SECTION 5 - FRANCE. 1. Introduction

Transcription

1 SECTION 5 - FRANCE 1. Introduction Law n on savings and financial security (relative à l épargne et à la sécurité financière) was adopted by the French Parliament on June 25, 1999 (the 'Law'). Part II of the Law conrns the reinforment of financial protection systems. Section 78 of the Law (Part II, Chapter V) implements Directive 97/5 EC on Cross-Border Credit Transfers ('the Directive'). Section 78 of the Law has been incorporated as an integral part of the Banking Law n of January 24, 1984 conrning the activity and control of credit institutions. Section 78 of the Law provides a power to the Comité de la Réglementation Bancaire et Financière (Banking and Financial Regulatory Committee) to adopt regulations in implementation of the Law which are applicable to and binding upon credit institutions. On January 24, 1999, the Banking and Financial Regulatory Committee adopted Regulation n ('the Regulation'). The Regulation entered into for on August 14, 1999, the last date for implementation of the Directive. The Regulation was enacted in application of the Banking and Financial Regulatory Committee's regulatory and supervisory powers. These powers derive from Law n of January 24, That law provides that the Banking and Financial Regulatory Committee may enacts measures applicable to and binding upon credit institutions. The Banking and Financial Regulatory Committee is also responsible for ensuring complian with legislation, professional regulations and conduct of credit institutions (and investment undertakings). The Banking and Financial Regulatory Committee's Regulations are, consequently, legally binding upon credit institutions. In Dember 2000, French financial law was codified. Section 78 of the Law is, accordingly, now included in the new French Monetary and Financial Code ('the Financial Code') as Section L Together, the Law (codified as Section L 133-1) and the Regulation represent the first statutory regime for Fran governing paper-based and electronic crossborder credit transfers. 2. Transposition Table A table appears at page 11 below outlining the provisions of the Regulations corresponding to those of the Directive. 3. Key Differens between Directive 97/5 and the Regulation French implementing legislation reflects both the spirit and wording of the Directive. The most notable differen between the two regimes lies in the fact that French legislation introdus a regime of no-fault liability. Such a system is still somewhat exptional for the French legal system. The system of no-fault liability applicable to cross-border credit 1

2 transfers does not, of course, exclude a separate action based on the fault of the credit institution. Section L provides that the Banking and Financial Regulatory Committee has powers to adopt implementing provisions to give further effect to Section L These powers were exercised in adoption of the Regulation. Obligations of intermediary institutions in the event of failed cross-border credit transfers are not extensively regulated in French implementing legislation. Liability is imposed generally - upon institutions with which customers (i.e. either the originator or beneficiary of a crossborder credit transfer) have contractual links. The relationship between an intermediary institution and the originating or beneficiary institution are not directly regulated by French legislation implementing the Directive. The conpt of a 'value date' does not appear expressly in the Regulation, although the conpt is well known to, and used in practi by, French credit institutions. In addition, French implementing legislation makes no explicit referen to the exchange rate applicable to a cross-border credit transfer and, instead, simply refers to the criteria for calculation of the exchange rates used. The implementing legislation also fails to refer to the Money Laundering Directive (Directive 91/308/EEC) as required by 9 of the Directive. 10 of the Directive requiring Member States to ensure that there are effective and adequate complaints and redress produres has not yet been transposed (see also 5. below). A number of provisions are included in French implementing legislation which go beyond the terms of the Directive: a specific time period is provided in relation to provision of information to the customer subsequent to the request for a cross-border credit transfer; the beneficiary possesses an express right to compensation for late cross-border credit transfers; no exemption is provided to credit institutions from the obligation to pay compensation for delays in completion of credit transfers - even where the delay was attributable to the originator himself, or to the beneficiary (although it should be noted that the credit institution's exemption is retained in cases of non-execution of cross-border credit transfers); French implementing legislation specifies that the amount of the refunds must include the amount of the cross-border credit transfer plus costs, and a specified interest rate, for a determined period of time. A tabulated summary of the main differens between French implementing legislation and the Directive appears at Sections 3.1 and 3.2 below. Section 3.3 describes those provisions of the French implementing legislation which stem from legislative instruments other than the Directive. 2

