Does your bank obey the law?
Thread poster: Mats Wiman

Mats Wiman  Identity Verified
Sweden
Local time: 00:47
Member (2000)
German to Swedish
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MODERATOR
Feb 5, 2004

From July 2003 this (Regulation 2560/2001) is the law for EURO payments WITHIN the EU:

The Regulation establishes the principle of equal charges for domestic payments and cross-border payments in euros. There should be no difference in the charges applied simply because the payment crosses a border (Articles 1 and 3);

It requires banks to inform their customers on the charges they apply for all payment services; among other things, they have to give advance notice of any changes in tariffs before applying them (Article 4);

It lays down standards to facilitate the automation of payment systems. Standards such as the International Bank Account Number and the Bank Identifier Code are thus made all but compulsory (Article 5). Banks must indicate them on account statements and companies on their invoices. Likewise, a range of national rules, such as statistical reporting obligations, which make practical distinctions between domestic and cross-border payments will be either eliminated or harmonised (Article 6).

Does your bank apply the rules?

If not, copy this text in your langage and hand it to your bank and DEMAND (it's the law) that they apply it.
See: http://www.europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=MEMO/02/154|0|AGED&lg=EN&display=

Mats


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Astrid Elke Witte  Identity Verified
Germany
Local time: 00:47
Member (2002)
German to English
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British banks do not appear to obey the law Feb 5, 2004

This issue is a very sore point for me. In the middle of July I transferred some money to a British bank account. My German bank said it was part of the regulation that the transfer had to be made in Euros, for no charges to be due on the transfer to either party.

The British bank, however, charged the recipient heavily, stating that Euros were a foreign currency, and it would only not apply charges if the transfer were made in GB Pounds. I am quite certain that the British bank in question broke the law. However, when the recipient complained, they said that their own rules were more important than any European rules!


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DGK T-I  Identity Verified
United Kingdom
Local time: 23:47
Member (2003)
Georgian to English
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British banks in a slightly different situation Feb 6, 2004

The new EU rules mean that a bank should charge no more to transfer Euros (with IBAN & BIC) between banks in two EU countries, than they would to transfer those Euros to/from a bank within their country.
So the charge made by the German bank to send Euros to the UK should be no more than it would be to send Euros within Germany - likely to be relatively cheap or free.
But since the currency in the UK is Sterling not the Euro - and that is the currency which is normally transferred within the UK -the EU regulation doesn't apply in the same way at the British end.
Costs for receiving Euro in a UK Sterling account will vary depending on the amount and the fees charged by the bank - sometimes free, sometimes a small amount, sometimes significant, so it remains something that needs to be thought about in advance. There is also the option of a UK Euro account, although whether this is worthwhile for the receiver to maintain would depend on their circumstances.




Astrid Johnson wrote:

This issue is a very sore point for me. In the middle of July I transferred some money to a British bank account. My German bank said it was part of the regulation that the transfer had to be made in Euros, for no charges to be due on the transfer to either party.

The British bank, however, charged the recipient heavily, stating that Euros were a foreign currency, and it would only not apply charges if the transfer were made in GB Pounds. I am quite certain that the British bank in question broke the law. However, when the recipient complained, they said that their own rules were more important than any European rules!


[Edited at 2004-02-06 00:29]


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Ralf Lemster  Identity Verified
Germany
Local time: 00:47
English to German
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Was the recipient's account a euro account? Feb 6, 2004

Hi Astrid,
In the middle of July I transferred some money to a British bank account.

Was this a bank account in euros?

I regularly execute standard euro payments to colleagues in the UK, but they hold euro accounts (in addition to their usual sterling accounts). No fees charges on either side.

If your recipient only has a sterling account, the directive will not apply (as this will indeed be a foreign currency payment, necessitating a conversion from euros into sterling).

HTH, Ralf


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DGK T-I  Identity Verified
United Kingdom
Local time: 23:47
Member (2003)
Georgian to English
+ ...
Which is not to say that receiving transfers even to a UK sterling accounts is necessarily expensive Feb 6, 2004

it depends on the policy of the UK bank - some don't charge a fee, some do, or only for amounts above a certain amount. The best person to find out about this is the recipient, in advance.
(By a fee, I don't mean the percentage for conversion from Euro to Pounds, which obviously there would be for transfer to a sterling account, but that isn't the heavy bit.)
It doesn't sound from the description as if it was transfer of Euro to a UK Euro account - if it was it would be strange for the bank to have been talking about GBP - you would expect low or no charge for receiving Euro in a UK Euro account.

So don't be put off trading with the UK.
Reasonable arrangements can be made, whether to Euro or Sterling accounts


[Edited at 2004-02-06 16:00]


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