policies for pension schemes if there is no surrender clause and the policy cannot be used as collateral;
(c)
a pension, superannuation or similar scheme that provides retirement benefits to employees, where contributions are made by way of deduction from wages and the scheme rules do not permit the assignment of a member's interest under the scheme;
(d)
electronic money, as defined in Article 1(3)(b) of Directive 2000/46/EC of the European Parliament and of the Council of 18 September 2000 on the taking up, pursuit of and prudential supervision of the business of electronic money institutions (16), where, if the device cannot be recharged, the maximum amount stored in the device is no more than EUR 150, or where, if the device can be recharged, a limit of EUR 2 500 is imposed on the total amount transacted in a calendar year, except when an amount of EUR 1 000 or more is redeemed in that same calendar year by the bearer as referred to in Article 3 of Directive 2000/46/EC,
or in respect of any other product or transaction representing a low risk of money laundering or terrorist financing which meets the technical criteria established in accordance with Article 40(1)(b).
Article 12
Where the Commission adopts a decision pursuant to Article 40(4), the Member States shall prohibit the institutions and persons covered by this Directive from applying simplified due diligence to credit and financial institutions or listed companies from the third country concerned or other entities following from situations which meet the technical criteria established in accordance with Article 40(1)(b).
SECTION 3
Enhanced customer due diligence
Article 13
1. Member States shall require the institutions and persons covered by this Directive to apply, on a risk-sensitive basis, enhanced customer due diligence measures, in addition to the measures referred to in Articles 7, 8 and 9(6), in situations which by their nature can present a higher risk of money laundering or terrorist financing, and at least in the situations set out in paragraphs 2, 3, 4 and in other situations representing a high risk of money laundering or terrorist financing which meet the technical criteria established in accordance with Article 40(1)(c).
2. Where the customer has not been physically present for identification purposes, Member States shall require those institutions and persons to take specific and adequate measures to compensate for the higher risk, for example by applying one or more of the following measures:
(a)
ensuring that the customer's identity is established by additional documents, data or information;
(b)
supplementary measures to verify or certify the documents supplied, or requiring confirmatory certification by a credit or financial institution covered by this Directive;
(c)
ensuring that the first payment of the operations is carried out through an account opened in the customer's name with a credit institution.
3. In respect of cross-frontier correspondent banking relationships with respondent institutions from third countries, Member States shall require their credit institutions to:
(a)
gather sufficient information about a respondent institution to understand fully the nature of the respondent's business and to determine from publicly available information the reputation of the institution and the quality of supervision;
(b)
assess the respondent institution's anti-money laundering and anti-terrorist financing controls;
(c)
obtain approval from senior management before establishing new correspondent banking relationships;
(d)
document the respective responsibilities of each institution;
(e)
with respect to payable-through accounts, be satisfied that the respondent credit institution has verified the identity of and performed ongoing due diligence on the customers having direct access to accounts of the correspondent and that it is able to provide relevant customer due diligence data to the correspondent institution, upon request.
4. In respect of transactions or business relationships with politically exposed persons residing in another Member State or in a third country, Member States shall require those institutions and persons covered by this Directive to:
(a)
have appropriate risk-based procedures to determine whether the customer is a politically exposed person;
(b)
have senior management approval for establishing business relationships with such customers;
(c)
take adequate measures to establish the source of wealth and source of funds that are involved in the business relationship or transaction;
(d)
conduct enhanced ongoing monitoring of the business relationship.
5. Member States shall prohibit credit institutions from entering into or continuing a correspondent banking relationship with a shell bank and shall require that credit institutions take appropriate measures to ensure that they do not engage in or continue correspondent banking relationships with a bank that is known to permit its accounts to be used by a shell bank.
6. Member States shall ensure that the institutions and persons covered by this Directive pay special attention to any money laundering or terrorist financing threat that may arise from products or transactions that might favour anonymity, and take measures, if needed, to prevent their use for money laundering or terrorist financing purposes.
SECTION 4
Performance by third parties
Article 14
Member States may permit the institutions and persons covered by this Directive to rely on third parties to meet the requirements laid down in Article 8(1)(a) to (c). However, the ultimate responsibility for meeting those requirements shall remain with the institution or person covered by this Directive which relies on the third party.
Article 15
1. Where a Member State permits credit and financial institutions referred to in Article 2(1)(1) or (2) situated in its territory to be relied on as a third party domestically, that Member State shall in any case permit institutions and persons referred to in Article 2(1) situated in its territory to recognise and accept, in accordance with the provisions laid down in Article 14, the outcome of the customer due diligence requirements laid down in Article 8(1)(a) to (c), carried out in accordance with this Directive by an institution referred to in Article 2(1)(1) or (2) in another Member State, with the exception of currency exchange offices and money transmission or remittance offices, and meeting the requirements laid down in Articles 16 and 18, even if the documents or data on which these requirements have been based are different to those required in the Member State to which the customer is being referred.
2. Where a Member State permits currency exchange offices and money transmission or remittance offices referred to in Article 3(2)(a) situated in its territory to be relied on as a third party domestically, that Member State shall in any case permit them to recognise and accept, in accordance with Article 14, the outcome of the customer due diligence requirements laid down in Article 8(1)(a) to (c), carried out in accordance with this Directive by the same category of institution in another Member State and meeting the requirements laid down in Articles 16 and 18, even if the documents or data on which these requirements have been based are different to those required in the Member State to which the customer is being referred.
3. Where a Member State permits persons referred to in Article 2(1)(3)(a) to (c) situated in its territory to be relied on as a third party domestically, that Member State shall in any case permit them to recognise and accept, in accordance with Article 14, the outcome of the customer due diligence requirements laid down in Article 8(1)(a) to (c), carried out in accordance with this Directive by a person referred to in Article 2(1)(3)(a) to (c) in another Member State and meeting the requirements laid down in Articles 16 and 18, even if the documents or data on which these requirements have been based are different to those required in the Member State to which the customer is being referred.
Article 16
1. For the purposes of this Section, ‘third parties’ shall mean institutions and persons who are listed in Article 2, or equivalent institutions and persons situated in a third country, who meet the following requirements:
(a)
they are subject to mandatory professional registration, recognised by law;
(b)
they apply customer due diligence requirements and record keeping requirements as laid down or equivalent to those laid down in this Directive and their compliance with the requirements of this Directive is supervised in accordance with Section 2 of Chapter V, or they are situated in a third country which imposes equivalent requirements to those laid down in this Directive.
2. Member States shall inform each other and the Commission of cases where they consider that a third country meets the conditions laid down in paragraph 1(b).
Article 17
Where the Commission adopts a decision pursuant to Article 40(4), Member States shall prohibit the institutions and persons covered by this Directive from relying on third parties from the third country concerned to meet the requirements laid down in Article 8(1)(a) to (c).
Article 18
1. Third parties shall make information requested in accordance with the requirements laid down in Article 8(1)(a) to (c) immediately available to the institution or person covered by this Directive to which the customer is being referred.
2. Relevant copies of identification and verification data and other relevant documentation on the identity of the customer or the beneficial owner shall immediately be forwarded, on request, by the third party to the institution or person covered by this Directive to which the customer is being referred.
Article 19
This Section shall not apply to outsourcing or agency relationships where, on the basis of a contractual arrangement, the outsourcing service provider or agent is to be regarded as part of the institution or person covered by this Directive.
CHAPTER III
REPORTING OBLIGATIONS
SECTION 1
General provisions
Article 20
Member States shall require that the institutions and persons covered by this Directive pay special attention to any activity which they regard as particularly likely, by its nature, to be related to money laundering or terrorist financing and in particular complex or unusually large transactions and all unusual patterns of transactions which have no apparent economic or visible lawful purpose.
Article 21
1. Each Member State shall establish a FIU in order effectively to combat money laundering and terrorist financing.
2. That FIU shall be established as a central national unit. It shall be responsible for receiving (and to the extent permitted, requesting), analysing and disseminating to the competent authorities, disclosures of information which concern potential money laundering, potential terrorist financing or are required by national legislation or regulation. It shall be provided with adequate resources in order to fulfil its tasks.
3. Member States shall ensure that the FIU has access, directly or indirectly, on a timely basis, to the financial, administrative and law enforcement information that it requires to properly fulfil its tasks.
Article 22
1. Member States shall require the institutions and persons covered by this Directive, and where applicable their directors and employees, to cooperate fully:
(a)
by promptly informing the FIU, on their own initiative, where the institution or person covered by this Directive knows, suspects or has reasonable grounds to suspect that money laundering or terrorist financing is being or has been committed or attempted;
(b)
by promptly furnishing the FIU, at its request, with all necessary information, in accordance with the procedures established by the applicable legislation.
2. The information referred to in paragraph 1 shall be forwarded to the FIU of the Member State in whose territory the institution or person forwarding the information is situated. The person or persons designated in accordance with the procedures provided for in Article 34 shall normally forward the information.
Article 23
1. By way of derogation from Article 22(1), Member States may, in the case of the persons referred to in Article 2(1)(3)(a) and (b), designate an appropriate self-regulatory body of the profession concerned as the authority to be informed in the first instance in place of the FIU. Without prejudice to paragraph 2, the designated self-regulatory body shall in such cases forward the information to the FIU promptly and unfiltered.
2. Member States shall not be obliged to apply the obligations laid down in Article 22(1) to notaries, independent legal professionals, auditors, external accountants and tax advisors with regard to information they receive from or obtain on one of their clients, in the course of ascertaining the legal position for their client or performing their task of defending or representing that client in, or concerning judicial proceedings, including advice on instituting or avoiding proceedings, whether such information is received or obtained before, during or after such proceedings.
Article 24
1. Member States shall require the institutions and persons covered by this Directive to refrain from carrying out transactions which they know or suspect to be related to money laundering or terrorist financing until they have completed the necessary action in accordance with Article 22(1)(a). In conformity with the legislation of the Member States, instructions may be given not to carry out the transaction.
2. Where such a transaction is suspected of giving rise to money laundering or terrorist financing and where to refrain in such manner is impossible or is likely to frustrate efforts to pursue the beneficiaries of a suspected money laundering or terrorist financing operation, the institutions and persons concerned shall inform the FIU immediately afterwards.
Article 25
1. Member States shall ensure that if, in the course of inspections carried out in the institutions and persons covered by this Directive by the competent authorities referred to in Article 37, or in any other way, those authorities discover facts that could be related to money laundering or terrorist financing, they shall promptly inform the FIU.
2. Member States shall ensure that supervisory bodies empowered by law or regulation to oversee the stock, foreign exchange and financial derivatives markets inform the FIU if they discover facts that could be related to money laundering or terrorist financing.
Article 26
The disclosure in good faith as foreseen in Articles 22(1) and 23 by an institution or person covered by this Directive or by an employee or director of such an institution or person of the information referred to in Articles 22 and 23 shall not constitute a breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision, and shall not involve the institution or person or its directors or employees in liability of any kind.
Article 27
Member States shall take all appropriate measures in order to protect employees of the institutions or persons covered by this Directive who report suspicions of money laundering or terrorist financing either internally or to the FIU from being exposed to threats or hostile action.
SECTION 2
Prohibition of disclosure
Article 28
1. The institutions and persons covered by this Directive and their directors and employees shall not disclose to the customer concerned or to other third persons the fact that information has been transmitted in accordance with Articles 22 and 23 or that a money laundering or terrorist financing investigation is being or may be carried out.
2. The prohibition laid down in paragraph 1 shall not include disclosure to the competent authorities referred to in Article 37, including the self-regulatory bodies, or disclosure for law enforcement purposes.
3. The prohibition laid down in paragraph 1 shall not prevent disclosure between institutions from Member States, or from third countries provided that they meet the conditions laid down in Article 11(1), belonging to the same group as defined by Article 2(12) of Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate (17).
4. The prohibition laid down in paragraph 1 shall not prevent disclosure between persons referred to in Article 2(1)(3)(a) and (b) from Member States, or from third countries which impose requirements equivalent to those laid down in this Directive, who perform their professional activities, whether as employees or not, within the same legal person or a network. For the purposes of this Article, a ‘network’ means the larger structure to which the person belongs and which shares common ownership, management or compliance control.