3 3.1 Provisions Which Have Not Been Adequately Transposed into National Law Directive 97/5 National Provisions Comment on Differen 2: provides a definition of 'intermediary institution'. The conpt of 'intermediary institution' is used, but no definition is provided. In practi, the definition of 'intermediary institution' derives from French banking practi, and is unlikely to differ from the definition laid down in the Directive. 2: provides a definition of 'cross border credit transfer'. The conpt of 'cross border credit transfer' is used, but no definition is provided. The definition used in Fran derives from French banking practi. 2: provides a definition of 'originator'. The conpt of 'originator' is used, but no definition is provided. The definition used in Fran derives from French banking practi. 2: provides a definition of 'beneficiary'. The conpt of 'beneficiary' is used, but no definition is provided. The definition used in Fran derives from French banking practi. 2: provides a definition of 'customer'. The conpt of 'customer' is used, but no definition is provided. The definition used in Fran derives from French banking practi. 3: provides for a 'value date' where French implementing legislation includes no The 'value date' will be that generally applied as a matter of applied by the institution. 3: requires an indication of the referen exchange rate used. 4: provides for the use of a 'value date' where applied by the credit institution. 4: relates to the obligation to communicate the exchange rate. 8: requires intermediary institutions having acpted a credit transfer to respect the obligation to refund the amount of the crossborder credit transfer including costs and interest to the institution which instructed it to carry out the order. express provision relating to the 'value date'. s 3 and 4 of the Regulation require referen to the criteria for calculation of exchange rates. 4 (c): refers to the date when the client account has been debited; 4 (d) refers to the date when the beneficiary account has been credited. s 3 and 4 of the Regulation refer to the criteria against which exchange rates are calculated. No equivalent provision. banking practi. This does not appear to constitute strict transposition of the Directive. The 'value date' will be defined by French banking practi, namely, the date identified by the institution as the date of credit (in practi one day later than the actual credit) or of debit (in practi several days before the actual transaction). This appears to be an omission in French implementing legislation. French implementing legislation is silent in this regard. 3

4 Directive 97/5 National Provisions Comment on Differen 9 provides that the situation of for majeure, as defined by the Directive, is without prejudi to Directive 91/308/EEC on Money Laundering. No equivalent provision. Express referen to Directive 91/308/EEC has been omitted from the Act. 10 of the Directive requiring Member States to ensure that there are effective and adequate complaints and redress produres No equivalent provision. French implementing legislation is silent in this regard. 4

5 3.2 Provisions which go Beyond the Scope of the Directive Directive 97/5 National Provisions Comment on Differen 4: relates to the provision of information in writing / electronic means and in a readily comprehensible form. 4: relates to the amount of all charges and commission fees payable by the customer. 6: requires the originator s institution to compensate the originator for late transfers. 6: states that no compensation is payable by an institution when the delay is attributable to the originator or the beneficiary. 7: provides that where a breach of the duty to execute a transfer is due to the beneficiary institution, the beneficiary institution is liable to credit the beneficiary at his own cost. The Regulation provides greater detail on the form and timing of the provision of the information (laying down a maximum of two months for the institution to provide the customer with the subsequent information). 4 of the Regulation: refers to the amount of all charges and commission fees payable as well as any other charges, if any, applied by the institution. 9 of the Regulation: compensation is calculated for a specified period of time - applicable both to the originator and the beneficiary. The Regulation does not contain such exclusion from the obligation to pay compensation for late transfers, but does retain that exemption where delays are not performed at all. Under French implementing legislation the refund must include the amount of the transfer, the costs incurred and the application of the statutory interest rate between the date of acptan of the transfer and the date of payment. A time period of two months within which a credit institution must furnish the customer with the information is more specific than the terms of the Directive. French implementing legislation appears to be more detailed than the Directive - as it foresees the possibility of other charges. French implementing legislation provides rights also in relation to the beneficiary who has expressly stated rights to obtain compensation for late transfers. French legislation establishes a statutory no-fault liability regime. French implementing legislation is more detailed than the Directive in relation to calculation of refunds. 5

6 3.3 Provisions which Stem from Other Legislative Acts Directive 97/5 National Provisions Comment on Differen 6: provides for payment of compensation, and the time period taken into account for the calculation of compensation. Under French implementing legislation, delays in the execution of transfers will create rights for customers even without any fault on the part of the credit institution. French law provides specific rules on the time periods for and conditions of payment of compensation. A no-fault liability regime is established. In addition to the statutory no-fault regime, generally applicable principles of French law will apply including the fault-liability regime of the Civil Code. 9: for majeure requirement. No equivalent provision. No specific provision is needed in the transposition text. The conpt of for majeure is a generally applicable principle of French contract law. 6

