The Law of Payment Services in the EU

Transcription

1 EUROPEAN MONOGRAPHS The Law of Payment Services in the EU The EC Directive on Payment Services in the Internal Market Despina Mavromati KLUWER LAW INTERNATIONAL

2 Preface List of Abbreviations xv xvii Part I Introduction 1 Chapter 1 Methodology Used and a Short Guide to This Book 3 Chapter 2 The Financial Integration as an Indicator of the EC Integration and the Importance of Payments 5 Part II Towards the Harmonization of Payments in the Internal Market: The Legal Background 11 Chapter 3 Common Market, Internal Market, Single Market: History and Evolution through the Treaties 13 I. The Major Integrating Steps towards the Completion of the Single Market 13 A. From the Common Market towards the 'Legal Birth' of the Internal Market 13 B. The Single European Act 15 C. Towards the Maastricht Treaty 19

3 viii Table of Contents D. The Treaty of Amsterdam, the Treaty of Nice and the Latest Developments 21 II. The Free Movement of Capital and Payments Set Forth in the EC Treaty 24 A. Evolution of the Free Movement of Capital and Payments 24 B. Article 56 of the EC Treaty 26 C. The Exceptions to the Free Movement of Capital 27 D. Secondary Law on the Freedom of Capital 28 E. The Case Law of the ECJ on the Meaning of Payments and Capital ** The Meaning of Free Movement of Payments The Meaning of the Free Movement of Capital 31 F. Free Movement of Capital and Payments and Other Freedoms 32 III. The Steps towards the Economic and Monetary Union (EMU) 33 A. The Early Initiatives towards a Monetary Union 33 B. The Three Stages for the Completion of the EMU The First Stage of the EMU The Second Stage of the EMU The Third Stage of the EMU 38 C. The Member States and the Introduction of the Euro 41 Chapter 4 The Financial Services Action Plan (FSAP) 45 I. The Facts that Led to the Adoption of the FSAP 45 II. The FSAP and the Developments in the Retail Sector and in Payments 47 A. The Electronic Money Directive (EMD) 48 B. The Communication on E-commerce and Financial Services and the Directive on Distance Marketing of Financial Services 49 C. The Communication on Retail Payments and the Launching of a 'Single Euro Payments Area' 52 D. The Regulation 2560/2001 and the New Consumer Credit Directive 52 E. Towards a New Legal Framework for Payments 53 F. The Communication on the Application to Financial Services of Article 3(4) to 3(6) of the E-commerce Directive G. The Alternative Dispute Resolution for Financial Services H. The FSAP and Retail Payments: Final Remarks III. The FSAP in Other Subsectors A. Mutual Funds and Investment Services B. The Establishment of Committees for the Banking, Insurance and Investment Sector C. Auditing and Accounting

4 ix D. Securities Legislation 59 E. The Revised Framework for Banks and Investment Firms 60 F. The Fraud Prevention Action Plan (FPAP) 61 IV. Beyond the FSAP: The White Paper on European Financial Policy Chapter 5 The Legal Background of the Directive on Payment Services (PSD) 65 I. The Directive 97/5 on Cross-Border Credit Transfers 66 A. Cross-Border Payments 66 B. Towards the Adoption of Directive 97/5 67 C. The Core Provisions of Directive 97/5 68 D. The Study on the Application of Directive 97/5: Some Lessons for the PSD 71 II. Recommendation 97/489 on Electronic Payment Transactions 72 A. The Core Provisions of Recommendation 97/ B. The Application of the Recommendation 97/ III. The Directive 98/26 on Settlement Finality 76 IV. The Regulation 2560/2001 on Cross-Border Payments in Euro 78 A. The Introduction of the Euro as a Catalyst for the Adoption of Regulation 2560/ B. Regulation 2560/2001: The Main Provisions 79 C. The Outcome in Light of the Study on the Application of the Regulation 2560/ Chapter 6 Regulatory Approaches in the Internal Market 85 I. Introduction: Harmonization in the EC 85 II. Minimum and Maximum Harmonization, Internal Market and Financial Services 87 A. Minimum versus Maximum Harmonization 87 B. The Rationale of Minimum Harmonization 91 C. Minimum and Maximum Harmonization: Examples from the Field of Financial Services 93 D. The Choice of a Legal Basis as Indicator of the Harmonization Method: The Paradigm of Financial Services 95 III. Mutual Recognition and Home Country Control 96 A. The Principles of Mutual Recognition and of Home Country Control 96 B. The Application of Mutual Recognition and Home Country Control in the Area of Financial Services Application to the Banking Sector Application to the Investment and the Insurance Sector 103