5. For institutions or persons referred to in Article 2(1)(1), (2) and (3)(a) and (b) in cases related to the same customer and the same transaction involving two or more institutions or persons, the prohibition laid down in paragraph 1 shall not prevent disclosure between the relevant institutions or persons provided that they are situated in a Member State, or in a third country which imposes requirements equivalent to those laid down in this Directive, and that they are from the same professional category and are subject to equivalent obligations as regards professional secrecy and personal data protection. The information exchanged shall be used exclusively for the purposes of the prevention of money laundering and terrorist financing.
6. Where the persons referred to in Article 2(1)(3)(a) and (b) seek to dissuade a client from engaging in illegal activity, this shall not constitute a disclosure within the meaning of the paragraph 1.
7. The Member States shall inform each other and the Commission of cases where they consider that a third country meets the conditions laid down in paragraphs 3, 4 or 5.
Article 29
Where the Commission adopts a decision pursuant to Article 40(4), the Member States shall prohibit the disclosure between institutions and persons covered by this Directive and institutions and persons from the third country concerned.
CHAPTER IV
RECORD KEEPING AND STATISTICAL DATA
Article 30
Member States shall require the institutions and persons covered by this Directive to keep the following documents and information for use in any investigation into, or analysis of, possible money laundering or terrorist financing by the FIU or by other competent authorities in accordance with national law:
(a)
in the case of the customer due diligence, a copy or the references of the evidence required, for a period of at least five years after the business relationship with their customer has ended;
(b)
in the case of business relationships and transactions, the supporting evidence and records, consisting of the original documents or copies admissible in court proceedings under the applicable national legislation for a period of at least five years following the carrying-out of the transactions or the end of the business relationship.
Article 31
1. Member States shall require the credit and financial institutions covered by this Directive to apply, where applicable, in their branches and majority-owned subsidiaries located in third countries measures at least equivalent to those laid down in this Directive with regard to customer due diligence and record keeping.
Where the legislation of the third country does not permit application of such equivalent measures, the Member States shall require the credit and financial institutions concerned to inform the competent authorities of the relevant home Member State accordingly.
2. Member States and the Commission shall inform each other of cases where the legislation of the third country does not permit application of the measures required under the first subparagraph of paragraph 1 and coordinated action could be taken to pursue a solution.
3. Member States shall require that, where the legislation of the third country does not permit application of the measures required under the first subparagraph of paragraph 1, credit or financial institutions take additional measures to effectively handle the risk of money laundering or terrorist financing.
Article 32
Member States shall require that their credit and financial institutions have systems in place that enable them to respond fully and rapidly to enquiries from the FIU, or from other authorities, in accordance with their national law, as to whether they maintain or have maintained during the previous five years a business relationship with specified natural or legal persons and on the nature of that relationship.
Article 33
1. Member States shall ensure that they are able to review the effectiveness of their systems to combat money laundering or terrorist financing by maintaining comprehensive statistics on matters relevant to the effectiveness of such systems.
2. Such statistics shall as a minimum cover the number of suspicious transaction reports made to the FIU, the follow-up given to these reports and indicate on an annual basis the number of cases investigated, the number of persons prosecuted, the number of persons convicted for money laundering or terrorist financing offences and how much property has been frozen, seized or confiscated.
3. Member States shall ensure that a consolidated review of these statistical reports is published.
CHAPTER V
ENFORCEMENT MEASURES
SECTION 1
Internal procedures, training and feedback
Article 34
1. Member States shall require that the institutions and persons covered by this Directive establish adequate and appropriate policies and procedures of customer due diligence, reporting, record keeping, internal control, risk assessment, risk management, compliance management and communication in order to forestall and prevent operations related to money laundering or terrorist financing.
2. Member States shall require that credit and financial institutions covered by this Directive communicate relevant policies and procedures where applicable to branches and majority-owned subsidiaries in third countries.
Article 35
1. Member States shall require that the institutions and persons covered by this Directive take appropriate measures so that their relevant employees are aware of the provisions in force on the basis of this Directive.
These measures shall include participation of their relevant employees in special ongoing training programmes to help them recognise operations which may be related to money laundering or terrorist financing and to instruct them as to how to proceed in such cases.
Where a natural person falling within any of the categories listed in Article 2(1)(3) performs his professional activities as an employee of a legal person, the obligations in this Section shall apply to that legal person rather than to the natural person.
2. Member States shall ensure that the institutions and persons covered by this Directive have access to up-to-date information on the practices of money launderers and terrorist financers and on indications leading to the recognition of suspicious transactions.
3. Member States shall ensure that, wherever practicable, timely feedback on the effectiveness of and follow-up to reports of suspected money laundering or terrorist financing is provided.
SECTION 2
Supervision
Article 36
1. Member States shall provide that currency exchange offices and trust and company service providers shall be licensed or registered and casinos be licensed in order to operate their business legally. Without prejudice to future Community legislation, Member States shall provide that money transmission or remittance offices shall be licensed or registered in order to operate their business legally.
2. Member States shall require competent authorities to refuse licensing or registration of the entities referred to in paragraph 1 if they are not satisfied that the persons who effectively direct or will direct the business of such entities or the beneficial owners of such entities are fit and proper persons.
Article 37
1. Member States shall require the competent authorities at least to effectively monitor and to take the necessary measures with a view to ensuring compliance with the requirements of this Directive by all the institutions and persons covered by this Directive.
2. Member States shall ensure that the competent authorities have adequate powers, including the power to compel the production of any information that is relevant to monitoring compliance and perform checks, and have adequate resources to perform their functions.
3. In the case of credit and financial institutions and casinos, competent authorities shall have enhanced supervisory powers, notably the possibility to conduct on-site inspections.
4. In the case of the natural and legal persons referred to in Article 2(1)(3)(a) to (e), Member States may allow the functions referred to in paragraph 1 to be performed on a risk-sensitive basis.
5. In the case of the persons referred to in Article 2(1)(3)(a) and (b), Member States may allow the functions referred to in paragraph 1 to be performed by self-regulatory bodies, provided that they comply with paragraph 2.
SECTION 3
Cooperation
Article 38
The Commission shall lend such assistance as may be needed to facilitate coordination, including the exchange of information between FIUs within the Community.
SECTION 4
Penalties
Article 39
1. Member States shall ensure that natural and legal persons covered by this Directive can be held liable for infringements of the national provisions adopted pursuant to this Directive. The penalties must be effective, proportionate and dissuasive.
2. Without prejudice to the right of Member States to impose criminal penalties, Member States shall ensure, in conformity with their national law, that the appropriate administrative measures can be taken or administrative sanctions can be imposed against credit and financial institutions for infringements of the national provisions adopted pursuant to this Directive. Member States shall ensure that these measures or sanctions are effective, proportionate and dissuasive.
3. In the case of legal persons, Member States shall ensure that at least they can be held liable for infringements referred to in paragraph 1 which are committed for their benefit by any person, acting either individually or as part of an organ of the legal person, who has a leading position within the legal person, based on:
(a)
a power of representation of the legal person;
(b)
an authority to take decisions on behalf of the legal person, or
(c)
an authority to exercise control within the legal person.
4. In addition to the cases already provided for in paragraph 3, Member States shall ensure that legal persons can be held liable where the lack of supervision or control by a person referred to in paragraph 3 has made possible the commission of the infringements referred to in paragraph 1 for the benefit of a legal person by a person under its authority.
CHAPTER VI
IMPLEMENTING MEASURES
Article 40
1. In order to take account of technical developments in the fight against money laundering or terrorist financing and to ensure uniform implementation of this Directive, the Commission may, in accordance with the procedure referred to in Article 41(2), adopt the following implementing measures:
(a)
clarification of the technical aspects of the definitions in Article 3(2)(a) and (d), (6), (7), (8), (9) and (10);
(b)
establishment of technical criteria for assessing whether situations represent a low risk of money laundering or terrorist financing as referred to in Article 11(2) and (5);
(c)
establishment of technical criteria for assessing whether situations represent a high risk of money laundering or terrorist financing as referred to in Article 13;
(d)
establishment of technical criteria for assessing whether, in accordance with Article 2(2), it is justified not to apply this Directive to certain legal or natural persons carrying out a financial activity on an occasional or very limited basis.
2. In any event, the Commission shall adopt the first implementing measures to give effect to paragraphs 1(b) and 1(d) by 15 June 2006.
3. The Commission shall, in accordance with the procedure referred to in Article 41(2), adapt the amounts referred to in Articles 2(1)(3)(e), 7(b), 10(1) and 11(5)(a) and (d) taking into account Community legislation, economic developments and changes in international standards.
4. Where the Commission finds that a third country does not meet the conditions laid down in Article 11(1) or (2), Article 28(3), (4) or (5), or in the measures established in accordance with paragraph 1(b) of this Article or in Article 16(1)(b), or that the legislation of that third country does not permit application of the measures required under the first subparagraph of Article 31(1), it shall adopt a decision so stating in accordance with the procedure referred to in Article 41(2).
Article 41
1. The Commission shall be assisted by a Committee on the Prevention of Money Laundering and Terrorist Financing, hereinafter ‘the Committee’.
2. Where reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof and provided that the implementing measures adopted in accordance with this procedure do not modify the essential provisions of this Directive.
The period laid down in Article 5(6) of Decision 1999/468/EC shall be set at three months.
3. The Committee shall adopt its Rules of Procedure.
4. Without prejudice to the implementing measures already adopted, the implementation of the provisions of this Directive concerning the adoption of technical rules and decisions in accordance with the procedure referred to in paragraph 2 shall be suspended four years after the entry into force of this Directive. On a proposal from the Commission, the European Parliament and the Council may renew the provisions concerned in accordance with the procedure laid down in Article 251 of the Treaty and, to that end, shall review them prior to the expiry of the four-year period.
CHAPTER VII
FINAL PROVISIONS
Article 42
By 15 December 2009, and at least at three-yearly intervals thereafter, the Commission shall draw up a report on the implementation of this Directive and submit it to the European Parliament and the Council. For the first such report, the Commission shall include a specific examination of the treatment of lawyers and other independent legal professionals.
Article 43
By 15 December 2010, the Commission shall present a report to the European Parliament and to the Council on the threshold percentages in Article 3(6), paying particular attention to the possible expediency and consequences of a reduction of the percentage in points (a)(i), (b)(i) and (b)(iii) of Article 3(6) from 25 % to 20 %. On the basis of the report the Commission may submit a proposal for amendments to this Directive.
Article 44
Directive 91/308/EEC is hereby repealed.
References made to the repealed Directive shall be construed as being made to this Directive and should be read in accordance with the correlation table set out in the Annex.
Article 45
1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 15 December 2007. They shall forthwith communicate to the Commission the text of those provisions together with a table showing how the provisions of this Directive correspond to the national provisions adopted.
When Member States adopt those measures, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.
2. Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.
Article 46
This Directive shall enter into force on the 20th day after its publication in the Official Journal of the European Union.
Article 47
This Directive is addressed to the Member States.
Done at Strasbourg, 26 October 2005.
For the European Parliament
The President
J. BORRELL FONTELLES
For the Council
The President
D. ALEXANDER
(1) Opinion delivered on 11 May 2005 (not yet published in the Official Journal).
(2) OJ C 40, 17.2.2005, p. 9.
(3) Opinion of the European Parliament of 26 May 2005 (not yet published in the Official Journal) and Council Decision of 19 September 2005.
(4) OJ L 166, 28.6.1991, p. 77. Directive as amended by Directive 2001/97/EC of the European Parliament and of the Council (OJ L 344, 28.12.2001, p. 76).
(5) OJ L 182, 5.7.2001, p. 1.
(6) OJ L 281, 23.11.1995, p. 31. Directive as amended by Regulation (EC) No 1882/2003 (OJ L 284, 31.10.2003, p. 1).
(7) OJ L 271, 24.10.2000, p. 4.
(8) OJ L 184, 17.7.1999, p. 23.
(9) OJ L 164, 22.6.2002, p. 3.
(10) OJ L 126, 26.5.2000, p. 1. Directive as last amended by Directive 2005/1/EC (OJ L 79, 24.3.2005, p. 9).
(11) OJ L 345, 19.12.2002, p. 1. Directive as last amended by Directive 2005/1/EC.
(12) OJ L 145, 30.4.2004, p. 1.
(13) OJ L 9, 15.1.2003, p. 3.
(14) OJ L 351, 29.12.1998, p. 1.
(15) OJ C 316, 27.11.1995, p. 49.
(16) OJ L 275, 27.10.2000, p. 39.
(17) OJ L 35, 11.2.2003, p. 1.
ANNEX
CORRELATION TABLE
This Directive
Directive 91/308/EEC
Article 1(1)
Article 2
Article 1(2)
Article 1(C)
Article 1(2)(a)
Article 1(C) first point
Article 1(2)(b)
Article 1(C) second point
Article 1(2)(c)
Article 1(C) third point
Article 1(2)(d)
Article 1(C) fourth point
Article 1(3)
Article 1(C), third paragraph
Article 1(4)