7 3.4 Comments Section L133-1 and the Regulation seem to be in keeping with the essential thrust of the Directive. There would not appear to be any fundamental discrepancies between these two instruments and the Directive. The limited number of differens listed above would seem unlikely to give cause for action by the European Commission, as they are broadly in keeping with the aim of the Directive of enabling rapid, reliable and cheap credit transfers and are not unduly restrictive. The aim of the provisions going beyond the Directive is to give improved protection to the customer/consumer. 4. Jurispruden As indicated above, implementation of the Directive has resulted in the adoption of the first statutory regime for paper-based and electronic cross-border transfers. To date, perhaps unsurprisingly given the date of adoption of the Regulation, there has been no case law on interpretation of either French implementing legislation or the Directive itself. 5. Existing Complaints and Redress Produres 5.1 Introduction The Regulation deals with the provision of information to customers prior to the performan of cross-border credit transfers. 3 of the Regulation also makes provision for complaints and redress produres, although the Regulation does not establish a new system of complaints / redress produres. In the past, the French Association of Banks (Association Française des Banques) has attempted to establish a mediation system applicable to credit institutions (based on a similar mediation system in pla in the insuran sector, and established on the initiative of the French Federation of Insuran Undertakings (Fédération Française des Sociétés d Assuran)). As a result of the failure to establish a mediation pross applicable to credit institutions, a number of individual credit institutions have decided to designate individual mediators (see Section 5.2 below). In early 2001, the French Association of Banks became the French Banking Federation (Fédération Bancaire Française). This organisation now represents both commercial credit institutions and 'mutual' and co-operative credit institutions. A draft Bill has been presented to the French Parliament which includes provisions on mediation in the framework of financial transactions - and which would create the system of complaints and redress systems required by the Directive. Although individual mediation systems differ in their rules of operation, generally mediation will imply that both the credit institution and the customer must acpt the decisions of the mediator (although individual complainants will always retain the right to initiate court 7

8 proedings on the same facts). In practi, some mediation systems established by individual credit institutions are non-binding (see Section 5.2 below). 5.2 Individual initiatives According to the Fédération des Banques Françaises, Crédit Lyonnais, Société Générale, la Banque pour le Développement des PME and La Poste are credit institutions which have set up individual mediation initiatives. By way of illustration, three of these systems are described below Crédit Lyonnais Crédit Lyonnais was the first French credit institution to acpt an independent mediator in order to resolve complaints raised by its customers. The bank applies 'best efforts' in order to resolve customer complaints. At an initial stage, the customer discusses his problem with the customer servi department of his branch. Subsequently, complaints may be passed to the Communication and Quality Department of Crédit Lyonnais, and eventually to the Central Management of Crédit Lyonnais. If the dispute remains unsolved, it may be submitted to a mediator, without prejudi to the customer's right to initiate court proedings. However, on court proedings are initiated the mediator will no longer be competent to rule on the complaint. Where competent, the mediator delivers its (reasoned) decision in writing. This decision will include recommendations for resolving the complaint, although the opinion of the Crédit Lyonnais mediator is not binding upon the parties Société Générale Its Chief Executive Offir appoints the mediator of Société Générale. The mediator is a person not associated with Société Générale, with competen in the sector. The Société Générale mediator is not competent for complaints relating to the general strategy of the bank, or conrning the financial performan of products linked to specific markets. Complaints may be submitted by any natural person seeking to defend its private (i.e. noncommercial) interests. The Société Générale mediator is competent to examine complaints where earlier efforts to resolve the dispute 'amicably' (i.e. through the customer servi department of the branch conrned) have failed. Decisions of the mediator are not legally binding, although the bank itself tends to acpt them La Poste In 1995, La Poste established a mediation system for disputes relating both to its mail activities as well as to its financial activities. The 1995 system updates a pre-existing Protocol agreed between La Poste and the French consumers association in The mediator of La Poste is competent to examine complaints where internal and noncontentious (i.e. non-judicial) attempts to resolve the dispute have failed. In addition, the mediator is competent in all cases where La Poste has failed to respond to a complaint within 8

9 two months or more when it is a non-domestic matter. A complaint to the mediator of La Poste is without prejudi to a customer's right to bring a legal action based on the same facts. The mediator has jurisdiction to deal with complaints from: (i) (ii) (iii) (iv) individuals, applying through consumer organisations; professionals and commercial undertakings; selected directors of La Poste itself; public organisations. The La Poste mediator has powers to request documentation, and to investigate offis of La Poste. The mediator may make suggestions for resolving the complaint. The mediator will deliver its opinion within two months from the date the complaint is filed. The decision is not binding upon either party. However, if La Poste refuses to be bound by the decision, it must communicate this position (via the La Poste Director, or General Director) to the consumers association, and to the mediator himself. 6. Future Complaints and Redress Produres A Bill is currently before the French Parliament to reform, inter alia, rtain aspects of the banking/customer relationship. More specifically, Title II of the Bill is entitled 'improving the relationships between banks and their clients', and provides that credit institutions must appoint one or more mediators. The Bill lays down rtain minimum requirements to be followed by credit institutions' mediation systems. For example, mediators will be required to deliver an opinion on a complaint within two months. In addition, the Bill would provide that eviden obtained during the mediation pross may not be used before the courts unless the other party agrees. All mediation will be free of charge. The Bill will require that each mediator send the Governor of the Bank of Fran (and the President of the Consultative Committee set up by L of the Financial Code) an annual report reporting on the results of the mediation system. The Bill also provides for the establishment of a Banking Mediation Committee to examine mediators' annual reports. According to the Bill the Committee will draft a 'mediation statement' to provide guidan to credit institutions. The Committee will also be empowered to issue recommendations to credit institutions and mediators. 9

