Conformity Assessment of Directive 2007/64/EC BULGARIA

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1 Conformity Assessment of Directive 2007/64/EC BULGARIA Final Report August Tipik Communication Agency S.A. Avenue de Tervueren 270 B-1150 Brussels Tel Fax TVA BE RCB Fortis Tipik is a Sword Group Company Eco-active business Charter signatory

2 The conformity assessment of 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 has been performed under Framework Service Contract No on the Provision of services in connection with the codification of Community law and with the assessment of the conformity of the laws of Member States with Community law. The conformity assessment of Directive 2007/64/EC concerns at this stage 26 Member States as Poland has not been assessed yet in view of its late implementation of the Directive. The national implementing measures notified by the Member States to the European Commission as a result of the Directive transposition process basically represent the scope of and form the background for the assessment. Reports on each Member State were drafted as a result of the assessment performed and they aim to present the main conclusions and observations on the Directive provisions. The first part of these assessment reports present the notified national implementing measures and additional legislation assessed. The second part provides a general conclusion on the conformity assessment and introduces the work performed as well as presenting cases that raise concerns of conformity according to the method used for assessment. The third and final part of the report covers the core of the assessment report. It takes the form of a concordance table, whereby the national provisions implementing the Directive provisions are listed and assessed. In addition, a general report also aims to provide a comprehensive overview of all assessments. The views expressed in the assessment reports and the general report are those of the authors alone. Publication of this report on the Commission's web-site does not mean that the Commission endorses the views expressed and the assessments carried out. The Commission does not guarantee the accuracy of the data included in the reports, nor does it accept responsibility for any use made thereof. Reproduction is authorised provided the source - Tipik Communication Agency SA - is acknowledged.

3 Conformity Assessment of Directive 2007/64/EC BULGARIA GENERAL COMMENTS AND OBSERVATIONS List of the national Implementing Measures (notified to the European Commission) SUMMARY General observations and Comments Закон за платежните услуги и платежните системи, ( ЗПУПC ) (Law on Payment Services and Payment Systems), (hereinafter: ) (last amendment is in OJ 87, ) Административно процесуален кодекс, ( AПК ) (Administrative Procedural Code), (hereinafter: APC ) (last amendment is in OJ 35, ) Закон за кредитните институции, ( ЗКИ ) (Law on Credit Institutions), (hereinafter: LCI ) Обн., ДВ, бр. 59 от г., в сила от г., доп., бр. 105 от г., в сила от г., изм. и доп., бр. 52 от г., в сила от г., изм., бр. 59 от г., в сила от г., бр. 109 от г., в сила от г., бр. 69 от г., изм. и доп., бр. 23 от г., в сила от г., бр. 24 от г., в сила от The Law on Payment Services and Payment Systems is the main national implementing measure. It provides for in the incorporation of payment services institutions and regulates the performance of payment services. The Law on Payment Services and Payment Systems is almost a literal transposition of Directive 2007/64/EC. The Administrative Procedure Code is a very important and significant Bulgarian legislative act, which regulates a large number of issues relating to administrative proceedings before all authorities of the Republic of Bulgaria (cf. Article 1 and Article 2(1) of the APC). This act influences and impacts in many ways the effective application of the measures that transpose Directive 2007/64/EC into the Bulgarian legislation. The Administrative Procedure Code indirectly concerns the transposition of Directive 2007/64/EC into the Bulgarian legislation. This legal act is the act which regulates procedure before general courts and participants rights and duties with regards to such proceedings. To this end, this act regulates the administrative justice and therefore, it is a relevant implementing measure for the review of Bulgarian National Bank decisions as well as the Bank s failure to act. The Law on Credit Institutions indirectly concerns the transposition of Directive 2007/64/EC into the Bulgarian legislation. This legal act contributes to the establishment of the legal framework, which is required for the accurate application of the above mentioned Directive. The Law on Credit Institutions lays down the terms and procedures for authorisation (licensing), taking up and pursuit of the business, supervision and winding up of credit institutions in order to ensure a sound, reliable and secure banking system and safeguard the interests of depositors. Credit institutions are the banks and the electronic money institutions (cf. Art 1(1) and (2) of the LCI). A licence (authorisation) granted by the Bulgarian National Bank (BNB) is required to conduct the business of banking. 1

