Tag Archives: Financial transaction

Scrutiny of expenditure under the European Agricultural Guarantee Fund

Scrutiny of expenditure under the European Agricultural Guarantee Fund

Outline of the Community (European Union) legislation about Scrutiny of expenditure under the European Agricultural Guarantee Fund

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > General framework

Scrutiny of expenditure under the European Agricultural Guarantee Fund (EAGF)

Document or Iniciative

Council Regulation (EC) No 485/2008 of 26 May 2008 on scrutiny by Member States of transactions forming part of the system of financing by the European Agricultural Guarantee Fund (Codified version).

Summary

The European Agricultural Guarantee Fund (EAGF) is the financial instrument of the Common Agricultural Policy which is intended to support agricultural markets. This Regulation therefore aims at ensuring the legitimacy of aid granted under the EAGF and monitoring the use thereof.

Scrutiny programmes

Each year, Member States shall establish a programme for scrutinies which have been planned, and send it to the Commission. These programmes are to be prepared on the basis of risk analysis. They should give details of the number of enterprises to be scrutinised, the breakdown by sector and the criteria adopted for drawing up the programme. When making a selection, Member States should take into account the amount of aid allocated to such and such a company under the EAGF.

Monitoring officials

Member States should set up a special department which shall be responsible for the application of this Regulation. This department shall be directly responsible for the performance or coordination of scrutinies carried out by officials. The Regulation states that this should be a specific department, totally independent of other departments responsible for granting EAGF aid. Furthermore, officials of the Commission may participate in these scrutinies. They shall have access to all documents prepared for scrutiny, but may under no circumstances themselves exercise the powers accorded to national officials.

Scrutiny of undertakings’ documents

The scrutiny of commercial documents constitutes one of the most effective ways of monitoring financial transactions relating to EAGF aid. These documents include for example all of the undertakings’ registers, supporting documents and correspondence files. Undertakings shall keep these documents for at least three years, starting from the end of the year in which they were drawn up.

Member States should ensure that the officials responsible for scrutiny have access to the commercial documents of undertakings, in compliance with national rules relating to the criminal procedure for the seizure of documents.

Mutual assistance

The Commission may coordinate joint actions involving mutual assistance between two or more Member States. This type of cooperation is necessary when an undertaking or a third party involved in transactions under scrutiny is established in a Member State:

  • other than that in which payment of the amount in question has been made;
  • other than that in which the documents required for scrutiny are to be found.

Context

This Regulation codifies and repeals Regulation (EEC) No 4045/89. References to the repealed Regulation shall be construed as references to this Regulation.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 485/2008

23.6.2008

OJ L 143 of 3.6.2008

Related Acts

Commission Regulation (EC) No 1276/2008 of 17 December 2008 on the monitoring by physical checks of exports of agricultural products receiving refunds or other amounts [Official Journal L 339 of 18.12.2008].

Commission Regulation (EC) No 4/2004 of 23 December 2003 laying down detailed rules for the application of Council Regulation (EEC) No 4045/89 on scrutiny by Member States of transactions forming part of the system of financing by the Guarantee Section of the European Agricultural Guidance and Guarantee Fund [Official Journal L 2 of 6.1.2004].

Commission Regulation (EC) No 2311/2000 of 18 October 2000 establishing the list of measures to which Council Regulation (EEC) No 4045/89 does not apply and repealing Decision 96/284/EC [Official Journal L 265 of 19.10.2000].

Distance contracts for financial services

Distance contracts for financial services

Outline of the Community (European Union) legislation about Distance contracts for financial services

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Financial services: general framework

Distance contracts for financial services

Document or Iniciative

Directive 2002/65/EC of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services and amending Council Directives 90/619/EEC, 97/7/EC and 98/27/EC [See amending acts].

Summary

Scope

The Directive covers contracts for retail financial services (banking, insurance, payment and investment services, including pension funds) that are negotiated at a distance (e.g. by telephone, fax or over the Internet), i.e. by any means which do not require the simultaneous physical presence of the parties to the contract.

Right to reflect

The Directive gives the consumer the right to reflect before concluding a contract with a supplier. The supplier is thus required to transmit a draft contract to the consumer, in writing or on a durable medium (e.g. floppy disk, CD-ROM or e-mail), including all the contractual terms and conditions. The reflection period is 14 days, during which all the terms and conditions remain valid. The parties are nonetheless free to agree on a longer period or to negotiate other conditions.

Right to withdraw

The consumer has the right to withdraw within 14 days (30 days in the case of life assurance and personal pension operations) in the following circumstances:

  • when the contract has been signed before the consumer has received prior notice of the contractual terms and conditions (e.g. consumer takes out an insurance policy in order to obtain immediate cover);
  • when the consumer has received the contractual terms and conditions but has been unfairly induced to conclude the contract during the reflection period.