10 7. Stakeholder Opinion on the Regulations and the Directive 7.1 Redress Systems Three of the private mediation systems described above responded to the Questionnaire on the operation of the Directive over the preding twelve months. the Banque du Développement des PME ('BDPME') does not serve private customers. In relation to its commercial customers, the BDPME indicated that it had reived no complaints relating to cross-border credit transfers; the mediation system of Crédit Lyonnais confirmed that no complaints had been reived in relation to cross-border credit transfers; the mediation system of Société Générale also confirmed that no complaints had been reived in relation to cross-border credit transfers. In practi, the mediators tend to direct comments and observations to the customer servi department of the relevant branch. These contacts are considered to be frequently sucssful in finding a solution to complaints - as a result of which the number of cases in which mediators must deliver a formal opinion are redud. 7.2 Stakeholder Research Respondents to the Stakeholder Questionnaire confirmed the absen of a redress scheme pursuant to. A good level of awareness was, however, demonstrated of the fact that some individual credit institutions have established their own complaint/redress schemes. Respondents noted the frequency of complaints conrning the costs of crossborder credit transfers, as well as the delays and errors occurring in performing cross-border credit transfers. One respondent called for the broadcast of television commercials informing consumers of the costs and delays involved in making cross-border credit transfers. 8. Contacts Crédit Lyonnais mediator : Mr. Pierre RIVIERE Crédit Lyonnais 5 Pla de la Pyramide PARIS LA DEFENSE Tel:

11 Société Générale, mediator: Mrs. SCRIVENER Servi relations avec la clientèle Tour SG PAEN/SRC PARIS LA DEFENSE Tel: Banque du Développement des PMEs, mediator Mr. Gérard LOUSTAU Avenue du Général Leclerc MAISON ALFORT Tel: La Poste, mediator Mr. François ARON 21 Rue Richelieu PARIS Tel:

12 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability Scope A: 1 The provisions of this Directive shall apply to cross-border credit transfers in the currencies of the Member States and the EURO up to the equivalent of EURO ordered by persons other than those referred to in 2 (a), (b) and (c) and executed by credit institutions or other institutions. A: 2 N: a Definitions For the purpose of this directive: 'credit institution' means an institution as defined in 1 of Council Directive 77/780/EEC and includes branches, within the meaning of the third indent of that article and located in the Community, of credit institutions which have their head offis outside the Community and which by way of business execute cross-border credit transfers; N P:1 L A:1 P:1- P:2 N P:1 L A = article; P = paragraph; S = senten; N = number; 12 Credit institutions, investment undertakings, branches in Fran of foreign credit institutions, foreign investment undertakings, foreign financial undertakings, the Treasury, financial servis of La Poste, the Bank of Fran, emitting institute of French overseas territories (Institut d émission des départements d outre-mer et Institut d émission d outre-mer), deposits and consignments fund (Caisse des dépôts et consignations) comply with the following provisions when they execute crossborder credit transfers within the EEA, in the currency of one of the States belonging to the EEA, ordered by clients or to their benefit. The amount of transfers is as a maximum equal to the equivalent of 50,000. Credit institutions, investment undertakings, branches in Fran of foreign credit institutions, foreign investment undertakings, foreign financial undertakings, the Treasury, financial servis of La Poste, the Bank of Fran, emitting institute of French overseas territories (Institut d'émission des départements d'outre-mer et Institut d'émission d'outre-mer), deposits and consignments fund (Caisse des dépôts et consignations) comply with the following provisions when they execute cross- L133-1 provides a definition of the persons ordering a cross-border credit transfer. The definition is broader than the Directive. L133-1 expressly adds other specific institutions for the sake of clearness and completeness as permitted by the Directive. French law lists the entities required to comply with the rules on crossborder credit transfers within the EEA. However, the French texts on cross border credit

13 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A: 2 N: b A: 2 N: c 'other institution' means any natural or legal person, other than a credit institution, that by way of business executes cross-border credit transfers; 'financial institution' means an institution as defined in 4 (1) of Council Regulation (EC) No 3604/93 of 13 Dember 1993 specifying definitions for the application of the prohibition of privileged acss referred to in 104a of the Treaty; A:1 P:2 1 A = article; P = paragraph; S = senten; N = number; 13 N N P:1 L133-1 border credit transfers within the EEA, in the currency of one of the States belonging to the EEA, ordered by clients or to their benefit. While executing these transfers, credit institutions, investment undertakings and branches of credit institutions, investment undertakings or foreign financial institutions located in Fran must comply with the provisions defined in the Regulation. No equivalent provision. Credit institutions, investment undertakings, branches in Fran of foreign credit institutions, foreign investment undertakings, foreign financial undertakings, the Treasury, financial servis of La Poste, the Bank of Fran, emitting institute of French overseas territories (Institut d'émission des départements d'outre-mer et Institut d'émission d'outre-mer), deposits and consignments fund (Caisse des dépôts et consignations) comply with the following provisions when they execute crossborder credit transfers within the EEA, in the currency of one of the States belonging to the EEA, ordered by clients or to their benefit. transfer do not define credit institutions, financial institutions, or investment companies. They implicitly refer to the definitions provided in the Financial Code. L133-1 refers to foreign financial institutions but does not include wording for French financial institutions. Foreign financial institutions are defined in Section L of the Financial Code as non-credit