4 г., бр. 44 от г., в сила от г., изм., бр. 93 от г., в сила от г., бр. 95 от г., в сила от г.(last amendment is in OJ 94, ) Закон за малките и средите предприятия, ( ЗМСП ) (Law on Small and Medium Sized Enterprises), (hereinafter: LSMSE ) (last amendment is in OJ 82, ) The Law on Small and Medium Sized Enterprises indirectly concerns the transposition of Directive 2007/64/EC into the Bulgarian legislation. This legal act contributes to the establishment of the legal framework for small and medium sized enterprises, which is required for the accurate application of the above mentioned Directive. List of additional National Implementing Measures (referred to in the Conformity Assessment) SUMMARY General observations and Comments Закон за електронната търговия, в сила от г., Обн. ДВ. бр.51 от 23 Юни 2006г., изм. ДВ. бр. 105 от 22 Декември 2006г., изм. ДВ. бр.41 от 22 Май 2007г., изм. ДВ. бр.82 от 16 Октомври 2009г., ( ЗЕТ ) (Law on electronic trade, hereinafter: LET ) (last amendment is in OJ 82, ) Наредба 3 от 16 юли 2009 г. за условията и реда за изпълнение на платежните операции и за използване на платежните инструменти, ( Наредба 3 ) (Ordinance No 3 of 16 of July 2009 on procedures for execution of payment transactions and the use of payment instruments), (hereinafter: Ord. 3 ) (last amendment is in OJ 82, ) Наредба 16 от 16 юли 2009 г. за лицензиране на платежните интитуции и операторите на платежни системи, ( Наредба 16 ) The Law on electronic trade indirectly concerns the transposition of Directive 2007/64/EC into the Bulgarian legislation. The LET is a primary law which establishes detailed rules and procedures for the execution of electronic trade. Ordinance No 3 of 16 of July 2009 is the secondary law which establishes detailed rules and procedures for the execution of payment transactions and the use of payment instruments. It is issued by the Bulgarian National Bank and is required for the accurate application of the above mentioned Directive. Ordinance No 16 of 16 of July 2009 is the secondary law which establishes detailed rules and procedures for the licensing of payment institutions and payment systems operators. It is issued by the Bulgarian National Bank and is required for the accurate application of the above mentioned Directive. 2

5 (Ordinance No 16 of 16 of July 2009 licensing payment institutions and payment systems operators), (hereinafter: Ord. 16 ) (last amendment is in OJ 62, ) 3

6 CONCLUSIONS In order to better understand the conclusions made and the scope of application of the National Implementing Measures (hereinafter in the Report referred to as NIMs) used for the analysis, it is necessary to briefly describe the legal framework of the payment services in Bulgaria. Thereafter, a brief explanation regarding the way the NIMs have transposed the Directive 2007/64/EC provisions will be presented. The analysis will be finalised with the main conclusion briefly explaining terminological discrepancies, scope of application and cases of partial conformity. 1. The NIMs and the legal framework for payment services in Bulgaria The Law on Payment Services and Payment Systems is the main national implementing measure. It provides the legal foundation for the creation of an EU-wide single market for payments. The established a modern and comprehensive set of rules which aim to make cross-border payments as easy, efficient and secure as 'national' payments in Bulgaria. The provides the necessary legal platform for the Single Euro Payments Area. The is more descriptive and establishes terms and procedure for the operation of electronic money institutions as well as prudential supervision and procedures for out of court redress. This goes over and above the Directive provision. The single competent authority in Bulgaria is the Bulgarian National Bank. BNB establishes the national register, supervises all the activities of payments service institutions and regulates the performance of payment services. The Law on Payment Services and Payment Systems is almost a literal transposition of Directive 2007/64/EC. All national implementing measures provided do not have the same level of relevance for the assessment of the conformity of Directive 2007/64/EC. The main Bulgarian transposition act is, which is primary legislation. The LCI, LSMSE, APC and LET also contain relevant provisions. Furthermore Ordinances No 3 and 16 are secondary legislation, have interpretive character and are established in order to determine more detailed rules. These legal acts contribute to the establishment of the legal framework, which is required for the accurate application of the above mentioned Directive (for more details see the short description of each one of the NIMs above). The NIMs, provided by the European Commission for the purpose of the analysis, were in readable format and were the most updated versions of the Bulgarian legislation (the versions, which are currently in effect). The texts regarding payment services and payment systems, used for the conformity assessment, were taken from the correlation table provided by DG MARKT and are updated as far as 20 February Main Conclusion: Cases of Non-Conformity/Partial Conformity 2.1. Explanatory note on the assessment: Conformity applies to cases whereby the national provisions follow all requirements of the corresponding Directive provision. Some requirements of the Directive provision may not be explicitly transposed. National provisions can however be considered as conformed as far as the silence does not affect the proper implementation of all requirements and that the missing ones can be inferred. Partial conformity applies to cases whereby the national provisions do not follow all the requirements of the Directive provision, or are silent about requirements which are considered minor but necessary. 4

