(Note: the European Payments Council () is not a European Union (EU) legislative body. More generally, the is not part of the EU institutional framework.)
In February 2012, the co-legislators, i.e. the European Parliament and the Council of the representing Member States, adopted the ‘Regulation () No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro’ (see ‘related links’ below). This legislative act is also known as the Single Euro Payments Area () Regulation. It defines 1 February 2014 as the deadline in the euro area for compliance with the core provisions of this Regulation. Effectively, this means that as of this date, existing national euro credit transfer and direct debit schemes will be replaced by Credit Transfer and Direct Debit.
In line with the provisions of the Regulation () No 260/2012 as currently in effect, payment orders that do not comply with the legal requirements as laid down in this law “will not be allowed to be processed by payment service providers after 1 February 2014.” (See, inter alia, the European Central Bank press release of 24 October 2013.)
The European Commission communicated on 9 January 2014 (see ‘related links’ below) that it proposes to modify Regulation (EU) No 260/2012 to “give an extra transition period of six months during which payments which differ from the format can still be accepted” after 1 February 2014.
In order for this additional transition period to become effective, this proposal introduced by the European Commission must be formally adopted by the EU co-legislators. This means: the European Parliament and the Council of the EU must take the necessary steps to modify the legal text of Regulation (EU) No 260/2012 currently in effect. (The Council of the EU is the EU institution where the Member States’ government representatives sit, i.e. the ministers of each EU Member State with responsibility for a given policy area.)
The recommends that all market participants in the euro area continue working towards meeting the 1 February 2014 deadline since the modification of the Regulation (EU) No 260/2012 has not yet been confirmed by the European Parliament and the Council of the EU.
This is in line with the recommendation of the Eurosystem, which stated on 9 January 2014 (see ‘related links’ below): “The Eurosystem (...) stresses that the migration end date of 1 February 2014 remains and urges all market participants to complete the transition of all credit transfer and direct debit transactions to the standards by this date.” The Eurosystem comprises the European Central Bank and the national central banks of the EU Member States whose currency is the euro.
The European Commission indicated that its proposal to modify Regulation (EU) No 260/2012 could still be “in process of adoption” by the European Parliament and the Council of the EU on 1 February 2014. This would mean that payment service providers and users in the euro area would not have certainty by 1 February 2014 whether the “extra transition period” proposed by the European Commission applies or not.
The emphasises that in the event that the legislator would change the Regulation () No 260/2012 in line with the proposal introduced by the European Commission on 9 January 2014, it will be crucial that relevant public authorities ensure that all stakeholders impacted across the euro area are informed on the effectively modified deadline for compliance with this law immediately.
It is the responsibility of the public authorities determining the compliance requirements to avoid a situation where uncertainty around applicable legal deadlines would impact ongoing migration efforts and further delay the completion of migration.
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