14 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A: 2 N: d A: 2 N: e 'institution' means a credit institution or other institution; for the purposes of s 6, 7 and 8, branches of one credit institution situated in different Member States which participate in the execution of a cross border transfer shall be regarded as separate institutions; 'intermediary institution' means an institution which is neither that of the originator nor that of the beneficiary and which participates in the execution of a cross-border credit transfer; A:1 Transfers which are as a maximum the countervalue of 50,000. institutions. N No provision. No definition as such is provided in the Financial Code. The Financial Code provides a list of the transactions that each type of institution is entitled to execute. In doing so, the Financial Code lists authorised activities of credit institutions and financial undertakings as well as different definitions of specific institutions. N N:3 L 'intermediary institution' is not defined in the No express Financial Code or in the Regulation, but the definition. It is a N:4 expression is used in L matter of banking L133-1 practi. 1 A = article; P = paragraph; S = senten; N = number; 14

15 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A: 2 N: f A: 2 N: g A: 2 N: h A: 2 N: I 'cross-border credit transfer' means a transaction carried out on the initiative of an originator via an institution or its branch in one Member State, with a view to making available an amount of money to a beneficiary at an institution or its branch in another Member State; the originator and the beneficiary may be one and the same person; 'cross-border credit transfer order' means an unconditional instruction in any form, given directly by an originator to an institution to execute a cross-border credit transfer; 'originator' means a natural or legal person that orders the making of a cross-border credit transfer to a beneficiary; 'beneficiary' means the final recipient of a cross-border credit transfer for whom the corresponding funds are made available in an account to which he has acss; N N N N:3 L133-1 A:4 A:8 P2 A:9 N1 N N:1 L133-1 N:2 L133-1 N:3 L133-1 'cross-border credit transfer' is not defined in the Financial Code or in the Regulation. Transfer is not defined either. No provision. 'originator' is not defined in the Financial Code or in the Regulation. 'beneficiary' is used but not defined in the Financial Code or in the Regulation. No express definition. It is a matter of banking practi. 1 A = article; P = paragraph; S = senten; N = number; 15

16 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A: 2 N: j A: 2 N: k 'customer' means the originator or the beneficiary, as the context may require; 'referen interest rate' means an interest rate representing compensation and established in accordan with the rules laid down by the Member State in which the establishment which must pay the compensation to the customer is situated; A:3 A:4 A:8 P2 N P:1 L133-1 A:3 A:44 N A:9 P:1 A:1 'customer' is used but not defined in the Financial Code or in the Regulation. The compensation for delays in executing cross border credit transfers is calculated by the implementation of the statutory interest rate to the amount of the transfer for the period of the delay which is defined as follows The refund for the non execution of the transfer is constituted of the amount of the non executed transfer, plus on the one hand, the amount of the costs due to this transaction and on the other hand, the implementation of the statutory interest rate to the amount of the transfer for the period expressed in days between the date of acptan of the transfer and the date of the payment of this amount. This refund is capped at euro. 'referen interest rate' is not used as such by L133-1 and the Regulation. The Regulation uses the statutory interest rate which is defined in Law n of 11 July, 1975, and which is widely used. The statutory interest rate is annually changed by Decree and is an average of the return for the last twelve months of the thirteen-weeks- 1 A = article; P = paragraph; S = senten; N = number; 16

17 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A: 2 N: l 'date of acptan' means the date of fulfilment of all the conditions required by the institution as to the execution of the cross-border credit transfer order and relating to the availability of adequate financial cover and the information required to execute that order. N A:2 'date of acptan' means, in relation to a crossborder credit transfer, the date upon which the conditions required by an institution to execute the transfer are fulfilled. These conditions are: the existen in advan of an available and sufficient financial cover; the information nessary for the execution of the order including information nessary for checks and required by statute. fixed-rate bonds of the Treasury. In Court proedings, it may be increased by five points after the expiry of a twomonth period. This is in complian with the Directive which allows for rules to be established by the Member State. The nessary information to execute the order is copied from the Directive. The checks required by statute are normal business requirements for any order given by a client to his bank. 1 A = article; P = paragraph; S = senten; N = number; 17