7 In cases of partial conformity, the interpretation of the national provision does not hamper the proper implementation of the Directive provision as a whole, and, missing requirements cannot be inferred. Non conformity applies to cases whereby the Directive provision is not transposed or the national provisions do not follow either, all requirements of the Directive provision, or, the main ones. In cases of non conformity, the interpretation of the national provisions hamper the proper implementation of the Directive provision as a whole, and missing requirements cannot be inferred either. Also considered are additional requirements and exemptions which hamper the proper implementation of the Directive provision. The cases where there are no headings relate to options laid down by the Directive provision that Member States do not seem to choose to apply, or, to obligations resting upon the European Commission (the Commission) Scope: Overall, Bulgaria has correctly transposed the provisions of the Directive. The national implementing measures go into more depth especially concerning the prudent behaviour and the scope of the surveillance performed by the Bulgarian National Bank. In general, most provisions were almost literally transposed and only some contained slightly different wording. The form taken by the Bulgarian follows the order of the Articles of the Directive and the provisions are arranged and spread according to the content of the subject matter. In many provisions, a difference in terminology exists, which however does not affect the correct interpretation of the Directive Terminology The NIMs did not present any terminological discrepancies or major differences when compared with the terminology used in the Directive. In many provisions, an almost literal approach can be found Provisions that raise issues of non-conformity: No cases of non conformity were found in the Bulgarian report. 2.5 Provisions that raise issues of partial conformity: Article 4(5) of the Directive: SP 1(17) of establishes a definition which limits the scope of the payment transaction that is refer to cash money instead of funds. Article 12(2) of the Directive: Article 137(3) of specifies that the administrative acts shall be reasoned and immediately enforced, but it does not include the conditions on informing those concerned accordingly. Article 17(1)(b) of the Directive: Article 118(2) and (3) of indirectly refer to the control mechanism and methods used by BNB in relation to money laundering and terrorist financing. It does not state explicitly that the payment institution shall communicate the internal control mechanisms to the competent authorities and does not contain a specific reference relating to Directive 2005/60/EC. 2.6 Provisions that could not be identified: All the provisions could be identified 5

8 2.7. Options that Bulgaria has chosen to transpose into its national legislation: - Article 9(2) of Directive 2007/64/EC Calculation of safeguarding requirements when finds can be used for future payment transactions and for non-payment services. - Article 9(3) of Directive 2007/64/EC Application of safeguarding requirements to non hybrid payment institutions. - Article 22(3) of Directive 2007/64/EC Bulgaria implemented the professional secrecy during the supervision of the activities of payment institutions - Article 52(3) of Directive 2007/64/EC Interdiction or limitation of surcharging practises. - Article 53(3) of Directive 2007/64/EC Option not to apply the liability provisions for unauthorised transactions when the payers payment service provider does not have the ability to freeze the payment account or block the payment instrument limited to accounts or instruments not higher than EUR Article 72 of Directive 2007/64/EC Shorter maximum execution times for purely national payment transactions. - Article 88(3) of Directive 2007/64/EC Transitional provision for legal persons that have commenced their activities before 25 December Options that Bulgaria has chosen not to transpose into its national legislation: - Article 2(3) of Directive 2007/64/EC there are no institutions concerning Bulgaria and therefore Bulgaria did not exercise this option. - Article 7(3) of Directive 2007/64/EC Bulgaria exercised the option of not applying the Directive when a payment institution is included in the consolidated supervision of the parent credit institution. - Article 9(4) of Directive 2007/64/EC Bulgaria did not exercise this option on safeguarding provisions. - Article 26(1) of Directive 2007/64/EC Bulgaria did not exercise this option, allowing a waiver of authorisation. - Article 26(4) of Directive 2007/64/EC Limitation of the activities carried out by waived entities. - Article 34(2) of Directive 2007/64/EC Bulgaria did not exercise this option. - Article 45(6) of Directive 2007/64/EC Bulgaria did not apply favourable provisions on termination conditions for framework contracts. - Article 47(3) of Directive 2007/64/EC and 48(3) Provision of information to the payer on paper once a month free of charge. - Article 51(3) of Directive 2007/64/EC) Bulgaria did not apply Title IV to micro-enterprises in the same way as to consumers. 6

