The Council of the European Union (EU) represents the 27 EU Member States (see link below). The Council of the EU is a single body, but for reasons relating to the organisation of its work, it meets – according to the subject being discussed – in different ‘configurations’, which are attended by the ministers from the EU Member States and the European Commissioners responsible for the areas concerned. The Economic and Financial Affairs Council (ECOFIN), representing EU finance ministers, is one of the oldest configurations of the Council of the EU (see link below). At the ECOFIN meeting on 14 May 2013, the Council of the EU adopted its latest conclusions on the Single Euro Payments Area () (see link below).
The Council of the “welcomes the successful entering into force” of Regulation () No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro (the Regulation), which effectively mandates migration from national credit transfer and direct debit schemes to Credit Transfer () and Direct Debit () in the euro area by 1 February 2014. The Council of the confirms “that this is a significant step towards a truly integrated market for retail payments in euro.”
The vast majority of European laws are adopted jointly by the European Parliament and the Council of the EU. A ‘regulation’ adopted by the EU legislator is a binding legislative act. It must be applied in its entirety across the EU (see link to the EU Website below). The European Parliament adopted the Regulation on 14 February 2012. The Council of the EU adopted this legislative act on 28 February 2012. With its conclusions on reached on 14 May 2013, the Council of the EU underlines that the provisions of the Regulation “have to be fully respected by all market participants in euro area Member States,” and emphasises that “competent authorities should cooperate intensively, on a national and international level, to ensure effective and harmonised compliance with the Regulation.”
The Council of the stresses that all payment orders which are not submitted in the format requested by the Regulation after 1 February 2014 “may not be processed by all payment service providers in euro area Member States, which otherwise would be sanctioned,” and invites “merchants, corporates, [small and medium-sized enterprises] SMEs and public administrations to immediately take the necessary concrete internal steps for becoming ready for in adapting their information systems accordingly.”
Council of the “calls upon all Member States to significantly intensify communication measures primarily at national level to eliminate existing public awareness gaps”
The Council conclusions on recognise that “of all participants SMEs, small public administrations and local authorities are the least aware of migration and the least prepared for actual migration.” The Council of the also notes that “some stakeholders seem to be planning for a late migration and therefore may be exposed to undue operational risks impacting smooth handling of payments.” The Council of the therefore “calls upon all Member States to significantly intensify communication measures primarily at national level to eliminate existing public awareness gaps.” These communication measures, the Council of the states, should especially target “SMEs, small public administrations and local authorities.” Specifically, the Council of the proposes the following actions:
- Euro area national central banks, ministries of finance and other competent authorities, national banking federations and individual banks should enhance communication activities on migration before summer 2013 through all relevant media channels, e.g. general press, professional press, billboard advertising, radio or TV, where these have not been successfully initiated already.
- The European Commission and the European Central Bank (ECB) should provide assistance and advice to the best of their abilities to fully support the migration process.
- Council members should step up communications to their constituencies about the importance of respecting the deadline for migration. (The Council, which brings together representatives of both the demand and supply sides of the payments market including the , was established by the European Commission and the ECB in June 2010; for information, refer to the links below).
The shares the view that the focus should now be on joining forces to assist, in particular, SMEs and local public administrations in the euro area that must meet the 1 February 2014 deadline. This requires coordinated efforts by national public authorities, and trade associations representing businesses and banks.
Get ready for by 1 February 2014: act now
As reported with the previous Blog posts and in the April 2013 edition of the Newsletter (see link below), the ECB clarified earlier that “there is no Plan B: migration to and is required by law, not only for payment service providers, but also for big billers, SMEs, public administrations and consumers.” With its conclusions of 14 May 2013, the Council of the also confirms that requests for an extension of the 1 February 2014 deadline articulated by some commentators will continue to fall on deaf ears with the lawmakers. The fact of the matter remains: all organisations making payments in the euro area must achieve compliance with the core provisions of the Regulation by 1 February 2014.
The fully supports the recommendation of both the ECB and the Council of the that payment service users should aim to complete migration at the earliest stage possible, taking into consideration that the availability of external resources offered by banks and other service providers – including testing facilities – will be stretched to the limit towards the end of the year. The experience of pioneers on the demand side confirms that compliance is manageable and feasible, but with less than nine months to go until the 1 February 2014 deadline, it is critical that any late movers put processes in place to begin their migration immediately. Relevant information is also made available with ‘The Migration Tool Kit’ (see link below). Act now.
- Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009
- EPC Podcast (April 2013): Learn to Love SEPA in 6 Minutes and Get Ready by 1.2.2014 in the Euro Area. Act Now!
- EPC Newsletter article by Wiebe Ruttenberg (April 2013): ‘SEPA Migration - Don't Count on a Plan B. European Central Bank Publishes First SEPA Migration Report and Warns Against Risks of Late Migration’
- EPC Newsletter article by Javier Santamaría (April 2013): ‘Learn to Love SEPA: the 1 February 2014 Migration Deadline Mandated by European Union Law Will Not Go Away’
- EPC Newsletter article by Javier Santamaría (April 2013): ‘If You Have Not Migrated to SEPA Yet - Get Ready and Get Inspired: SEPA Pioneers on the Demand Side Share Best Practice’
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