18 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A: 3 S: 1 Prior information on conditions for cross-border credit transfers The institutions shall make available to their actual and prospective customers in writing, including where appropriate by electronic means, and in a readily comprehensible form, information on conditions for cross-border credit transfers. This information shall include at least: N A:3 P:1 A:6 A:7 The institution must inform its customers in advan in writing. Institutions may include such information in the general conditions. The information may be provided by electronic means with the agreement of the customer. The information provided in advan by the institutions to customers is contractually binding for the execution of the transactions defined in the text. A: 3 S: 2 A: 3 S: 3 A: 3 S: 4 -indication of the time needed, when a cross-border credit transfer order given to the institution is executed, for the funds to be credited to the account of the beneficiary s institution; the start of that period must be clearly indicated, -indication of the time needed, upon reipt of a cross-border credit transfer, for the funds to be credited to the account of the institution to be credited to the beneficiary's account, -the manner of calculation of any commission fees and charges payable by the customer to the institution, including N A: 3 P:3 N A:3 P: 4 N A:3 P: 5 Prior information must include: (a) for transfers which have been issued, the maximum time period between the date of acptan and the date when the beneficiary account has been credited; (b) for reived transfers, the maximum time period between the date of reipt of the funds by the institution holding the beneficiary bank account and the date when the beneficiary account is credited; (c) the calculation of the commission fees and charges payable by the customer. 1 A = article; P = paragraph; S = senten; N = number; 18

19 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A: 3 S: 5 A: 3 S: 6 A: 3 S: 7 A: 4 S: 1 where appropriate the rates, -the value date, if any, applied by the institution, -details of the complaint and redress produres available to the customer and arrangements for acss to them, -indication of the referen exchange rates used. Information subsequent to a crossborder credit transfer The institutions shall supply their customers, unless the latter expressly forgo this, subsequent to the execution or reipt of a cross-border credit transfer, with clear information in writing, including where appropriate by electronic means, and in a readily comprehensible form. This information shall include at least: N No referen to the value date is made. Dates of value are generally applied by institutions. Therefore, it should appear in the text. N A:3 P:6 (d) the complaint and redress produre available; No specific complaint and redress produres are available to customers for cross border transfers (see sections 5 and 6 above). N (e) as the case may be, the conditions under which the exchange rates are calculated for the execution of the transfer order. N A:4 Institutions inform their clients in writing subsequently to each transaction carried out under the Regulation. This information must be communicated to the client or be put at its disposal by means of a specific noti in each bank statement sent. The information must be clearly detailed and linked to each relevant transaction. Information must be communicated at The Regulation is more detailed on the forms and timing of the information. It states a maximum period of two months which does not appear in the 1 A = article; P = paragraph; S = senten; N = number; 19

20 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability the latest two months after the execution of the transaction. Directive. Institutions must provide the client with the following information: A: 4 S: 1 A: 4 S: 1 A: 4 S: 1 -a referen enabling the customer to identify the cross-border credit transfer, -the original amount of the cross-border credit transfer, -the amount of all charges and commission fees payable by the customer, A:6 The information may be also provided by electronic means. N A:4 Institutions inform their clients in writing subsequently to each transaction carried out under the Regulation. N A:4 P:2 N A:4 P:3 This information must be communicated to the client or be put at its disposal by means of a specific noti in each bank statement sent. The information must be clearly detailed and linked to each relevant transaction. Information must be communicated at the latest two months after the execution of the transaction. (a) the amount of the cross-border credit transfer as it appears in the order of transfer given by the client; (b) the amount of all charges and commission fees payable as well as any other charges, if any, applied by the institution. This is an equivalent provision with the two-month period which goes beyond the Directive. This is more complete than the Directive as it foresees the possibility of other charges. 1 A = article; P = paragraph; S = senten; N = number; 20

21 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A: 4 S: 1 -the value date, if any, applied by the institution. N A: 4 P: 4 P:5 (c) the date when the client account has been debited; (d) the date when the client account has been credited. The value date is generally the date when the recording on an account enters into effect whether it is a credit or a debit. Debit transactions have a value one or several days before their recording on an account whereas credit transactions have a value one or several days after their recording on an account. Under the Regulation, banks are not required to state the value date (if any) as it is not required by statute. A: 4 S: 2 Where the originator has specified that the charges for the cross-border credit transfer are to be wholly or partly borne by the N A:3 P:1 P:5 Prior to the cross-border credit transfer, the institutions must inform their customers about conditions for the cross-border credit transfers. This 1 A = article; P = paragraph; S = senten; N = number; 21

22 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability beneficiary, the latter shall be informed thereof by his own institution. information may be communicated in the framework of the general conditions. A:4 P:3 Institutions communicate in writing to their client, after each cross-border credit transfer the following information: The amount of all costs and fees and any other remuneration, if any, applied by the institution A: 4 S: 3 Where any amount has been converted, the institution which converted it shall inform its customer of the exchange rate used. Specific undertakings by the institution A: 5 Unless it does not wish to do business with that customer, an institution must at a customer's request, for a cross-border credit transfer with stated specifications, give an undertaking conrning the time needed for execution of the transfer and the A:8 N A:3 P:7 A:4 N A:3 P:1 1 A = article; P = paragraph; S = senten; N = number; 22 The relevant institutions must execute the orders for transfers that they acpted for their full amount, expt if the originator specified that costs and charges of the transfer were to be fully or partially borne by the beneficiary. As the case may be, the criteria under which the exchange rates or rates are determined for the execution of the order of transfer. As the case may be, the exchange rate used. Prior to the cross-border credit transfer, the institutions must inform their customers about conditions for the cross-border credit transfers. This information may be communicated in the framework of the general conditions. The information on the exchange rate used is not compulsory under French provisions ('as the case may be'). Information provided in advan by the institutions is sufficient, as this complies with the