Article 1(5)
Article 1(C), second paragraph
Article 2(1)(1)
Article 2a(1)
Article 2(1)(2)
Article 2a(2)
Article 2(1)(3)(a), (b) and (d) to (f)
Article 2a(3) to (7)
Article 2(1)(3)(c)

Article 2(2)

Article 3(1)
Article 1(A)
Article 3(2)(a)
Article 1(B)(1)
Article 3(2)(b)
Article 1(B)(2)
Article 3(2)(c)
Article 1(B)(3)
Article 3(2)(d)
Article 1(B)(4)
Article 3(2)(e)

Article 3(2)(f)
Article 1(B), second paragraph
Article 3(3)
Article 1(D)
Article 3(4)
Article 1(E), first paragraph
Article 3(5)
Article 1(E), second paragraph
Article 3(5)(a)

Article 3(5)(b)
Article 1(E), first indent
Article 3(5)(c)
Article 1(E), second indent
Article 3(5)(d)
Article 1(E), third indent
Article 3(5)(e)
Article 1(E), fourth indent
Article 3(5)(f)
Article 1(E), fifth indent, and third paragraph
Article 3(6)

Article 3(7)

Article 3(8)

Article 3(9)

Article 3(10)

Article 4
Article 12
Article 5
Article 15
Article 6

Article 7(a)
Article 3(1)
Article 7(b)
Article 3(2)
Article 7(c)
Article 3(8)
Article 7(d)
Article 3(7)
Article 8(1)(a)
Article 3(1)
Article 8(1)(b) to (d)

Article 8(2)

Article 9(1)
Article 3(1)
Article 9(2) to (6)

Article 10
Article 3(5) and (6)
Article 11(1)
Article 3(9)
Article 11(2)

Article 11(3) and (4)

Article 11(5)(a)
Article 3(3)
Article 11(5)(b)
Article 3(4)
Article 11(5)(c)
Article 3(4)
Article 11(5)(d)

Article 12

Article 13(1) and (2)
Article 3(10) and (11)
Article 13(3) to (5)

Article 13(6)
Article 5
Article 14

Article 15

Article 16

Article 17

Article 18

Article 19

Article 20
Article 5
Article 21

Article 22
Article 6(1) and (2)
Article 23
Article 6(3)
Article 24
Article 7
Article 25
Article 10
Article 26
Article 9
Article 27

Article 28(1)
Article 8(1)
Article 28(2) to (7)

Article 29

Article 30(a)
Article 4, first indent
Article 30(b)
Article 4, second indent
Article 31

Article 32

Article 33

Article 34(1)
Article 11(1) (a)
Article 34(2)

Article 35(1), first paragraph
Article 11(1)(b), first sentence
Article 35(1), second paragraph
Article 11(1)(b) second sentence
Article 35(1), third paragraph
Article 11(1), second paragraph
Article 35(2)

Article 35(3)

Article 36

Article 37

Article 38

Article 39(1)
Article 14
Article 39(2) to (4)

Article 40

Article 41

Article 42
Article 17
Article 43

Article 44

Article 45
Article 16
Article 46
Article 16

DirectiveEC2000/0046

_ADDRESS.WPG:
* http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32000L0046,

32000L0046

Directive 2000/46/EC of the European Parliament and of the Council of 18 September 2000 on the taking up, pursuit of and prudential supervision of the business of electronic money institutions

Official Journal L 275 , 27/10/2000 P. 0039 - 0043



Directive 2000/46/EC of the European Parliament and of the Council

of 18 September 2000

on the taking up, pursuit of and prudential supervision of the business of electronic money institutions

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular the first and third sentences of Article 47(2) thereof,

Having regard to the proposal from the Commission(1),

Having regard to the opinion of the Economic and Social Committee(2),

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

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

Whereas:

(1) Credit institutions within the meaning of Article 1, point 1, first subparagraph (b) of Directive 2000/12/EC(5) are limited in the scope of their activities.

(2) It is necessary to take account of the specific characteristics of these institutions and to provide the appropriate measures necessary to coordinate and harmonise Member States' laws, regulations and administrative provisions relating to the taking up, pursuit and prudential supervision of the business of electronic money institutions.

(3) For the purposes of this Directive, electronic money can be considered an electronic surrogate for coins and banknotes, which is stored on an electronic device such as a chip card or computer memory and which is generally intended for the purpose of effecting electronic payments of limited amounts.

(4) The approach adopted is appropriate to achieve only the essential harmonisation necessary and sufficient to secure the mutual recognition of authorisation and prudential supervision of electronic money institutions, making possible the granting of a single licence recognised throughout the Community and designed to ensure bearer confidence and the application of the principle of home Member State prudential supervision.

(5) Within the wider context of the rapidly evolving electronic commerce it is desirable to provide a regulatory framework that assists electronic money in delivering its full potential benefits and that avoids hampering technological innovation in particular. Therefore, this Directive introduces a technology-neutral legal framework that harmonises the prudential supervision of electronic money institutions to the extent necessary for ensuring their sound and prudent operation and their financial integrity in particular.

(6) Credit institutions, by virtue of point 5 of Annex I to Directive 2000/12/EC, are already allowed to issue and administer means of payment including electronic money and to carry on such activities Community-wide subject to mutual recognition and to the comprehensive prudential supervisory system applying to them in accordance with the European banking Directives.

(7) The introduction of a separate prudential supervisory regime for electronic money institutions, which, although calibrated on the prudential supervisory regime applying to other credit institutions and Directive 2000/12/EC except Title V, Chapters 2 and 3 thereof in particular, differs from that regime, is justified and desirable because the issuance of electronic money does not constitute in itself, in view of its specific character as an electronic surrogate for coins and banknotes, a deposit-taking activity pursuant to Article 3 of Directive 2000/12/EC, if the received funds are immediately exchanged for electronic money.

(8) The receipt of funds from the public in exchange for electronic money, which results in a credit balance left on account with the issuing institution, constitutes the receipt of deposits or other repayable funds for the purpose of Directive 2000/12/EC.

(9) It is necessary for electronic money to be redeemable to ensure bearer confidence. Redeemability does not imply, in itself, that the funds received in exchange for electronic money shall be regarded as deposits or other repayable funds for the purpose of Directive 2000/12/EC.

(10) Redeemability should always be understood to be at par value.

(11) In order to respond to the specific risks associated with the issuance of electronic money this prudential supervisory regime must be more targeted and, accordingly, less cumbersome than the prudential supervisory regime applying to credit institutions, notably as regards reduced initial capital requirements and the non-application of Directive 93/6/EEC(6) and Title V, Chapter 2, Sections II and III of Directive 2000/12/EC.

(12) However, it is necessary to preserve a level playing field between electronic money institutions and other credit institutions issuing electronic money and, thus, to ensure fair competition among a wider range of institutions to the benefit of bearers. This is achieved since the abovementioned less cumbersome features of the prudential supervisory regime applying to electronic money institutions are balanced by provisions that are more stringent than those applying to other credit institutions, notably as regards restrictions on the business activities which electronic money institutions may carry on and, particularly, prudent limitations of their investments aimed at ensuring that their financial liabilities related to outstanding electronic money are backed at all times by sufficiently liquid low risk assets.

(13) Pending the harmonisation of prudential supervision of outsourced activities for credit institutions it is appropriate that electronic money institutions have sound and prudent management and control procedures. With a view to the possibility of operational and other ancilliary functions related to the issuance of electronic money being performed by undertakings which are not subject to prudential supervision it is essential that electronic money institutions have in place internal structures which should respond to the financial and non-financial risks to which they are exposed.

(14) The issuance of electronic money may affect the stability of the financial system and the smooth operation of payments systems. Close cooperation in assessing the integrity of electronic money schemes is called for.

(15) It is appropriate to afford competent authorities the possibility of waiving some or all of the requirements imposed by this Directive for electronic money institutions which operate only within the territories of the respective Member States.

(16) Adoption of this Directive constitutes the most appropriate means of achieving the desired objectives. This Directive is limited to the minimum necessary to achieve these objectives and does not go beyond what is necessary for this purpose.

(17) Provision should be made for the review of this Directive in the light of experience of developments in the market and the protection of bearers of electronic money.

(18) The Banking Advisory Committee has been consulted on the adoption of this Directive,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Scope, definitions and restriction of activities

1. This Directive shall apply to electronic money institutions.

2. It shall not apply to the institutions referred to in Article 2(3) of Directive 2000/12/EC.

3. For the purposes of this Directive:

(a) "electronic money institution" shall mean an undertaking or any other legal person, other than a credit institution as defined in Article 1, point 1, first subparagraph (a) of Directive 2000/12/EC which issues means of payment in the form of electronic money;

(b) "electronic money" shall mean monetary value as represented by a claim on the issuer which is:

(i) stored on an electronic device;

(ii) issued on receipt of funds of an amount not less in value than the monetary value issued;

(iii) accepted as means of payment by undertakings other than the issuer.

4. Member States shall prohibit persons or undertakings that are not credit institutions, as defined in Article 1, point 1, first subparagraph of Directive 2000/12/EC, from carrying on the business of issuing electronic money.

5. The business activities of electronic money institutions other than the issuing of electronic money shall be restricted to:

(a) the provision of closely related financial and non-financial services such as the administering of electronic money by the performance of operational and other ancillary functions related to its issuance, and the issuing and administering of other means of payment but excluding the granting of any form of credit; and

(b) the storing of data on the electronic device on behalf of other undertakings or public institutions.

Electronic money institutions shall not have any holdings in other undertakings except where these undertakings perform operational or other ancillary functions related to electronic money issued or distributed by the institution concerned.

Article 2

Application of Banking Directives

1. Save where otherwise expressly provided for, only references to credit institutions in Directive 91/308/EEC(7) and Directive 2000/12/EC except Title V, Chapter 2 thereof shall apply to electronic money institutions.

2. Articles 5, 11, 13, 19, 20(7), 51 and 59 of Directive 2000/12/EC shall not apply. The mutual recognition arrangements provided for in Directive 2000/12/EC shall not apply to electronic money institutions' business activities other than the issuance of electronic money.

3. The receipt of funds within the meaning of Article 1(3)(b)(ii) does not constitute a deposit or other repayable funds according to Article 3 of Directive 2000/12/EC, if the funds received are immediately exchanged for electronic money.

Article 3

Redeemability

1. A bearer of electronic money may, during the period of validity, ask the issuer to redeem it at par value in coins and bank notes or by a transfer to an account free of charges other than those strictly necessary to carry out that operation.