9 - Article 51(2) of Directive 2007/64/EC Non application of the out-of-court procedures for non-consumers - Article 53(2) of Directive 2007/64/EC - Increasing of the amounts for national payment transactions along with the increase of amounts for prepaid instruments up to EUR Article 61(3) of Directive 2007/64/EC Bulgaria did not Reduce payer s liability for unauthorised use of payment instrument taking into account the nature of personalised security features of the payment instrument. - Article 88(4) of Directive 2007/64/EC Transitional provision for natural or legal persons that would be eligible for the waiver. 3 List of the Acronyms used in the Report: - APC: Administrative Procedural Code - : Law on Payment Services and Payment Systems - LCI: Law on Credit Institutions - LSMSE: Law on Small and Medium Sized Enterprises - LET: Law on Electronic Trade - Ord. No 3: Ordinance No 3 of 16 of July 2009 on procedures for execution of payment transactions and the use of payment instruments - Ord. No 36: Ordinance of 16 of July 2009 on procedures for execution of payment transactions and the use of payment instruments - BNB: Bulgarian National Bank - The Directive: Directive 2007/64/EC - SP: Supplementary provisions - TFP: Transitional and final provisions - MS: Member State(s) - BGN: Bulgarian national currency is Bulgarian Lev, which is approximately 1 EUR=1,95 LV. 7

10 Article No. EN Act, Article No. EN Conformity Assessment 1(1) TITLE I Subject matter, scope and definitions Article 1 Subject matter, Section II, 3 (1) 3(1) of (1) For the purposes of this Law, 'payment service providers' shall mean: The assessment of this provision is examined below. 1. This Directive lays down the rules in accordance with which Member States shall distinguish the following six categories of payment service provider: 1(1)(a) (a) credit institutions within the meaning of Article 4(1)(a) of Directive 2006/48/EC;, Section II, 3 (1), pt. 1 LCI 2 3 of (1) For the purposes of this Law, 'payment service providers' shall mean: 1. banks within the meaning of the Law on Credit Institutions; 2 of LCI (1) A bank (credit institution) shall be a legal person engaged in the business of receiving deposits or other repayable funds from the public and granting credits or other financing for its own account and at its own risk. Payment services providers within the meaning of Article 3(1), pt. 1 of cover fully the scope of credit institutions under Article 4(1) (a) of Directive 2006/48/EC. The meaning of banks under Article 2 of LCI include the definition of a bank, or an undertaking whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account; or an electronic money institution. (2) A bank may also carry on the following activities, provided that they are included 8

11 in its authorisation (license): 1(1)(b) (b) electronic money institutions within the meaning of Article 1(3)(a) of Directive 2000/46/EC; 3(1), pt. 2 3 of (1) For the purposes of this Law, 'payment service providers' shall mean: 2. electronic money institutions within the meaning of the Law on Credit Institutions; Payment services providers within the meaning of Article 3(1), pt. 2 of the are electronic money institutions within the meaning of the LCI. It includes banks or credit institutions which can issue electronic money. Thus it covers fully the scope of electronic money institutions under Article 1(3)(a) of Directive 2000/46/EC. 1(1)(c) (c) post office giro institutions which are entitled under national law to provide payment services; 3(1), pt. 5 3(1) of 5. persons licensed to provide postal money transfers in compliance with the Law on Postal Services with the exception of paper-based postal money orders. Article 3(1), pt. 5 of transposes Article 1(1)(c) of the Directive and covers the exception of paper based postal money orders. 1(1)(d) (d) payment institutions within the meaning of this Directive; 3(1), pt. 3 3(1) of 3. payment institutions within the meaning of this Law; Article 3(1), pt. 3 of literally transposed Article 1(1)(d). 1(1)(e) (e) the European Central Bank and national central banks when not acting in their capacity as monetary authority or other public authorities; 3(1), pt. 4 3(1) of 4. the European Central Bank and the national central banks of Member States, when not acting in their capacity as monetary authority or other public authorities; Article 3(1), pt. 4 of literally transposed Article 1(1)(e). 1(1)(f) (f) Member States or their regional or local authorities when not acting in their capacity as public authorities. N/A N/A Neither the Bulgarian Member State nor any of its regional or local authorities provide payment services; therefore, this provision is not applicable. It might however be useful to seek clarifications from the Bulgarian Member State. 9