5 C. Drawbacks of Mutual Recognition 104 D. The Mutual Recognition and the PSD 106 IV. The Top-Down Regulatory Approach for Financial Services 106 A. The Foundations of the 'Comitology Procedure' 106 B. The Four-Level Approach of the Comitology Process 107 C. Assessment of the Lamfalussy Process 109 V. The Principle of Subsidiarity in the Context of Financial Services Legislation 111 A. Foundation within the EC Treaty and Meaning of the Principle of Subsidiarity 111 B. Implementation of the Principle of Subsidiarity in Financial Services 114 C. The Evolution of the Concept of Subsidiarity through the Years 116 Part III The Directive on Payment Services 117 Chapter 7 The Legal Basis of the PSD 119 I. The Sui Generis Nature of the PSD 119 A. Full Harmonization under Article 86 of the PSD 119 B. The Exceptions to the Full Harmonization Scheme under the PSD 120 C. The Dichotomy of Content in the PSD 122 II. The Twofold Legal Basis of the PSD: Article 47 and Article 95 of the EC Treaty 123 A. Legal Basis: Article 47(2): Freedom of Establishment and Its Demarcation from Other Freedoms 125 B. Legal Basis: Article 95 of the EC Treaty 128 C. The Codecision Procedure of Article 251 of the EC Treaty and the PSD 133 D. The New Regulating Approach and the Impact Assessment for the Adoption of the PSD The Different Stages of the Impact Assessment Impact Assessment of the New Legal Framework for Payments 136 Chapter 8 The PSD and Its Scope 141 I. Definitions and Delimitations 141 A. Description of Money 141

6 xi II. B. Payments and Retail Payments 143 C. Means of Payment, Payment Instruments and Payment Systems 146 Payment Services within the Meaning of the PSD and Other Related Directives 149 A. Payment Services, Payment Service Providers and Payment Institutions According to the PSD Payment Services within the Context of the PSD Are Payment Services 'Banking Activities'? Payment Service Providers According to the PSD: The Special Category of Payment Institutions The Negative Scope of the PSD: Cash-to-Cash Transactions and Cheques 154 B. Funds Transfers Meaning of a Funds Transfer Legal Nature of a Funds Transfer 158 C. The Consumer Credit Directive (CCD) and Its Connection to the PSD 160 D. Payments by Card as Payment Services under the PSD 163 E. Electronic Money: The EMD and Its Connection to the PSD 165 F. Payment Transactions by Means of Distance Communication: Some Lessons Taken by the EMD 169 Chapter 9 The Legal Framework for 'Payment Institutions' as Established by the PSD 173 I. Authorization for a Business of a Payment Institution 174 A. The Application for Authorization Pursuant to Article 5 of the PSD 174 B. The Range of Activities of Payment Institutions 178 C. Use of Agents, or Outsourcing of Activities 179 D. Record Keeping of Money Transfers and the Regulation on Information on the Payer Accompanying Transfers of Funds 181 E. The Derogation Clause of Article 26 of the PSD 182 II. Supervision of the Payment Institutions 184 A. Supervision and Information Exchange 184 B. Freedom of Establishment and Freedom to Provide Services in the PSD 186 Chapter 10 Transparency of Conditions for Payment Services Pursuant to the PSD 189 I. Introduction 189 A. The Broader Framework of 'European Contract Law' 189