2. The contract between the issuer and the bearer shall clearly state the conditions of redemption.

3. The contract may stipulate a minimum threshold for redemption. The threshold may not exceed EUR 10.

Article 4

Initial capital and ongoing own funds requirements

1. Electronic money institutions shall have an initial capital, as defined in Article 34(2), subparagraphs (1) and (2) of Directive 2000/12/EC, of not less than EUR 1 million. Notwithstanding paragraphs 2 and 3, their own funds, as defined in Directive 2000/12/EC, shall not fall below that amount.

2. Electronic money institutions shall have at all times own funds which are equal to or above 2 % of the higher of the current amount or the average of the preceding six months' total amount of their financial liabilities related to outstanding electronic money.

3. Where an electronic money institution has not completed a six months' period of business, including the day it starts up, it shall have own funds which are equal to or above 2 % of the higher of the current amount or the six months' target total amount of its financial liabilities related to outstanding electronic money. The six months' target total amount of the institution's financial liabilities related to outstanding electronic money shall be evidenced by its business plan subject to any adjustment to that plan having been required by the competent authorities.

Article 5

Limitations of investments

1. Electronic money institutions shall have investments of an amount of no less than their financial liabilities related to outstanding electronic money in the following assets only:

(a) asset items which according to Article 43(1)(a) (1), (2), (3) and (4) and Article 44(1) of Directive 2000/12/EC attract a zero credit risk weighting and which are sufficiently liquid;

(b) sight deposits held with Zone A credit institutions as defined in Directive 2000/12/EC; and

(c) debt instruments which are:

(i) sufficiently liquid;

(ii) not covered by paragraph 1(a);

(iii) recognised by competent authorities as qualifying items within the meaning of Article 2(12) of Directive 93/6/EEC; and

(iv) issued by undertakings other than undertakings which have a qualifying holding, as defined in Article 1 of Directive 2000/12/EC, in the electronic money institution concerned or which must be included in those undertakings' consolidated accounts.

2. Investments referred to in paragraph 1(b) and (c) may not exceed 20 times the own funds of the electronic money institution concerned and shall be subject to limitations which are at least as stringent as those applying to credit institutions in accordance with Title V, Chapter 2, Section III of Directive 2000/12/EC.

3. For the purpose of hedging market risks arising from the issuance of electronic money and from the investments referred to in paragraph 1, electronic money institutions may use sufficiently liquid interest-rate and foreign-exchange-related off balance-sheet items in the form of exchange-traded (i.e. not OTC) derivative instruments where they are subject to daily margin requirements or foreign exchange contracts with an original maturity of 14 calendar days or less. The use of derivative instruments according to the first sentence is permissible only if the full elimination of market risks is intended and, to the extent possible, achieved.

4. Member States shall impose appropriate limitations on the market risks electronic money institutions may incur from the investments referred to in paragraph 1.

5. For the purpose of applying paragraph 1, assets shall be valued at the lower of cost or market value.

6. If the value of the assets referred to in paragraph 1 falls below the amount of financial liabilities related to outstanding electronic money, the competent authorities shall ensure that the electronic money institution in question takes appropriate measures to remedy that situation promptly. To this end, and for a temporary period only, the competent authorities may allow the institution's financial liabilities related to outstanding electronic money to be backed by assets other than those referred to in paragraph 1 up to an amount not exceeding the lower of 5 % of these liabilities or the institution's total amount of own funds.

Article 6

Verification of specific requirements by the competent authorities

The competent authorities shall ensure that the calculations justifying compliance with Articles 4 and 5 are made, not less than twice each year, either by electronic money institutions themselves, which shall communicate them, and any component data required, to the competent authorities, or by competent authorities, using data supplied by the electronic money institutions.

Article 7

Sound and prudent operation

Electronic money institutions shall have sound and prudent management, administrative and accounting procedures and adequate internal control mechanisms. These should respond to the financial and non-financial risks to which the institution is exposed including technical and procedural risks as well as risks connected to its cooperation with any undertaking performing operational or other ancillary functions related to its business activities.

Article 8

Waiver

1. Member States may allow their competent authorities to waive the application of some or all of the provisions of this Directive and the application of Directive 2000/12/EC to electronic money institutions in cases where either:

(a) the total business activities of the type referred to in Article 1(3)(a) of this Directive of the institution generate a total amount of financial liabilities related to outstanding electronic money that normally does not exceed EUR 5 million and never exceeds EUR 6 million; or

(b) the electronic money issued by the institution is accepted as a means of payment only by any subsidiaries of the institution which perform operational or other ancillary functions related to electronic money issued or distributed by the institution, any parent undertaking of the institution or any other subsidiaries of that parent undertaking; or

(c) electronic money issued by the institution is accepted as payment only by a limited number of undertakings, which can be clearly distinguished by:

(i) their location in the same premises or other limited local area; or

(ii) their close financial or business relationship with the issuing institution, such as a common marketing or distribution scheme.

The underlying contractual arrangements must provide that the electronic storage device at the disposal of bearers for the purpose of making payments is subject to a maximum storage amount of not more than EUR 150.

2. An electronic money institution for which a waiver has been granted under paragraph 1 shall not benefit from the mutual recognition arrangements provided for in Directive 2000/12/EC.

3. Member States shall require that all electronic money institutions to which the application of this Directive and Directive 2000/12/EC has been waived report periodically on their activities including the total amount of financial liabilities related to electronic money.

Article 9

Grandfathering

Electronic money institutions subject to this Directive which have commenced their activity in accordance with the provisions in force in the Member State in which they have their head office before the date of entry into force of the provisions adopted in implementation of this Directive or the date referred to in Article 10(1), whichever date is earlier, shall be presumed to be authorised. The Member States shall oblige such electronic money institutions to submit all relevant information to the competent authorities in order to allow them to assess within six months from the date of entry into force of the provisions adopted in implementation of this Directive, whether the institutions comply with the requirements pursuant to this Directive, which measures need to be taken in order to ensure compliance, or whether a withdrawal of authorisation is appropriate. If compliance is not ensured within six months from the date referred to in Article 10(1), the electronic money institution shall not benefit from mutual recognition after that time.

Article 10

Implementation

1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive not later than 27 April 2002. They shall immediately inform the Commission thereof.

When Member States adopt these measures, they shall contain a reference to this Directive or shall be accompanied by such reference on the occasion of their official publication. The methods of making such a reference shall be laid down by the Member States.

2. Member States shall communicate to the Commission the text of the main provisions of national law, which they adopt in the field covered by this Directive.

Article 11

Review

Not later than 27 April 2005 the Commission shall present a report to the European Parliament and the Council on the application of this Directive, in particular on:

- the measures to protect the bearers of electronic money, including the possible need to introduce a guarantee scheme,

- capital requirements,

- waivers, and

- the possible need to prohibit interest being paid on funds received in exchange for electronic money,

accompanied where appropriate by a proposal for its revision.

Article 12

Entry into force

This Directive shall enter into force on the day of its publication in the Official Journal of the European Communities.

Article 13

This Directive is addressed to the Member States.

Done at Brussels, 18 September 2000.

For the European Parliament

The President

N. Fontaine

For the Council

The President

H. Vιdrine

(1) OJ C 317, 15.10.1998, p. 7.

(2) OJ C 101, 12.4.1999, p. 64.

(3) OJ C 189, 6.7.1999, p. 7.

(4) Opinion of the European Parliament of 15 April 1999 (OJ C 219, 30.7.1999, p. 415), confirmed on 27 October 1999, Council Common Position of 29 November 1999 (OJ C 26, 28.1.2000, p. 1) and Decision of the European Parliament of 11 April 2000 (not yet published in the Official Journal). Decision of the Council of 16 June 2000.

(5) Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions (OJ L 126, 26.5.2000, p. 1). Directive as last amended by Directive 2000/28/EC (see page 37 of this Official Journal).

(6) Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investment firms and credit institutions (OJ L 141, 11.6.1993, p. 1). Directive as last amended by Directive 98/33/EC (OJ L 204, 21.7.1998, p. 29).

(7) Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering (OJ L 166, 28.6.1991, p. 77).

mny'Material-Form

name::
* McsEngl.mny'Material-Form,

_DESCRIPTION:
The material-form of a moneyQuantity depends on the moneyUoM a society uses:
- if the moneyUoM is a special-commodity, then a moneyQuantity is any "amount" (=quantity) of this special-commodity.
- if the moneyUoM is a "representative" one, then a moneyQuantity is any quantity of banknotes, coins or just official-records containing moneyMeasures.
[hmnSngo.2011-05-19]

mny'Counterfeit

name::
* McsEngl.mny'Counterfeit,

sciMny'Numismatics

_CREATED: {2012-05-27}

name::
* McsEngl.sciMny'Numismatics,
* McsEngl.conceptEconomy541.115.48,
* McsEngl.numismatics@cptEconomy240.48, {2012-05-27}

_DESCRIPTION:
Numismatics is the study or collection of currency, including coins, tokens, paper money, and related objects. While numismatists are often characterized as students or collectors of coins, the discipline also includes the broader study of money and other payment media used to resolve debts and the exchange of goods. Early money used by people is referred to as "Odd and Curious", but the use of other goods in barter exchange is excluded, even where used as a circulating currency (e.g., cigarettes in prison). The Kyrgyz people used horses as the principal currency unit and gave small change in lambskins.[1] The lambskins may be suitable for numismatic study, but the horse is not. Many objects have been used for centuries, such as cowry shells, precious metals and gems.
Today, most transactions take place by a form of payment with either inherent, standardized or credit value. Numismatic value may be used to refer to the value in excess of the monetary value conferred by law. This is also known as the "collector value." For example, a collector may be willing to pay more than $2.00 for a United States two-dollar bill, given their low circulation.
Economic and historical studies of money's use and development are an integral part of the numismatists' study of money's physical embodiment.
[http://en.wikipedia.org/wiki/Numismatics]

sciMny'book.The-Philosophy-of-Money

name::
* McsEngl.sciMny'book.The-Philosophy-of-Money,
* McsEngl.book.The-Philosophy-of-Money,

_GENERIC:
* book#cptResource844#

_DESCRIPTION:
The Philosophy of Money (1907) is a book on economic sociology by the German sociologist and social philosopher, Georg Simmel.[1]

Probably considered Simmel's greatest work. Simmel saw money as a component of life that helped us understand the totality of life.[2]

[edit]Money and Value
Simmel believed people created value by making objects, then separating themselves from that object and then trying to overcome that distance. He found that things that were too close were not considered valuable and things that were too far for people to get were also not considered valuable. What was also considered in determining value was the scarcity, time, sacrifice, and difficulties involved in getting the object.