12 1(2) 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. Section I, 1(1) to (8) 1 of This Law shall establish: 1. the requirements to the payment service providers' activity and types of payment services; 2. the terms and procedure for licensing and functioning of payment institutions; Article 1(1) to (8) of the is more descriptive and also establishes terms and procedure for the operation of electronic money institutions as well as prudential supervision and procedures for out of court redress. This goes over and above the Directive provision. 3. the requirements for information provision in payment services; 4. the rights and obligations of the parties in the provision of payment services; 5. the terms and procedure for operation of electronic money institutions; 6. the terms and procedure for licensing and functioning of payment systems; 7. prudential supervision; 8. the procedure for out-of-court redress in connection with the provision of payment services. 2(1) 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 48(1) to (3) 48(1) of (1) The requirements of this Chapter 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 European Community. (2) Where the payment service user is not a consumer, the parties to a payment transaction may agree that Article 49(1), Article 48(1) of explicitly establishes the requirements for both the payer s payment service provider and the payee s payment service provider, or for the sole payment service provider in a payment transaction to be located in the European Community. Therefore Article 2(1) of the Directive has been correctly transposed. It is clear from the Bulgarian provision that it applies only to two-leg payment transactions. 10

13 Community. Article 51(1), Articles 56, 58, 59, 62, 68, 69 and Article 70(1) shall not apply in their relations. The parties may also agree on a time period different from that laid down in Article 55. (3) The Bulgarian National Bank ( BNB ) may lay down in an ordinance the requirements and procedures for the execution of payment transactions and the use of certain payment instruments. 2(2) 2. Titles III and IV shall apply to payment services made in euro or the currency of a Member State outside the euro area. 31(1) and (2) 48(1) 31 of (1) The provisions of this Chapter shall apply to single payment transactions, framework contracts and payment transactions covered by them. (2) The requirements of this Chapter shall apply only where both the payer's payment service provider and/or the payee's payment service provider are, or the sole payment service provider in the payment transaction is, located in the European Community. The provisions of Article 31(1) and (2) and Article 48(1) of transposing Chapters III and IV of the Directive have broader scope and apply for all currencies concerning payment transactions. 48 of (1) The requirements of this Chapter 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 European Community 2(3) 3. Member States may waive the application of all or part of the provisions NA NA Article 2(3) of the Directive sets out an option. Owing to this option, Republic of Bulgaria has not chosen to apply it. 11

14 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. 3 Article 3 Negative scope This Directive shall apply to none of the following: 2(1) 2 of (1) The provisions of this Law shall not apply to: Article 2(1) of literally transposed Article 3 of the Directive. 3(a) (a) payment transactions made exclusively in cash directly from the payer to the payee, without any intermediary intervention; 2(1), pt. 1 2(1) of 1. payment transactions made exclusively in cash directly from the payer to the payee, without any intermediary intervention; Article 2(1), pt. 1 of literally transposed Article 3(a) of the Directive. 3(b) (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; 2(1), pt. 2 2(1) of 2. payment transactions made exclusively in cash 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; Article 2(1) of literally transposed Article 3(b) of the Directive. 3(c) (c) professional physical transport of banknotes and coins, including their collection, processing and delivery; 2(1), pt. 3 2(1) of 3. professional physical transport of banknotes and coins, including their collection, processing and delivery; Article 2(1), pt. 3 of literally transposed Article 3(c) of the Directive. 3(d) (d) payment transactions consisting of the non-professional cash collection and delivery within the framework of a 2(1), pt. 3 2(1) of 4. payment transactions consisting of the non-professional cash collection and Article 2(1), pt. 4 of literally transposed Article 3(d) of 12

