Explanatory note

These Regulations give effect to Directive 97/5/EC of the European Parliament and of the Council on cross-border credit transfers (O.J. L43, 14.2.97, page 25). The Directive applies to EEA States which are not EC member States, and to cross-border credit transfers in the currencies of those States, by virtue of Decision No. 1/98 of the EEA Joint Committee dated 30th January 1998 (O.J. L272, 8.10.98, page 1).

The Regulations lay down certain standard conditions for cross-border credit transfers not exceeding 50,000 euro or its equivalent in another currency of a State within the European Economic Area. A cross-border credit transfer is defined as a transaction or series of transactions carried out as a result of instructions given directly to an institution in one EEA State, the purpose of which is to make available to the ultimate recipient of the funds transferred at an institution in another EEA State an amount in euro or another currency of an EEA State.

The Regulations set out the minimum information which must be made available to the actual and prospective customers of an institution which participates in the carrying out of cross-border credit transfers, and which must be given by an institution to customers on whose behalf it has carried out such a transfer.

The Regulations enable a customer to seek undertakings regarding the time it will take to carry out a transfer and the charges to be made in connection therewith, and make provision for such undertakings to be deemed to be part of the contract made between a customer and his institution.

They also lay down maximum periods for the carrying out of a transfer, where there is no time limit agreed between a customer and his institution, and for payment of compensation where a transfer is completed late. If there is a failure to complete a transfer, in certain circumstances there is an obligation on an institution to refund to its customer the amount of the failed transfer, subject to an upper limit of 12,500 euro or its equivalent in another currency of an EEA State, together with associated charges and interest. In other cases an institution is obliged to use all reasonable endeavours to trace and recover the amount of the failed transfer.

The Regulations also make provision regarding charging for cross-border credit transfers, and for the recovery of sums deducted from the amount transferred in contravention of the customer’s instructions.

A regulatory impact assessment in respect of these Regulations, including an assessment of the costs of compliance, is available from the Public Enquiry Unit, Room 89/2, HM Treasury, Parliament Street, London SW1P 3AG.