[edit]Negative Effects
As money and transactions increase, the value of the individual decreases and everything becomes about what the individual can do instead of who the individual is. Another negative effect of money is the effect it has on people’s beliefs. Everything boils down to dollars and cents instead of emotional value.
[http://en.wikipedia.org/wiki/The_Philosophy_of_Money]

sciMny'school

name::
* McsEngl.sciMny'school,

_SPECIFIC:
* chartalism#ql:mny'chartalism#
* circuitism#ql:circuitism@cptEconomy358.1#
* monetarism#cptEconomy581.35#
*

sciMny'school.CHARTALISM

name::
* McsEngl.sciMny'school.CHARTALISM,
* McsEngl.conceptEconomy680,
* McsEngl.chartalism@cptEconomy680,
* McsEngl.views.chartalism@cptEconomy680,
* McsEngl.MMT@cptEconomy680,
* McsEngl.mny'CHARTALISM,
* McsEngl.modern-monetary-theory@cptEconomy680,

_DESCRIPTION:
Chartalism is a descriptive economic theory which outlines the consequences of using government-issued tokens as the unit of money. The name derives from the Latin charta, in the sense of a token or ticket.[1] The modern theoretical body of work outlining chartalism and its consequences is also known as Modern Monetary Theory (MMT).
Chartalism aims to describe and analyse modern economies where the national currency is established and exclusively created by the government, and money is created through government spending. Taxation is employed to establish the fiat money as currency, through reclaiming part of the money.[2][3] The demand to hold and acquire this government-issued currency is driven by taxes levied by the state, which typically can only be paid in the state-issued fiat currency. Reclaiming the issued money, via taxation, is also essential to maintaining its value in exchange. Building upon this, Chartalism, especially through its modern proponents, then considers the effect this framework has on government, private, and foreign sectors.
The theory was developed by economist G.F. Knapp into the 1920s, with important contributions also by Alfred Mitchell-Innes. It was influential on the 1930 Treatise on Money of John Maynard Keynes[4], where Knapp and "Chartalism" are cited approvingly in its opening pages.[5] Chartalism experienced a revival under Abba P. Lerner,[6] and has a number of modern proponents, who are broadly denoted as post-Keynesian economists.
[http://en.wikipedia.org/wiki/Chartalism]

sciMny'school.CIRCUITISM

name::
* McsEngl.sciMny'school.CIRCUITISM,

_DESCRIPTION:
Circuitism was developed by French and Italian economists after World War II; it was officially presented by Augusto Graziani in (Graziani 1989), following an earlier outline in (Graziani 1984).[2]

The notion and terminology of a money circuit dates at least to 1903, when amateur economist Nicholas Johannsen wrote Der Kreislauf des Geldes und Mechanismus des Sozial-Lebens (The Circuit Theory of Money), under the pseudonym J.J.O. Lahn; (Graziani 2003). In the interwar period, German and Austrian economists studied monetary circuits, under the term Kreislauf, with the term "circuit" being introduced by French economists following this usage. The French circuitists stemmed from the works of Bernard Schmitt (Monnaie, Salaires et Profits, 1966).

Circuitism draws from Chartalism in a number of respects, notably emphasizing the fiat nature of (credit) money, and in distinguishing between government-created (exogenous) money and bank-created (endogenous) credit money.
[http://en.wikipedia.org/wiki/Circuitist]

sciMny'school.CREDIT-THEORY-OF-MONEY

_CREATED: {2012-12-17}

name::
* McsEngl.sciMny'school.CREDIT-THEORY-OF-MONEY,
* McsEngl.conceptEconomy541.115.75,
* McsEngl.credit-theory-of-money@cptEconomy541.115.75, {2012-12-17}
* McsEngl.debt-theory-of-money@cptEconomy541.115.75, {2012-12-18}

_SPECIFIC:
* endogenous_theory_of_money#cptEconomy541.115.76#

_DESCRIPTION:
Credit theories of money, also called Debt theories of money are concerned with the relationship between credit and money. Proponents of these theories, such as Alfred Mitchell-Innes, will sometimes emphasize that credit and debt are the same thing, seen from different points of view.[1] Proponents assert the essential nature of money is credit (debt), at least in eras where money is not backed by a commodity such as gold. Two common strands of thought within these theories are the idea that money originated as a unit of account for debt, and the position that money creation involves the simultaneous creation of money and debt. Some proponents of credit theories of money argue that money is best understood as debt even in systems often understood as using commodity money. Others hold that money equates to credit only in a system based on fiat money, where they argue that all forms of money including cash can be considered as forms of credit money.
The first formal Credit theory of money arose in the 19th century. Anthropologist David Graeber has argued that for most of human history, money has been widely understood to represent debt, though he concedes that even prior to the modern era, there have been several periods where rival theories like Metallism have held sway.
...
Relationship with other theories of money

Debt theories of money fall into a broader category of work which postulates that monetary creation is endogenous.[18]
In the forms commonly held by those to the left of the political spectrum, Debt theories have some overlap with Chartalism[19] and are opposed to Metallism and often to the Quantity theory of money. Conversely, in the forms held by those with a Libertarian or Conservative perspective, debt theories of money are often compatible with the Quantity theory, and with Metalism at least when the latter is broadly understood.[3][6][8][20]
[http://en.wikipedia.org/wiki/Credit_theory_of_money]

_ADDRESS.WPG:
* WHAT IS MONEY?
By A. MITCHELL INNES
From The Banking Law Journal, May 1913.
- http://www.ces.org.za/docs/what%20is%20money.htm,
* The Credit Theory of Money
By A. Mitchell Innes
From The Banking Law Journal, Vol. 31 (1914), Dec./Jan., Pages 151-168.
- http://www.ces.org.za/docs/The%20Credit%20Theoriy%20of%20Money.htm,

sciMny'school.ENDOGENOUS-THEORY

_CREATED: {2012-12-17}

name::
* McsEngl.sciMny'school.ENDOGENOUS-THEORY,
* McsEngl.conceptEconomy541.115.76,
* McsEngl.endogenous-theory-of-money@cptEconomy541.115.76, {2012-12-17}

_SPECIFIC:
* credit_theory_of_money#cptEconomy541.115.75#

sciMny'school.KEYNES#cptHuman85#

name::
* McsEngl.sciMny'school.KEYNES,

"...who considered money's decisive property to be precisely that of a store of value, i.e. its ability always to preserve ready purchasing power. On this point he disagreed with supporters of the quantity theory, who thought the function of medium of exchange decisive".
[Smirnov et al, 1984, 47#cptResource289#]

sciMny'school.METALLIC-THEORY-OF-MONEY

name::
* McsEngl.sciMny'school.METALLIC-THEORY-OF-MONEY,
* McsEngl.metallic-theory-of-money,
* McsEngl.metallism@cptEconomy, {2012-12-18}

_DESCRIPTION:
Metallism is a centuries old school of thought which holds that money derives its value from precious metals. In some older monetary system based on metallism, silver, gold or other metals are used as the primary forms of money. Coins made of officially recognised valuable metal will often be the legal tender.
Especially since the 19th century, adherents of metallism tend to accept that the relationship between money and precious metal can be indirect. In the gold standard adopted by much of the world in the late 19th and early 20th century, various paper bank notes could be exchanged for gold at banks.

]Contradistinctions
Metallism versus fiat monetary systems
Adherents of Metallism are opposed to the use of fiat money, i.e. governmentally-issued money with no intrinsic value.
Metallism versus Chartalism
Historically, the main rival school of though to metallism has been Chartalism, which holds that even in systems where coins are made of precious metals, money derives its value mainly from the authority of the State. Competition between these two alternative systems has existed for millennia, long before the concepts were formulised. And in some periods and regions hybrid monetary systems were used. As a set of principles governing the operation of monetary systems, chartalism existed for several millennia before it was formalised. For example, Constantina Katsari has argued that principles from both metallism and chartalism were reflected in the monetary system introduced by Augustus, which was used in the eastern provinces of the Roman Empire, from the early 1st century to the late 3rd century AD [1][2]
Monometallism versus bimetallism
A smaller disagreement which takes place relating to metallism is whether one metal should be used as currency (as in monometallism), or should there be two or more metals for that purpose (as in bimetallism).

History of metallic monetary systems
Historically, silver has been the main kind of money around the world, circulating bimetallically with gold. In many languages, the words for "money" and "silver" are identical. In the final era of global metal-based money, i.e. the first quarter of the 20th century, monometallic gold use has been the standard.

Broad sense of the term
In the broad sense of the term, which tends to be used only by scholars, metallism considers money to be a "creature of the market", a means to facilitate exchange of goods and services. In this broad sense, the essential nature of money is purchasing power, and it does not necessarily need to be backed by metals. Understood in this broad sense, metallism reflects the majority view among mainstream economists, which has prevailed since the early 19th century.[1]
[http://en.wikipedia.org/wiki/Metallism]
===
"The advocates of the first [metallic theory of money], the mercantilists, made an absolute of money's function as treasure and as world money, and on that basis identified it with the noble metals. They consequently made a fetish of the noble metals, which are not money by their nature and fulfil money functions only in certain historical conditions. There were recurrences of this theory in the form of `neometallism' in the 1950s and 1960s, when several economists -Jacques Rueff (France) and Michael Heilperin (USA)- advocated a return to the gold standard that existed before World War I. The `neometallists' did not understand that the system of gold exchange was historically limited by certain conditions of the development of capitalism, and that those conditions had already disappeared under state monopoly capitalism".
[Smirnov et al, 1984, 47#cptResource289#]

sciMny'school.MODERN-IDEAS

name::
* McsEngl.sciMny'school.MODERN-IDEAS,

"The rudiments of many modern ideas of money stem from theories that existed back in the seventeenth and eighteenth centuries. That applies primarily to the nominalist and quantity theories of money, whose development covered several centuries. The old theories of money, however, are now reappearing in a substantially modified form. Whereas Western economic thought gave its main attention, under pre-monopoly capitalism, to problems of the origin, essence, and formation of the value (or purchasing power) of money, under contemporary state monopoly capitalism, theories of money have shifted more and more (in connection with the marked aggravation of the antagonistic contradictions of capitalist production) toward study of its effect on the development of the capitalist economy".
[Smirnov et al, 1984, 45#cptResource289#]

sciMny'school.MONETARY-CIRCUIT-THEORY

name::
* McsEngl.sciMny'school.MONETARY-CIRCUIT-THEORY,
* McsEngl.conceptEconomy358.1,
* McsEngl.circuitism@cptEconomy358.1,
* McsEngl.Monetary-circuit-theory@cptEconomy358.1,
* McsEngl.circuitist-money-theory@cptEconomy358.1,

_DESCRIPTION:
Monetary circuit theory is a heterodox theory of monetary economics, particularly money creation, often associated with the post-Keynesian school.[1] It holds that money is created endogenously by the banking sector, rather than exogenously by central bank lending; it is a theory of endogenous money. It is also called circuitism and the circulation approach.
[http://en.wikipedia.org/wiki/Monetary_circuit_theory]
===
Circuitist money theory, held by some post-Keynesians, which argues that money is created endogenously by the banking system, rather than exogenously by central bank lending. Further, they argue that money is not neutral – a credit money system is fundamentally different from a barter system, and money and banks must be an integral part of economic models.
[http://en.wikipedia.org/wiki/Money_creation]

It also emphatically rejects the neutrality of money, believing instead that the money supply and its growth or decline are critical to the functioning of the economy.
[http://en.wikipedia.org/wiki/Circuitist]

sciMny'school.NOMINALISM

name::
* McsEngl.sciMny'school.NOMINALISM,
* McsEngl.nominalism-theory-of-money,

"The makind of other functions of money into absolutes -as medium of exchange and means of payment- caused the appearance and development of the nominalist theory of money, which identifies money with symbols of value lacking any material content, with purely accounting units without value in themselves. The fathers of this theory, the English philosopher Bishop Berkeley and the Scottish economist James Stuart, declared money to be a purely arbitrary symbol employed only in order to fix relative values and exchange ratios in the exchange of goods".
[Smirnov et al, 1984, 48#cptResource289#]

sciMny'school.QUANTITY-THEORY

name::
* McsEngl.sciMny'school.QUANTITY-THEORY,
* McsEngl.conceptEconomy541.115.59,
* McsEngl.quantity-theory-of-money@cptEconomy240.59,
====== lagoGreek:
* McsElln.ποσοτικη-θεωρια-του-χρηματος, {2012-06-13}