7 xii Table of Contents 1. Historical Overview The Three Communications on European Contract Law 193 B. Transparency of Conditions for Payment Services in the PSD The Communications on European Contract Law and the PSD Information Requirements in Other Legislative Acts The Structure of the Fourth Title of the PSD 199 II. Framework Contracts under the PSD 202 A. The Notion of a 'Framework Contract' in Connection to Other EC Legal Acts B. Transparency Conditions for Framework Contracts Information to be Provided before the Conclusion of the Framework Contract Changes in Contractual Conditions and Termination of the Framework Contract Unfair Terms within a Framework Contract and the Principle of Transparency 208 C. Single Payment Transactions under a Framework Contract 210 III. Individual Payment Transactions not Covered by a Framework Contract 212 IV. Transparency of Payment Transactions: An Overview 213 Chapter 11 Rights and Obligations of the Parties to a Payment Transaction under the Fourth Title of the PSD 215 I. Structure of the Fourth Title of the PSD 215 A. The Scope of the Fourth Title of the PSD 216 B. The Derogation Clause of the Fourth Title of the PSD 217 II. Liability for Losses from Unauthorized Transactions 218 A. Consent, Transmission of Consent and Withdrawal of Consent under the PSD 218 B. Rights and Obligations of the Parties to a Payment Transaction and Burden of Proof 220 C. Unauthorized Transactions: Liability of the Parties 222 D. Exemption from Liability in Case of 'Gross Negligence' and 'Fraudulent Use' of the Payment Service User 224 III. Strict Liability for Non-execution or Defective Execution of a Payment Transaction 225 A. Date of Receipt of the Payment Order and Execution of a Payment Transaction Receipt of the Payment Order Execution Time and Value Date of a Payment Order 227

8 xiii B. Liability in Case of Non-execution or Defective Execution under Article 75 of the PSD The Scope of Article 75 of the PSD in Conjunction with the Previous Legislative Initiatives Non-execution, Defective Execution and Consequential Damage Exemptions and Limitations from the Strict Liability Why Establish Strict Liability on the Payment Service Providers? 237 IV. Refunds for Authorized Transactions Initiated by or through the Payee 238 A. Irrevocability of a Payment Order and Refund for a Payment Initiated by or through the Payee 'Revocation' and 'Objection to Debit', Revocability and Irrevocability of a Payment Order Irrevocability of a Payment Order under the PSD and the Settlement Finality Directive 240 B. Refunds and Requests for Refunds for Payment Transactions Initiated by or through the Payee Conditions for Refunds The Refunds Right According to the PSD and its Relationship to Other Rights 243 V. Liability of the Payment Service Providers under the PSD: Towards an Excessive Consumer Protection? 244 Chapter 12 Impact of the PSD on Other Directives and Future Perspectives 247 Chapter 13 The Broader Vision of a Single Euro Payments Area (SEPA) 249 Part IV Concluding Remarks: A Critical Overview of the PSD 251 Chapter 14 PSD: A Movement towards Further Integration of the Payments Market or the Repetition of the Fragmented Harmonization Approach? 253 I. The Evolution of the EU Payments Legislation through the Years 253 II. The Dual Legal Basis and the Choice of a Directive for the New Legal Framework for Payment Services 255

9 xiv Table of Contents Chapter 15 A Critique to the Specific Provisions of the PSD 259 I. Authorization Requirements for Payment Institutions 260 II. Transparency and Liability Issues under the PSD 261 III. Final Remarks 263 Appendices 265 I. Table 1: The Payment Services Legislation in the EU and the Related Legal Acts, 265 II. Table 2: Payment Institutions, Payment Services 266 III. Table 3: Payment Services According to the PSD 266 IV. Table 4: Payment Service Providers According to the PSD 267 V. Table 5: Liabilities and Obligations of the Payment Service Providers under the PSD 268 Bibliography 271 I. Books 271 II. Journals 277 III. EC Legislation 283 A. Directives 283 B. Regulations 286 C. Commission Recommendations 287 D. Proposals 287 E. Decisions 288 F. Resolutions 289 G. Communications 289 H. Commission Reports 291 I. Commission Papers 292 J. European Central Bank 292 Table of Cases 293 Index 297