23 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability commission fees and charges payable, apart from those relating to the exchange rate used. A:3 P:2 A:3 P:3 Specifically, this information must mention the following: (a) for transfers which have been issued, the maximum time period between the date of acptan and the date when the beneficiary account has been credited; requirements laid down in 5 of the Directive. A:3 P:4 (b) for reived transfers, the maximum time period between the date of reipt of the funds by the institution holding the beneficiary bank account and the date when the beneficiary account is credited; A: 6 P: 1 S: 1 Obligations regarding time taken The originator's institution shall execute the cross-border credit transfer in question within the time limit agreed with the originator. A: 3 P:5 N A:3 P:3 (c) the calculation of the commission fees and charges payable by the customer. (a) for transfers which have been issued, the maximum time period between the date of acptan and the date when the beneficiary account has been credited; A:3 P:4 (b) for reived transfers, the maximum time period between the date of reipt of the funds by the institution holding the beneficiary bank account and the date when the beneficiary account is credited; A:4 P:4 For the originator, the date of debit on the account. 1 A = article; P = paragraph; S = senten; N = number; 23

24 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A:4 P:5 For the beneficiary, the date of credit on the account. A: 6 P: 1 S: 2 Where the agreed time limit is not complied with or, in the absen of any such time limit, where, at the end of the fifth banking business day following the date of acptan of the cross-border credit transfer order, the funds have not been credited to the account of the beneficiary's institution, the originator's institution shall compensate the originator. A:7 N N:1 L133-1 A:9 P:1 A:9 N: 1 The prior information provided by the institutions to the customer is contractually binding for the execution of transactions defined in the text. Delays in the execution of cross-border credit transfers for an amount fixed by the Regulatory Banking and Financial Committee give rights, even without any fault, and without prejudi to the normal basis of claims and no later than fourteen business days after the execution of the transfer, to compensation whose calculation is defined in the Regulation. The compensation is calculated for the period of delay as such: (1) for the originator, the delay which gives rights to compensation from his institution is defined as the period, in days, between on the one hand, the end of the delay agreed at 3 for issued transfers, or in the absen of such period the end of the fifth banking business day following the date of acptan of the transfer order as defined in 2 of the Regulation and, on the other hand, the date when the funds have been credited on the account of the beneficiary institution; L 133-1(1) establishes the principle of compensation. For the originator, the Regulation mainly copies the Directive, particularly, the fifth banking business day default period. The Regulation adds provisions for delays affecting the beneficiary. 1 A = article; P = paragraph; S = senten; N = number; 24

25 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A: 6 P: 1 S: 3 Compensation shall comprise the payment of interest calculated by applying the referen rate of interest to the amount of the cross-border credit transfer for the period from: -the end of the agreed time limit or, in the absen of any such time limit, the end of the fifth banking business day following the date of acptan of the cross-border credit transfer order, to -the date on which the funds are credited to the account of the beneficiary's institution. A:9 N:2 N N:1 L133-1 A: 9 P:1 A:9 N: 1 (b) For the beneficiary, the delay which gives rights to compensation from its institution is defined as the period, in days, between on the one hand, the end of the period agreed at 3 for reived transfers, or in the absen of such period, the end of the banking business day which follows the date the funds have been credited on the account of the beneficiary institution, and on the other hand, the date when the funds have been credited on the beneficiary s account. Delays in the execution of cross-border credit transfers for an amount fixed by the Regulatory Banking and Financial Committee give rights, even without any fault, and without prejudi to the normal basis of claims and no later than fourteen business days after the execution of the transfer, to compensation whose calculation is defined in the Regulation. Compensation for the delay in executing cross border credit transfers is calculated by application of the statutory interest rate to the amount of the transfer for the delay period defined as: (1) for the originator, the delay which gives rights to compensation from its institution is defined as the period, in days, between on the one hand, the end of the delay agreed at 3 for issued crossborder credit transfers, or in the absen of such L133-1 grants a broad right to compensation as it is not subject to fault. The eviden of fault is always difficult for customers. L133-1 sets up a very strict regime for banks which must pay the originator or the beneficiary within a defined period of time. This does not prejudi the application of the liability regime for 1 A = article; P = paragraph; S = senten; N = number; 25