_DESCRIPTION:
"Πρόκειται για την απλή θεωρία ότι η ποσότητα του χρήματος ΔΕΝ επηρεάζει την οικονομική δραστηριότητα (παραγωγή, απασχόληση, σχετικές τιμές αγαθών, εργασίας κλπ). Επηρεάζει μόνο τις απόλυτες τιμές." Σε αυτή στηρίχτηκε ο "κανόνας του χρυσού". Δέχτηκε πυρά από τον Κέινς που θεωρεί οτι ΣΕ ΠΕΡΙΟΔΟ ΚΡΙΣΗΣ η αύξηση της ποσότητας χρήματος ΔΕΝ είναι πληθωριστική και στο βαθμό που τονώνει την αισιοδοξία των παραγωγών, μπορεί να οδηγήσει σε αύξηση της παραγωγής.
[Βαρουφάκης, Κρίσης Λεξιλόγιο, 2011, σ117#cptEconomy438.6#]
===
"The quantity theory of money has a leading place in Western economics as regards the value basis of money. It was very popular in the seventeenth to nineteeth centuries and the first third of the twentieth, until the advent of Keynesianism. And even now it continues to hold strong positions as the basis of modern neoclassical theory's treatment of the influence of money on the capitalist economy. Its supporters consider that the value of the monetary unit and the commodity price level are governed by the amount of money in circulation. The more money there is in circulation, the higher the prices of goods should be and the lower the value of the monetary unit... The most typical representatives of the quantity theory today are the monetarists headed by Milton Friedman.
[Smirnov et al, 1984, 50#cptResource289#]

sciMny.EVOLUTING#cptCore546.171#

name::
* McsEngl.sciMny.EVOLUTING,

{time.1976}:
=== Denationalisation of Money
An Analysis of the Theory and Practice of Concurrent Currencies
F. A. HAYEK
Nohel Laureate 1974
* http://mises.org/books/denationalisation.pdf

{time.1912}:
=== The Theory of Money and Credit
by Ludwig von Mises
* http://mises.org/books/Theory_Money_Credit/Contents.aspx

{time.1905}:
=== Knapp, State Theory of Money (1924, 1905)
* http://www.efm.bris.ac.uk/het/knapp/StateTheoryMoney.pdf

mnyval'Currency-turmoil

name::
* McsEngl.mnyval'Currency-turmoil,
* McsEngl.mny'currency-turmoil,

ΝΟΜΙΣΜΑΤΙΚΗ_ΑΝΑΤΑΡΑΧΗ

_DESCRIPTION:
ΟΣΟΙ ΕΠΕΝΔΥΟΥΝ ΣΕ ΝΟΜΙΣΜΑΤΑ ΔΕΝ ΑΝΑΜΕΝΟΥΝ ΚΕΡΔΗ ΜΟΝΟ ΑΠΟ ΤΟΚΟΥΣ ΑΛΛΑ ΚΑΙ ΑΠΟ ΤΙΣ ΣΥΝΑΛΛΑΓΜΑΤΙΚΕΣ ΔΙΑΦΟΡΕΣ. ΟΤΑΝ ΛΟΙΠΟΝ Η ΙΣΟΤΙΜΙΑ ΔΥΟ ΝΟΜΙΣΜΑΤΩΝ ΕΝΔΕΧΕΤΑΙ Ν'ΑΛΛΑΞΕΙ, ΤΟΤΕ ΟΙ ΕΠΕΝΔΥΤΕΣ ΑΛΛΑΖΟΥΝ ΤΗ "ΘΕΣΗ" ΤΟΥΣ, ΠΩΛΟΥΝ ΤΟ ΑΣΘΕΝΕΣ ΝΟΜΙΣΜΑ ΓΙΑ ΝΑ ΑΓΟΡΑΣΟΥΝ ΤΟ ΝΟΜΙΣΜΑ ΠΟΥ ΣΥΜΦΩΝΑ ΜΕ ΤΙΣ ΠΡΟΒΛΕΨΕΙΣ ΤΟΥΣ ΘΑ ΑΝΑΤΙΜΗΘΕΙ.
[ΒΗΜΑ, 8 ΑΥΓΟ 1993, Ε4]

mnyval'doing.Appreciation (ανατίμηση)

name::
* McsEngl.mnyval'doing.Appreciation (ανατίμηση),
* McsEngl.mny'appreciation,
* McsEngl.mny'strength,
* McsEngl.mny'strongness,
* McsEngl.mny'weaknessNo,
====== lagoGreek:
* McsElln.ανατίμηση-νομίσματος@cptEconomy,

_DESCRIPTION:
* decreases competitiveness.

mnyval'doing.Depreciation (υποτίμηση)

name::
* McsEngl.mnyval'doing.Depreciation (υποτίμηση),
* McsEngl.mny'depreciation,
* McsEngl.*-cpt.mny'weakness,
====== lagoGreek:
* McsElln.υποτίμηση-νομίσματος@cptEconomy,

_HOW:
The Chinese Central Bank purchases large quantities of dollar assets, such as US Treasury Bills. This demand for dollars, increases the value of the dollar compared to the Chinese Yuan.
[http://www.economicshelp.org/blog/1675/economics/why-is-chinese-currency-undervalued/]

SPECIFIC

mnyval.FOREIGN-EXCHANGE-RATE (forex)

name::
* McsEngl.mnyval.FOREIGN-EXCHANGE-RATE (forex),
* McsEngl.conceptEconomy541.115.81.1,
* McsEngl.forex,
* McsEngl.mny'convertion-value,
* McsEngl.mny'exchange-rate,
* McsEngl.mny'foreign-exchange-rate,
* McsEngl.mny'forex,

* McsEngl.fxrate@cptEconomy476.1,
* McsEngl.exchange-rate@cptEconomy476.1,
* McsEngl.foreign-exchange-rate@cptEconomy476.1,
* McsEngl.forex-rate@cptEconomy476.1,
* McsEngl.FX-rate@cptEconomy476.1,
* McsEngl.mny'exchange-rate,
* McsEngl.mny'convertion-value,
* McsEngl.mny'foreign-exchange-rate,
* McsEngl.mny'forex,
* McsEngl.mny'fx,
* McsEngl.mny'price-in-other-money,
* McsEngl.mny'value-of-conversion,
* McsEngl.mny'value.conversion,
====== lagoGreek:
* McsElln.ΙΣΟΤΙΜΙΕΣ-ΝΟΜΙΣΜΑΤΩΝ,
* McsElln.σχετική-τιμή-νομίσματος,

_DESCRIPTION:
In finance, the exchange rates (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies specify how much one currency is worth in terms of the other.
It is the value of a foreign nation’s currency in terms of the home nation’s currency.[1] For example an exchange rate of 91 Japanese yen (JPY, ¥) to the United States dollar (USD, $) means that JPY 91 is worth the same as USD 1. The foreign exchange market is one of the largest markets in the world. By some estimates, about 3.2 trillion USD worth of currency changes hands every day.
[http://en.wikipedia.org/wiki/Exchange_rate]

_SPECIFIC:
Από τα 134 κράτη-μέλη του ΔΝΤ τα 65 συνεχίζουν να διατηρούν σχετικά σταθερές ισοτιμίες των νομισμάτων τους με κάποιο "ηγεμονικό" νόμισμα: Με το δολάριο 42 νομίσματα, με το γαλλικό φράγκο 14, με τη στερλίνα 5, με τη ρέντα της Νότιας αφρικής 2, με την πεσέτα ισπανίας 1 και με το δολάριο αυστραλίας 1.
Σε ειδικά τραβηχτικά δικαιώματα υπολογίζεται άμεσα η ισοτιμία 13 νομισμάτων και με άλλα συναλλαγματικά "καλάθια" 19 νομίσματα. Τα υπόλοιπα 36 κράτη καθορίζουν την ισοτιμία των νομισμάτων στα πλαίσια των συναλαγματικών ζωνών, ή με τη μέθοδο της αυτόνομης διακύμανσης.
[ΦΟΥΝΤΟΥΛΗΣ, 1986, 86#cptResource157#]

mnyval.FACE

_CREATED: {2015-07-24}

name::
* McsEngl.mnyval.FACE,
* McsEngl.face-value-of-money@cptEconomy,
* McsEngl.mny'price, {2017-01-28}
* McsEngl.nominal-value-of-money@cptEconomy,

mnyval.PURCHASING-POWER

_CREATED: {2012-12-03}

name::
* McsEngl.mnyval.PURCHASING-POWER,
* McsEngl.conceptEconomy541.115.70,
* McsEngl.mny'purchasing-power,
* McsEngl.mnyvalue.REAL,
* McsEngl.purchasing-value-of-money@cptEconomy,
* McsEngl.purchasing-power-of-money@cptEconomy541.115.70, {2012-12-03}

_DESCRIPTION:
Inflation reduces the real value of money over time; conversely, deflation increases the real value of money – the currency of a national or regional economy. This allows one to buy more goods with the same amount of money over time.
[http://en.wikipedia.org/wiki/Deflation]

_DESCRIPTION:
Purchasing power (sometimes retroactively called adjusted for inflation) is the amount of goods or services that can be purchased with a unit of currency. For example, if you had taken one dollar to a store in the 1950s, you would have been able to buy a greater number of items than you would today, indicating that you would have had a greater purchasing power in the 1950s. Currency can be either a commodity money, like gold or silver, or fiat currency, or free-floating market-valued currency like US dollars. As Adam Smith noted, having money gives one the ability to "command" others' labor, so purchasing power to some extent is power over other people, to the extent that they are willing to trade their labor or goods for money or currency.

If one's monetary income stays the same, but the price level increases, the purchasing power of that income falls. Inflation does not always imply falling purchasing power of one's money income since it may rise faster than the price level. A higher real income means a higher purchasing power since real income refers to the income adjusted for inflation.

For a price index, its value in the base year is usually normalized to a value of 100. The purchasing power of a unit of currency, say a dollar, in a given year, expressed in dollars of the base year, is 100/P, where P is the price index in that year. So, by definition the purchasing power of a dollar decreases as the price level rises. The purchasing power in today's money of an amount C of money, t years into the future, can be computed with the formula for the present value:

where in this case i is an assumed future annual inflation rate.
[http://en.wikipedia.org/wiki/Purchasing_power] {2012-12-03}

The chief object of this book is to explain the causes determining the purchasing power of money. The purchasing power of money is indicated by the quantities of other goods which a given quantity of money will buy. The lower we find the prices of goods, the larger the quantities that can be bought by a given amount of money, and therefore the higher the purchasing power of money. The higher we find the prices of goods, the smaller the quantities that can be bought by a given amount of money, and therefore the lower the purchasing power of money. In short, the purchasing power of money is the reciprocal of the level of prices; so that the study of the purchasing power of money is identical with the study of price levels.
[http://oll.libertyfund.org/index.php?option=com_staticxt&staticfile=show.php%3Ftitle=1165&layout=html#chapter_23816]

VELOCITY-OF-MONEY

name::
* McsEngl.velocity-of-money@cptEconomy261i,
* McsEngl.velocity-of-circulation@cptEconomy261i,
* McsEngl.monetary-velocity@cptEconomy261i,

_DESCRIPTION:
The velocity of money (also called velocity of circulation) is the average frequency with which a unit of money is spent in a specific period of time. Velocity associates the amount of economic activity associated with a given money supply. When the period is understood, the velocity may be presented as a pure number; otherwise it should be given as a pure number over time. In the equation of exchange, velocity of money is one of the variables claimed to determine inflation.
[http://en.wikipedia.org/wiki/Velocity_of_money]
===
Monetary velocity is thus a measure of the frequency with which the average dollar is used to effect transactions during a given span of time.
[Cooper et al, 1990, 65#cptResource432#]

mny'creating'Importance

name::
* McsEngl.mny'creating'Importance,

The pinnacle of power in today's world is the power to issue money.
If that power can be democratized and focused in a direction which gives social and ecological concerns top priority, then there may yet be hope for saving the world.
[New Money for Healthy Communities
by Thomas H. Greco, Jr.
http://www.ratical.org/many_worlds/cc/NMfHC/index.html]

mny'creating'organization

name::
* McsEngl.mny'creating'organization,
* McsEngl.mnsy'issuance,
* McsEngl.mny'issuer,
* McsEngl.mny'operator,
====== lagoGreek:
* McsElln.εκδότης-νομίσματος@cptEconomy,

mny'creating'resource

name::
* McsEngl.mny'creating'resource,

_ADDRESS.WPG:
* {2020-04-27} https://medium.com/@stefanievonjan/money-creation-in-the-fiat-system-a-balance-sheet-analysis-of-banks-and-central-banks-363251bd2eb4,
* http://evonomics.com/economists-ignore-one-of-capitalisms-biggest-problems// Banks create money out of nothing
* Strip private banks of their power to create money
The giant hole at the heart of our market economies needs to be plugged
Martin Wolf April 24, 2014 1:32 pm
- http://www.ft.com/cms/s/0/7f000b18-ca44-11e3-bb92-00144feabdc0.html#ixzz2ztYKeNnz,