15 nonprofit or charitable activity; delivery within the framework of a nonprofit or charitable activity; the Directive. 3(e) (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; 2(1), pt. 5 2(1) of 5. 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; Article 2(1), pt. 5 of literally transposed Article 3(e) of the Directive. 3(f) (f) money exchange business, that is to say, cash-to-cash operations, where the funds are not held on a payment account; 2(1), pt. 6 2(1) of 6. cash-to-cash money exchange operations, where the funds are not held on a payment account; Article 2(1), pt. 6 of literally transposed Article 3(f) of the Directive. 3(g) (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: 2(1), pt. 7 2(1), pt. 7 2(1) of 7. 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: Article 2(1), pt. 7 of literally transposed Article 3(g) of the Directive. 3(g)(i) (i) paper cheques in accordance with the Geneva Convention of 19 March 1931 providing a uniform law for cheques; 2(1), (b) 2(1) of b) paper cheques in accordance with the Geneva Convention of 19 March 1931 providing a uniform law for cheques and paper-based bills of exchange and promissory notes in accordance with the Geneva Convention of 7 June 1930 providing a uniform law for bills of exchange and promissory notes; Article 2(1)(b) of literally transposed Article 3(g)(i) of the Directive and includes also some of the other provisions. 13

16 3(g)(ii) (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; 2(1), (a) 2(1) of a) cheques, paper-based bills of exchange and promissory notes within the meaning of the Commercial Code or the relevant legislation of another Member State which is not party to the Geneva Convention under letter (b); Article 2(1) (a) of literally transposes Article 3(g)(ii) of the Directive. 3(g)(iii) (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; 2(1), (b) 2(1) of b) paper cheques in accordance with the Geneva Convention of 19 March 1931 providing a uniform law for cheques and paper-based bills of exchange and promissory notes in accordance with the Geneva Convention of 7 June 1930 providing a uniform law for bills of exchange and promissory notes; Article 2(1)(b) of duly transposed Article 3(g)(iii) of the Directive, including an additional reference to the Geneva Convention of 19 of March (g)(iv) (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; 2(1), (a) 2(1) of a) cheques, paper-based bills of exchange and promissory notes within the meaning of the Commercial Code or the relevant legislation of another Member State which is not party to the Geneva Convention under letter (b); Article 2(1)(a) of duly implements Article 3(g_(iv) of the Directive. 3(g)(v) (v) paper-based vouchers; 2(1), (c) 2(1) of c) paper-based vouchers; Article 2(1)(c) of literally transposed Article 3(g)(v) of the Directive. (vi) paper-based traveller's cheques; or 2(1), 2(1) of 14

17 3(g)(vi) (d) d) paper-based traveller's cheques; Article 2(1)(d) of literally transposed Article 3(g)(vi) of the Directive. 3(g)(vii) (vii) paper-based postal money orders as defined by the Universal Postal Union; 2(1), (e) 2(1) of e) paper-based postal money orders as defined by the Universal Postal Convention drawn up in Bucharest on 5 October 2004 (ratified by law; SG No 43 of 2006) (SG No 91 of 2006); Article 2(1)(e) of literally transposed Article 3(g)(vii) of the Directive. 3(h) (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; 2(2) 2 of (2) For 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, on the one hand, and payment service providers, on the other hand, as well as providers of services under paragraph 1(9) which are payment system operators, only Chapters Six, Seven, Nine and Ten shall apply. Article 2(2) of duly implements Article 3(h) of the Directive, including an additional reference to payment system operators. 3(i) (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 2(1), pt. 8 2(1) of 8. payment transactions related to securities asset servicing, including dividends, income or other distributions, or redemption or sale, carried out by persons referred to in paragraph 2 or by investment firms, credit institutions, collective investment undertakings or asset management companies providing investment services and any other entities Article 2(1), pt. 8 of literally transposed Article 3(i) of the Directive. 15

18 instruments; allowed to have the custody of financial instruments; 3(j) (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; 2(1), pt. 9 2(1) of 9. 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; Article 2(1), pt. 9 of literally transposed Article 3(j) of the Directive. 3(k) (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; 2(1), pt. 10 2(1) of 10. payment 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 payment service providers or for a limited range of goods or services; Article 2(1), pt. 10 of almost literally transposed Article 3(k) of the Directive, including specific reference to payment services. 3(l) (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 2(1), pt. 11 2(1) of 11. 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 Article 2(1), pt. 11 of literally transposed Article 3(l) of the Directive. 16