26 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A:9 N:2 period which, the end of the fifth banking business day following the date of acptan of the crossborder credit transfer order as defined in 2 of the Regulation and, on the other hand, the date when the funds has been credited on the account of the beneficiary institution; (2) for the beneficiary, the delay which give rights to compensation from its institution is defined as the period, in days, between on the one hand, the end of the period agreed at 3 for reived cross-border credit transfers, or in the absen of such period, the end of the banking business day which follows the date the funds have been credited on the account of the beneficiary institution, and on the other hand, the date when the funds have been credited on the beneficiary s account. fault. A: 6 P: 1 S: 4 Similarly, where the non-execution of the cross-border credit transfer within the time limit agreed or, in absen of any such time limit, before the end of the fifth banking business day following the date of acptan of the cross-border credit transfer is attributable to an intermediary institution, that institution shall be required to compensate the originator's institution. N N:1 L133-1 Any delay in the execution of cross-border credit transfers for an amount fixed by the Regulatory Banking and Financial Committee gives rights, even without any fault, and without prejudi to the normal basis of claims and no later than fourteen business days after the execution of the crossborder credit transfer, to compensation whose calculation is defined in the Regulation. French provisions do not distinguish between the institutions as they do not require any fault. When the originator complains, he will address his claim to his institution. When the 1 A = article; P = paragraph; S = senten; N = number; 26

27 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A: 6 P: 3 A: 6 P: 2 S: 1 No compensation shall be payable pursuant to paragraphs 1 and 2 where the originator's institution or, as the case may be, the beneficiary's institution can establish that the delay is attributable to the originator, or, as the case may be, the beneficiary. The beneficiary's institution shall make the funds resulting from the cross-border credit transfer available to the beneficiary within the time limit agreed with the beneficiary. N A:3 P:1 1 A = article; P = paragraph; S = senten; N = number; 27 Prior to the cross-border credit transfer, the institutions must inform their customers on the conditions for the cross-border credit transfers. This information may be communicated in the framework of the general conditions. beneficiary complaints, he will direct his claim to his institution. No institution could argue it is someone else's fault. There is no provision for the compensation between the intermediary institution and the originator's institution or the beneficiary's institution. This does not mean that there is no possible compensation but the normal claim prosses should be used in order to get it.

28 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A:3 P:4 A:4 P:5 A7 P:1 (b) for reived transfers, the maximum time period between the date of reipt of the funds by the institution holding the beneficiary bank account and the date when the beneficiary account is credited; Institutions must inform their clients in advan in writing about the conditions under which the crossborder credit transfers will be executed. For the beneficiary, the date of credit on his account. For the cross-border credit transfers reived, the maximum time period between on the one hand, the date of reipt of the funds by the beneficiary's institution, and on the other hand, the date when the beneficiary's account is credited. A: 6 P: 2 S: 2 Where the agreed time limit is not complied with or, in the absen of any such time limit, where, at the end of the banking business day following the day on which the funds where credited to the account of the beneficiary's institution, the funds have not been credited to the beneficiary's N N:1 L A = article; P = paragraph; S = senten; N = number; 28 The information communicated previously to the customer and mentioned in 3, binds the institution which has provided such information for the execution of the cross-border credit transfer. Delays in the execution of cross-border credit transfers for an amount fixed by the Regulatory Banking and Financial Committee give rights, even without any fault, and without prejudi to the normal basis and no later than fourteen business days after the execution of the cross-border credit transfer, to compensation whose calculation is The domestic provisions provide for a compensation regime without the need to prove the fault of the institution. The

29 Transposition of on Cross-Border Credit Transfers in Fran 1 Text Applicability A: 6 P: 2 S: 3 account, the beneficiary's institution shall compensate the beneficiary. Compensation shall comprise the payment of interest calculated by applying the referen rate of interest to the amount of the cross-border credit transfer for the period from: -the end of the agreed time limit or, in the absen of any such time limit, the end of the banking business day following the day on which the funds were credited to the account of the beneficiary's institution, to A:9 P:1 A:9 N: 2 N A:9 P:1 A:9 N:1 defined in the Regulation. The Regulation defines the calculation of the compensation for the delay in executing crossborder credit transfers by application of the statutory interest rate to the amount of the transfer for the delay period defined as such: (2) For the beneficiary, the delay which give rights to a compensation from its institution is defined as the period, in days, between on the one hand, the end of the delay agreed at 3 for reived transfers, or in the absen of such period, the end of the banking business day which follows the date the funds have been credited on the account of the beneficiary institution, and on the other hand, the date when the funds have been credited on the beneficiary's. The compensation is calculated for the period of delay as such: (1) for the originator, the delay which gives rights to compensation from his institution is defined as the period, in days, between on the one hand, the end of the delay agreed at 3 for issued transfers, or in the absen of such period the end of the fifth banking business day following the date of acptan of the transfer order as defined in delay is in itself sufficient to create a legal obligation upon the institution to pay compensation. Provisions on the calculation of the compensation for delay are copied from the Directive. 1 A = article; P = paragraph; S = senten; N = number; 29