SPECIFIC

mny'creating.FIAT

_CREATED: {2012-12-13}

name::
* McsEngl.mny'creating.FIAT,
* McsEngl.conceptEconomy541.115.74,
* McsEngl.converting-satisfier-to-fiat-money, {2012-12-14}
* McsEngl.fiat-money-creating@cptCore541.115.74, {2012-12-14}
* McsEngl.transforming-satisfier-to-fiat-money, {2012-12-14}

_DESCRIPTION:
Any authoring-agent can issue money by buying RESERVE-commodities (collateral), NOT by consuming-commodities.
Thus supply money in the market by just transforming commodities to money-commodities.
Inflation we have when the authority originates (sells) money and destroyes|consumes the buying-commodities. This was the practice of goverment to support their wars.
[hmnSngo.2012-12-17]

mny'doing.MULFUNCTIONING

_CREATED: {2012-12-18}

name::
* McsEngl.mny'doing.MULFUNCTIONING,
* McsEngl.conceptEconomy541.115.77,
* McsEngl.money-mulfunctioning@cptEconomy541.115.77, {2012-12-18}

_DESCRIPTION:
Conventional money malfunctions in three basic ways:
(1) there is never enough of it to serve the purposes for which it is created,
(2) it is misallocated at its source, going, not to those who are most in need or who will use it most effectively, but to political power centers and those who already control large pools of wealth (like large corporations),
(3) it systematically pumps wealth from the poor to the rich. Each of these will be explained in turn, but to do so we first we need to explain how money is created in the current monetary system.
[http://www.ratical.org/many_worlds/cc/NMfHC/chp4.html]

mny'satisfier.exchangable#cptEconomy541.58#

name::
* McsEngl.mny'satisfier.exchangable,

mnym'DEFINITION

Not-aggregate = unit.
[hmnSngo.2013-12-01]

_DefinitionSpecific:
Money is a MEASURE (567.3) of a quantity-of-value (240.32)
[hmnSngo.2011-05-17]
===
Money is a MEASURE (567.3) of value (164). Then it is comprised of a number AND a unit-of-measurement of value (= currency). Owners of money have official records in deposit-organizations, hold government-backed-documents with specific measures, or hold any other official-certificate expressing a measure.
[hmnSngo.2011-05-13]

_SPECIFIC:
* mnyAgrt.economy#cptEconomy541.115.15#
* mnyAgrt.household#cptEconomy541.115.79#
* mnyAgrt.orgProducing
* mnyAgrt.world#cptEconomy541.115.78#

mnyspl'PART

_PART:
* M0#cptEconomy541.115.30#
* M1#cptEconomy541.115.14#
* M2#cptEconomy420.13#
* M3#cptEconomy541.115.12#
* M4#cptEconomy541.115.18#

_ΕΝΤΥΠΟ_XΡΗΜΑ:
Δεν πρέπει να ξεχνάμε ότι στις σύγχρονες καπιταλιστικές οικονομίες το έντυπο χρήμα είναι λιγότερο από το 10% του χρήματος το οποίο κυκλοφορεί στις αγορές.
[http://www.protagon.gr/?i=protagon.el.8emata&id=18383]

mnyspl'inflation#cptEconomy541.44.32#

name::
* McsEngl.mnyspl'inflation,

mnyspl'Monitor

name::
* McsEngl.mnyspl'Monitor,

_DESCRIPTION:
Central banks monitor the amount of money in the economy by measuring monetary aggregates such as M2. The effect of monetary policy on the money supply is indicated by comparing these measurements on various dates. For example in the US, M2 grew from $6407.3bn in January 2005 to $8318.9bn in January 2009.[1]
[http://en.wikipedia.org/wiki/Money_creation]

η πρώτη κεντρική τράπεζα που υιοθέτησε τον έλεγχο της Οικονομίας μέσω της ποσότητας χρήματος, ήταν η γερμανική Bundesbank το 1974
[http://www.casss.gr/PressCenter/Articles/2569.aspx]

mnyspl'Needed

name::
* McsEngl.mnyspl'Needed,

A shortage of money is an obstacle to exchanges.
An excess if the money is commoditity-mny increases the prices of the satisfiers, if it is fiat-mny backed-by commodites nothing happens.
[hmnSngo.2012-12-21]

mnyspl'Relation-EXPECTATIONS-ABOUT-FUTURE-COURSE-OF-ECONOMIC-EVENTS

name::
* McsEngl.mnyspl'Relation-EXPECTATIONS-ABOUT-FUTURE-COURSE-OF-ECONOMIC-EVENTS,

Another significant factor regarding the amount of MONEY-BALANCES people choose to hold is expectations regarding the future course of economic events.
[Cooper et al, 1990, 66#cptResource432#]

mnyspl'Relation-INTEREST-RATE#cptEconomy276#

name::
* McsEngl.mnyspl'Relation-INTEREST-RATE,

In Keynes's view, increases in the quantity of money generally result in decreases in the rate of interest, thus encouraging borrowing and ivestment (and other) spending.
[Cooper et al, 1990, 69#cptResource432#]

EXPECTATIONS regarding the future course of interest rates may also affect desired cash balances. When interest rates are expected to rise, individuals may wait to lend until higher rates are available and thus hold larger cash balances.
[Cooper et al, 1990, 66#cptResource432#]

mnyspl'Relation-PRICES#cptEconomy541.44#

name::
* McsEngl.mnyspl'Relation-PRICES,

The quantity of money is of great significance for
 the level of prices,
 interest rates, and
 the employment of productive resources to produce goods and services.
[Cooper et al, 1990, 57#cptResource432#]

SPECIFIC

mnyspl.socUSA

name::
* McsEngl.mnyspl.socUSA,

According to the Federal Reserve Bank of Chicago:
"..currency is a relatively small part of the money stock. About 69%, or $623 billion, of the $898 billion total money stock in December 1991, was in the form of transaction deposits, of which $290 billion were demand and $333 billion were other checkable deposits." [12]

mnyspl'Relation aggregate money and EXPECTATIONS ABOUT FUTURE COURSE OF ECONOMIC EVENTS

name::
* McsEngl.mnyspl'Relation aggregate money and EXPECTATIONS ABOUT FUTURE COURSE OF ECONOMIC EVENTS,

Another significant factor regarding the amount of MONEY-BALANCES people choose to hold is expectations regarding the future course of economic events.
[Cooper et al, 1990, 66#cptResource432#]

cash'creating

name::
* McsEngl.cash'creating,
* McsEngl.conceptEconomy541.115.35,
* McsEngl.conceptEconomy503,
* McsEngl.money-creation@cptEconomy503,
* McsEngl.money-issuing@cptEconomy503,
* McsEngl.money-printing@cptEconomy503,

_DESCRIPTION:
In economics, money creation is the process by which the money supply of a country is expanded. There are two principal stages of money creation.
First, the central bank of a country can introduce or issue new money into the economy (termed 'expansionary monetary policy'). A central bank usually injects new money into the economy by purchasing financial assets.
Second, the new money introduced by the central bank is multiplied by commercial banks through fractional reserve banking, expanding the amount of broad money (i.e. cash plus demand deposits) in the economy.
[http://en.wikipedia.org/wiki/Money_creation]
===
Ειδικά όσον αφορά τα μετρητά χρήματα, η δημιουργία τους είναι αποκλειστικό «προνόμιο» της εκάστοτε κεντρικής τράπεζας – αν και αποτελούν ένα ελάχιστο μέρος (περί το 3%), της συνολικής ποσότητας χρήματος, ενώ βαίνουν συνεχώς μειούμενα.
[http://www.casss.gr/PressCenter/Articles/2244.aspx]

_Transparancy:
Συνεχίζοντας, θεωρούμε ότι οι κανονικές τράπεζες (εμπορικές), δεν διαφέρουν σε μεγάλο βαθμό από τις σκιώδεις – με μοναδική ίσως εξαίρεση το ότι υπάγονται σε θεσμοθετημένους ελεγκτικούς μηχανισμούς. Ειδικότερα, η διαδικασία της δημιουργίας χρήματος εκ μέρους τους από το πουθενά παραμένει «αδιαφανής - ενώ είναι πολύ δύσκολο να «ανακαλυφθεί/τεκμηριωθεί». Για παράδειγμα, όταν κανείς αναζητήσει στους Ισολογισμούς και στις στατιστικές των εμπορικών τραπεζών, εάν το ποσόν των χορηγήσεων τους υπερβαίνει το αντίστοιχο των καταθέσεων, δεν πρόκειται να διακρίνει σημαντικές διαφορές (Πίνακας Ι).
[http://www.casss.gr/PressCenter/Articles/2337.aspx, 2011-05-01]

cash'Resource

name::
* McsEngl.cash'Resource,

_ADDRESS.WPG:
* http://cointelegraph.com/news/mastercard-boss-cash-will-be-extinct-in-uk-ireland-within-5-years,
* https://www.weforum.org/agenda/2016/01/are-we-heading-towards-a-cashless-economy//
* {2016-01-25} https://cointelegraph.com/news/cash-electronic-money-scandinavia,

cash.SPECIFIC#cptCore546.23#

name::
* McsEngl.cash.SPECIFIC,

_SPECIFIC: cash.Alphabetically:
* coin
* fiat-cash
* fiatNo-cash
* noteMoney

_SPECIFIC:
* coin
* bankNote

_SPECIFIC_DIVISION.Commodity:
* commodity-representation (commodity unitOfMeasurement)
* nonCommodity-representation (fiat unitOfMeasurement)

coin'Evolution#cptCore546.171#

name::
* McsEngl.coin'Evolution,

_1809-1829:
Ο Jacob υπολογίζει πως απο τα 380 εκ. λίρες που υπήρχαν το 1809 στην Ευρώπη, το 1829, μέσα σε 20 χρόνια, είχαν ολότελα χαθεί απο την τριβή 19 εκ. λίρες.
[ΜΑΡΞ ΚΡΙΤΙΚΗ.., 1859, 86#cptResource161#]

{time.-700to-601}:
ΤΑ ΠΡΩΤΑ ΧΡΥΣΑ ΝΟΜΙΣΜΑΤΑ ΚΥΚΛΟΦΟΡΗΣΑΝ ΠΡΙΝ ΑΠΟ 2.600-2700 ΧΡΟΝΙΑ
[ΦΟΥΝΤΟΥΛΗΣ, 1986, 18#cptResource157#]

SPECIFIC

* coin.specific,

coin.FIAT

name::
* McsEngl.coin.FIAT,

coin.FIAT.NO

name::
* McsEngl.coin.FIAT.NO,

coin.GLOW-IN-THE-DARK

name::
* McsEngl.coin.GLOW-IN-THE-DARK,
* McsEngl.coin.glow-in-the-dark,

Are There Any Glow-In-The-Dark Coins in Circulation?
Canada's new $2 coin depicts the Northern Lights and is the world’s first glow-in-the-dark coin in circulation.