19 supplier of the goods and services; does not act only as an intermediary between the payment service user and the supplier of the goods and services; 3(m) (m) payment transactions carried out between payment service providers, their agents or branches for their own account; 2(1), pt. 12 2(1) of 12. payment transactions carried out between payment service providers for their own account, including their agents or branches; Article 2(1), pt. 12 of literally transposed Article 3(m) of the Directive. 3(n) (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 2(1), pt. 13 2(1) of 13. 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; Article 2(1), pt. 13 of literally transposed Article 3(n) of the Directive. 3(o) (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. 2(1), pt. 14 2(1) of 14. 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. Article 2(1), pt. 14 of is almost a literal transposition of Article 3(o) of the Directive, which does not contain a reference to the Annex. However that does not jeopardise its conformity. 4, pt. (1) Article 4 Definitions For the purposes of this Directive, the following definitions shall apply: SP 1(6) SP 1 of Supplementary provisions 1. For the purposes of this Law: 6. 'home Member State' shall mean the SP 1, pt. 6 of duly transposed Article 4(1) of the Directive, i.e home Member State mean the Member State in 17

20 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; Member State in which the payment service provider has its registered office, and if the payment service provider has, under its national law, no registered office, the Member State in which its head office is situated; which the payment service provider has its registered office, and if the payment service provider has, under its national law, no registered office, the Member State in which its head office is situated. 4, pt. (2) 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; SP 1(25) 1 of Supplementary provisions 1. For the purposes of this Law: 25. 'host Member State' shall mean the Member State other than the home Member State in which a payment service provider has a branch or an agent or provides payment services directly; SP 1, pt. 25 of literally transposed Article 4(2) of the Directive. 4, pt. (3) 3. payment service means any business activity listed in the Annex; 4(1) to (7) 4 of Payment services shall mean: 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; Article 4 (1) to (7) of define explicitly the type of business activity, that is services enabling cash flow between accounts, cash withdrawals, execution of all types of payment transactions including the transfer of funds and other activities, which correspond to those listed in the Annex of the Directive. 3. execution of payment transactions, including transfers of funds on a payment 18

21 account with the user's payment service provider or with another payment service provider: a) execution of direct debits, including one-off direct debits; b) execution of payment transactions through a payment card or a similar device; c) 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: a) execution of direct debits, including one-off direct debits; b) execution of payment transactions through a payment card or a similar device; c) 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 19

22 supplier of the goods or services. 4, pt. (4) 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 5 of Payment institution 'Payment institution' shall mean a legal person established in a Member State that has been granted a licence by the competent authorities of his Member State of origin to provide and execute payment services throughout the European Community. Article 5 of establishes the definition of a payment institution including the requirement in Article 10 of the Directive, that is to be established in a MS that has been granted a license by the competent authorities of his MS of origin. 4, pt. (5) 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; SP 1(17) SP 1 of Supplementary provisions 1. For the purposes of this Law: 17. 'payment transaction' shall mean an act, initiated by the payer or by the payee, of placing, transferring or withdrawing cash, irrespective of any underlying obligations between the payer and the payee. PARTIALLY SP 1(17) of establishes a definition which limits the scope of the payment transaction that is to refer to cash money instead of funds. 4, pt. (6) 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; 79(1) Аrt. 79 of Payment system (1) A payment system shall mean a funds transfer system with formal and standardised arrangements and common rules for the processing, clearing and/or settlement of payment transactions. Article 79(1) of is a literal transposition of Article 4(6) of the Directive. Furthermore Article 79(2) define the payment system operator. 4, pt. (7) 7. payer means a natural or legal person who holds a payment account and allows a SP 1(20) SP 1 of 20

23 payment order from that payment account, or, where there is no payment account, a natural or legal person who gives a payment order; Supplementary provisions 1. For the purposes of this Law: 20. 'payer' shall mean 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; SP 1, pt. 20 of literally transposed Article 4(7) of the Directive. 4, pt. (8) 8. payee means a natural or legal person who is the intended recipient of funds which have been the subject of a payment transaction; SP 1(22) SP 1 of Supplementary provisions 1. For the purposes of this Law: 22. 'payee' shall mean a natural or legal person who is the intended final recipient of funds which have been the subject of a payment transaction; SP 1, pt. 22 of literally transposed Article 4(8) of the Directive. 4, pt. (9) 9. payment service provider means bodies referred to in Article 1(1) and legal and natural persons benefiting from the waiver under Article 26; 3(1), (2) and (3) 3 of (1) For the purposes of this Law, 'payment service providers' shall mean: 1. banks within the meaning of the Law on Credit Institutions; 2. electronic money institutions within the meaning of the Law on Credit Institutions; 3. payment institutions within the meaning of this Law; Article 3(1), (2) and (3) of the explicitly refer to all payment service providers according to the Bulgarian legislation instead of referring to Article 1(1) and Article 26 of the Directive. It includes the legal and natural persons who are not payment service providers but under the exception of the activities referred to in Article 2 of he can provide payment services. Therefore Article 3(1), (2) and (3) fully transposed Article 4(9) of the Directive. 4. the European Central Bank and the national central banks of Member States, when not acting in their capacity as monetary authority or other public 21

24 authorities; 5. persons licensed to provide postal money transfers in compliance with the Law on Postal Services with the exception of paper-based postal money orders. (2) Persons who are not payment service providers shall not provide payment services, with the exception of the activities referred to in Article 2. (3) The payment service provider shall not control the purpose and legality of the transaction for which the payment service is provided, unless otherwise provided for by law. 4, pt. (10) 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; SP 1(21) SP 1 of Supplementary provisions 1. For the purposes of this Law: 21. 'payment service user' shall mean a natural or legal person making use of a payment service in the capacity of either payer or payee, or both; SP 1, pt. 21 of literally transposed Article 4(10) of the Directive. 4, pt. (11) 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; SP 1(23) SP 1 of Supplementary provisions 1. For the purposes of this Law: 23. 'consumer' shall mean a natural person who, in payment service contracts, is acting for purposes other than his trade or profession; SP 1, pt. 23 of literally transposed Article 4(11) of the Directive. 22

25 4, pt. (12) 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; Аrt. 40(2) 40(2) of (2) 'Framework contract' shall mean a payment service contract which governs the future execution of individual and successive payment transactions and which may contain the obligations and conditions for opening and keeping a payment account, and which contains at least the prior information referred to in Article 41. Article 40(2) of is more precise than the Directive. It refers to opening and keeping a payment account and includes at least the prior information set for the payment account. 4, pt. (13) 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; SP 1(11) SP 1 of Supplementary provisions 1. For the purposes of this Law: 11. 'money remittance' shall mean 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 the 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; SP 1, pt. 11 of literally transposed Article 4(13) of the Directive. 4, pt. (14) 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; SP 1(18) SP 1 of Supplementary provisions 1. For the purposes of this Law: 18. 'payment account' shall mean an account held in the name of one or more payment service users which is used for the execution of payment transactions; SP 1, pt. 18 of literally transposed Article 4(14) of the Directive. 23

26 4, pt. (15) 15. funds means banknotes and coins, scriptural money and electronic money as defined in Article 1(3)(b) of Directive 2000/46/EC; SP 1(30) LET 1(2) and (3) and 3 SP 1 of Supplementary provisions 1. For the purposes of this Law: 30. 'funds' shall mean banknotes and coins, scriptural money and electronic money; 1 of LET 2) Electronic commerce within the meaning of this Act is to provide information society services. (3) Information society services are those services which are usually reimbursable and provided on a distance using electronic means after explicit statement by the service recipient. SP 1 pt. 30 of is more general in comparison with the Directive and refers to both scriptural money and electronic money. In accordance with Article 1(2) and (3) of the LET electronic commerce is to provide information society services which are usually reimbursable and provided on a distance using electronic means after explicit statement by the service recipient. Furthermore Article 3(1) and (2) of the LET establishes that the service provider is a natural or legal person providing information society services. Therefore, it covers the scope of electronic money under Directive 2000/46/EC. 3 of LET (1) Service provider is a natural or legal person providing information society services. (2) Recipient of services is a natural or legal person who uses information society services in professional or other purposes, including for purposes of seeking information or access to it. 4, pt. (16) 16. payment order means any instruction by a payer or payee to his payment service provider requesting the execution of a payment transaction; SP 1(19) SP 1 of Supplementary provisions 1. For the purposes of this Law: 19. 'payment order' shall mean any instruction by a payer or payee to his SP 1, pt. 19 of literally transposed Article 4(16) of the Directive. 24