Canada is absolutely glowing about the new two-dollar coins that the Royal
Canadian Mint has created to celebrate the country’s 150th birthday. The
mint is releasing luminescent Toonies, as the coins are affectionately
called, showing a canoe on a placid lake, with the Northern Lights in the
background. In daylight, the scene is a brilliant blue and green, but in
the dark, the Aurora Borealis depicted on the coin casts an eerie glow.
About 3,000 of the coins will be put into circulation across Canada, making
it the first luminescent coin in general use. The mint already created the
first glowing coin in 2012 -- a limited-edition, collectors-only quarter
featuring a dinosaur that turns into a glowing skeleton in the dark.
Read More: http://www.wisegeek.com/are-there-any-glow-in-the-dark-coins-in-circulation.htm?m {2017-06-24}

coin.NICKEL

name::
* McsEngl.coin.NICKEL,
* McsEngl.nickel.coin@cptEconomy,

_DESCRIPTION:
NORTH AMERICAN
a five-cent coin; five cents.
"a button the size of a nickel"
[googl dict]

coin.TOKEN

name::
* McsEngl.coin.TOKEN,
* McsEngl.token-coin@cptEconomy, {2012-12-20}

In the study of numismatics, tokens are coin-like objects used instead of coins. The field of tokens is part of exonumia. Tokens are used in place of coins and either have a denomination shown or implied by size, color or shape. "Tokens" are often made of cheaper metals: copper, pewter, aluminium, brass and tin were commonly used, while bakelite, leather, porcelain, and other less durable materials are also known.

The key point of difference between a token and a coin is that a coin is issued by a governmental local or national authority and is freely exchangeable for goods or other coins, whereas a token has a much more limited use and is often (but not always) issued by a private company, group, association or individual.

In the case of "currency tokens" issued by a company but also recognized by the State there is a convergence between tokens and currency.
[http://en.wikipedia.org/wiki/Token_coin]

cashNo'resource

name::
* McsEngl.cashNo'resource,

_ADDRESS.WPG:
* http://www.weforum.org/agenda/2016/01/are-we-heading-towards-a-cashless-economy//

Κατάργηση χαρτονομισμάτων "θα τεθεί στo G7"
ΑΘΗΝΑ 19/05/2015

Ο γερμανός καθηγητής Οικονομίας και μέλος της Επιτροπής Σοφών της γερμανικής κυβέρνησης Πέτερ Μπόφινγκερ τάχθηκε υπέρ της κατάργησης των χαρτονομισμάτων σε συνέντευξή του στο Der Spiegel. «Με τις τρέχουσες τεχνικές δυνατότητες τα κέρματα και τα χαρτονομίσματα είναι ουσιαστικά αναχρονισμός», δήλωσε.

Την ίδια άποψη μοιράζεται και ο καθηγητής του Χάρβαρντ Κένεθ Ρόγκοφ.

Σύμφωνα με τον γερμανό οικονομολόγο, με την κατάργηση των χαρτονομισμάτων θα στερέψει η αγορά της μαύρης εργασίας και των ναρκωτικών. Ο Μπόφινγκερ ζήτησε μάλιστα από τη γερμανική κυβέρνηση να υποστηρίξει την ιδέα αυτή σε παγκόσμιο επίπεδο. «Θα ήταν ένα καλό θέμα για τη σύνοδο της Ομάδας G7», είπε χαρακτηριστικά.

Από την πλευρά του, ο πρώην επικεφαλής οικονομολόγος του Διεθνούς Νομισματικού Ταμείου (ΔΝΤ) Κένεθ Ρόγκοφ δήλωσε στη γερμανική εφημερίδα Handelsblatt ότι το πρώτο βήμα προς την κατεύθυνση αυτή θα ήταν να τυπώνονται μόνο τα μικρά χαρτονομίσματα.

«Πολύ μεγάλο μέρος των αρνητικών συνειρμών συνδέεται με τα μεγάλα χαρτονομίσματα. Όταν σταματήσουμε να τυπώνουμε αυτά, τότε θα έχουμε ήδη πετύχει πολλά», εκτίμησε.

Εξήγησε ότι εξαιτίας της ανωνυμίας τους τα χαρτονομίσματα μπορούν να χρησιμοποιηθούν για παράνομες συναλλαγές, ενώ υποστήριξε ότι η αχρήματη οικονομία θα δώσει στις κεντρικές τράπεζες μεγαλύτερη ευχέρεια να υιοθετούν αρνητικά επιτόκια εμποδίζοντας τους επενδυτές να καταφεύγουν στην μετατροπή των χρημάτων σε μετρητά.
[http://www.nooz.gr/perierga/i-katargisi-ton-xartonomismaton-sto-g7]

Evolution#cptCore546.171#

Historically, banks have had a monopoly on checking accounts. But then, during the 1970s some S&Ls were permitted to offer saving accounts that could be used as checking accounts.
[Bowden et al, 1984, 9#cptResource436#]

PROCESS#cptCore475#

Three main reasons why people write checks.
 to acquire cash
 to make retail purchases
 to pay bills.
[Bowden et al, 1984, 206#cptResource436#]

measure#cptCore88#

USA:
The banking system in the US is now clearing and processing more than 30 BILLION checks per year, and the number is constanly increasing.
[Bowden et al, 1984, 17#cptResource436#]
-  in terms of personal checks written, the study (Federal Reserve Bank of Atlanta 1983) predicts a decline from about 18 billion per year in 1984 to about 16 billion in 1994.
[Bowden et al, 1984, 206#cptResource436#]
-  Some 30 billion checks are written in the United States every year.
[Martin, 1990, 17#cptResource134#]

mnyCmr'adoption

name::
* McsEngl.mnyCmr'adoption,

_DESCRIPTION:
* satisfiers used to buy.
* humans used.

mnyCmr'CCIA-project

name::
* McsEngl.mnyCmr'CCIA-project,
* McsEngl.CCIA@cptEconomy,

_DESCRIPTION:
a four-year-long transnational project looking at several examples of community currencies across Europe.
[http://community-currency.info/en/news/guide-book-people-powered-money/]

_ADDRESS.WPG:
* book: http://community-currency.info/wp-content/uploads/2015/06/ccia-book-people-powered-money1.pdf,
* http://communitycurrenciesinaction.eu//
* http://www.neweconomics.org/projects/entry/communitycurrencies,

mnyCmr'doing.CONVERTING

name::
* McsEngl.mnyCmr'doing.CONVERTING,

mnyCmr'doing.BUING-MONEY (earning)

name::
* McsEngl.mnyCmr'doing.BUING-MONEY (earning),
* McsEngl.mnyAlt'earning,
* McsEngl.mnyAlt'selling-satisfier,

mnyCmr'doing.SELLING-MONEY (spending)

name::
* McsEngl.mnyCmr'doing.SELLING-MONEY (spending),
* McsEngl.mnyAlt'buing-satisfier,
* McsEngl.mnyAlt'spending,

mnyCmr'exchange-rate

name::
* McsEngl.mnyCmr'exchange-rate,
* McsEngl.mnyAlt'valuation,
* McsEngl.mnyAlt'valued,

mnyCmr'service-system

name::
* McsEngl.mnyCmr'service-system,

_GENERIC:
* money-service-system#ql:mny'exchange_system#

mnyCmr'legal-tender

name::
* McsEngl.mnyCmr'legal-tender,

mnyCmr'medium-for-exchange

name::
* McsEngl.mnyCmr'medium-for-exchange,
* McsEngl.mnyAlt'redeemability,

_DESCRIPTION:
Who accept it.

mnyCmr'resource

name::
* McsEngl.mnyCmr'resource,

_ADDRESS.WPG:
* http://complementarycurrency.org//
* Community-Currency-Knowledge-Gateway: http://community-currency.info/en/about-us//
* book: ScotPound: digital money for the common good
A new socially inclusive payment system for Scotland::http://b.3cdn.net/nefoundation/3a512ad0ef4458b28b_ntm6bwk42.pdf,
* book http://community-currency.info/wp-content/uploads/2015/06/ccia-book-people-powered-money1.pdf,

mnyCmr'resource.book.People-Powerd-Money {2015}

name::
* McsEngl.mnyCmr'resource.book.People-Powerd-Money {2015},
* McsEngl.bukPpm,

_ADDRESS.WPG:
* http://community-currency.info/en/news/guide-book-people-powered-money//
* http://community-currency.info/wp-content/uploads/2015/06/ccia-book-people-powered-money1.pdf,

_TWITTER:
@CCIA_EU
@CommCurrency
http://synagonism.net/book/economy/2015.ppm.html

_HUMAN:
* Bindewald.Leander:
+44 7584 191972
Lakedistrict, United Kingdom
Leander@criterical.net
skype: Leander.Bindewald
* http://criterical.net//

_LICENCE:
* https://creativecommons.org/licenses/by-nc-sa/3.0// Attribution-NonCommercial-ShareAlike 3.0 Unported (CC BY-NC-SA 3.0)

People Powered Money is the result of a project running from 2012-2015, Community Currencies in Action (CCIA). Part-funded by the European Union’s Interreg project, CCIA is a transnational project in the community currency field, bringing together expert partners from across north-west Europe and co-ordinating six pilot currencies in the United Kingdom, Belgium, the Netherlands and France.

Drawing on the learnings of these pilots and the broader currency innovation movement, this book provides policymakers and practitioners alike with the information and advice to successfully implement a currency project in their communities. With the right knowledge and support, these can bring significant economic, social and environmental benefits to their users.

Often confined to the margins, community currencies have the potential to become a normal part of economic life. CCIA hopes this book will enable a new generation of community currencies and support their emergence into the mainstream.

People Powered Money
Designing, developing and delivering community currencies

First edition published in paperback in Great Britain in 2015 by

New Economics Foundation
10 Salamanca Place
London SE1 7HB
(0)20 7820 6300
info@neweconomics.org
www.neweconomics.org

This book is Licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. Every effort has been made to trace or contact all copyright holders. The publishers will be pleased to make good any omissions or rectify any mistakes brought to their attention at the earliest opportunity. No responsibility can be accepted by the publisher for action taken as a result of information contained in this publication.

A CIP catalogue record for this book is available from the British Library.

Print ISBN: 978-1-908506-78-8 | ePub ISBN: 978-1-908506-80-1

registered charity number 1055254 © April 2015 New Economics Foundation

NEF supports The Forest Stewardship Council [FSC], the leading international forest certification organisation.
All NEF publications are printed on FSC–certified paper.

Project Managed by EDDEPRO Services
Cover illustration Alex Lucas
Design and layout A-Side Studio
Copy edited by Alexis Taylor

Printed and bound in Great Britain by Blackmore, Shaftesbury SP7 8PX

Acknowledgements

This book would not have been possible without the commitment and contributions of our CCIA partners and many external experts who have worked on the topic for many years, as well as, of course, the funding contributed by the European Union’s Interreg 4b NorthWest Europe programme.

We would like to acknowledge, first and foremost, those who helped to write People Powered Money, especially Leander Bindewald, Alice Martin, Duncan McCann, Tony Greenham and Duncan Thomas.

This book also draws on recent community currency guidebooks in Dutch and French by our colleagues in Belgium and the Netherlands:

Guide pratique de monnaies complementaires (2013), written by Antoine Attout, Leone Clerc, Amandine Cloot, Antoine Fain, Lise Disneur, Arnaud Marchand and Laurence Roland and published by the Reseau Financement Alternatif in Brussels with the support of the Wallonian government.

Maak je buurt uitmuntend! (2014), written by Bernard Lietaer, Anne Snick and Edgar Kampers, published by the Flemish government.

This book also builds on the CCIA Community Currency Implementation Framework, which pooled the experience and knowledge of our partners and of those on whose shoulders we stand. For this we are especially indebted to the work of Henk van Arkel of the Social Trade Organisation (NL), John Rogers (UK/DE), Arthur Brock of the Metacurrency Project (USA), Ludwig Schuster and the late Margrit Kennedy of the Money Network Alliance (DE), to mention just a few.

We are also very grateful to Nigel Dodd and Molly Scott Cato for contributing forewords. Endorsements from such well-known and respected figures demonstrate how far the community currency movement has come in gaining recognition and establishing its credibility within the economics discipline and field of public policy.

Last but not least, we would like to thank Philipp Degens, Jens Martignoni, Ken Barlow, Susan Steed, Julia Slay, Lucie Stephens, Carlos De Freitas and Brett Scott, who have given priceless feedback and support to ensure that the book is not only comprehensive regarding its subject matter, but written and presented in an accessible and stimulating manner.