If the consumer exercises the right of withdrawal after having already agreed to partial performance of the service, he may be required to pay the supplier for the service rendered. If the service has been rendered in its entirety before the right of withdrawal is exercised, that right can no longer be exercised and the consumer will have to pay for the service. Consumers must be informed in advance of the price to be paid (or of the basis on which it will be calculated).

In order to avoid speculative manoeuvres, the right of reflection or withdrawal does not apply to services whose price is liable to fluctuate as a result of developments on financial markets (e.g. the securities market).

Right to reimbursement

Certain financial services, notably futures (e.g. an instruction given by a consumer to purchase a certain number of shares at a fixed price), may sometimes be totally or partially unavailable at the time of performance of the contract. In this case, the consumer is entitled to reimbursement of the sums paid over to purchase the services.

Cancellation of payment by card in the event of theft

In the event of fraudulent use of his credit card, the consumer may request cancellation of the payment or reimbursement of any amount already paid.

Protection against unsolicited supply of services

Customers are protected by Directive 2005/29/EC, which regards the unsolicited supply of services as an unfair commercial practice. Failure to reply to an offer to supply services does not put the customer under an obligation and does not constitute tacit consent.

Complaints procedures

Member States must ensure that adequate and effective complaints and redress procedures (court, administrative and out-of-court) are put in place for the settlement of possible disputes between suppliers and consumers.

Sanctions

Member States must also ensure that operators and suppliers of communication means put an end, technology permitting, to illicit activities performed using means of distance communication.

Background

The proposal for a Directive is intended to supplement European Parliament and Council Directive 97/7/EC, which ensures appropriate consumer protection in respect of most products and services other than financial services (excluded in view of their specific characteristics). It aims to rectify this legal omission by establishing common rules to govern the conditions under which distance contracts for financial services are concluded.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2002/65/EC

09.10.2002

09.10.2004

JO L 271 of 09.10.2002

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Directive 2005/29/EC

12.06.2005

12.12.2007

JO L 149 of 11.06.2005

Directive 2007/64/EC

25.12.2007

1.11.2009

OJ L 319 of 5.12.2007

Successive amendments and corrections to Directive 2002/65/EC have been incorporated in the basic text. This consolidated version  is for reference purpose only.

Financial collateral arrangements

Financial collateral arrangements

Outline of the Community (European Union) legislation about Financial collateral arrangements

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single market for services > Financial services: banking

Financial collateral arrangements

Document or Iniciative

Directive 2002/47/EC of the European Parliament and of the Council of 6 June 2002 on financial collateral arrangements [See amending act(s)].

Summary

This Directive introduces a Community framework for financial collateral. It concerns financial institutions and insolvency proceedings. The financial collateral is made up of:

  • cash;
  • financial instruments;
  • credit claims *.

Bodies concerned

Member States are required to repeal certain national rules in order to improve the legal clarity of collateral arrangements *. However, this Directive does not apply to certain aspects of civil law such as restitution arising from mistake, error or lack of legal capacity. It applies to specific categories such as:

  • public authorities;
  • public sector bodies;
  • a central bank;
  • a financial institution subject to prudential supervision.

This Directive does not prejudice the operation and effect of the contractual terms of financial instruments or credit claims provided as financial collateral. Moreover, the Directive does not affect the rights of Member States to impose rules aimed at ensuring the enforceability of financial collateral contracts on third parties with regard to private claims.

A more secure legal framework for financial collateral

The Directive provides for rapid and non-formalistic enforcement procedures designed in part to limit contagion effects in the event of default by one of the parties to the arrangement. Member States may not make the creation, perfection, validity, enforceability or admissibility of a financial collateral arrangement dependent on the performance of any formal act. In addition, Member States must ensure that the collateral taker is able to realise financial collateral in one of the following manners:

  • if it concerns financial instruments by sale or appropriation and by setting off their value against, or applying their value in discharge of, the relevant financial obligations;
  • if it concerns cash by setting off the amount against or applying it in discharge of the relevant financial obligations;
  • if it concerns a credit claim by sale or appropriation and by setting off their value against, or applying their value in discharge of, the relevant financial obligations.

Appropriation is possible only if this has been agreed in the arrangement. Member States are responsible for ensuring the right of use of financial collateral and for ensuring that a financial collateral arrangement can take effect in accordance with its terms. Member States must recognise the applicable close-out netting provisions, even if the collateral taker or provider is subject to winding-up proceedings or reorganisation measures. Equally, the application of close-out netting provisions may not be blocked by any purported assignment, judicial or other attachment, or other disposition of or in respect of such rights.

The Directive also stipulates that certain insolvency provisions do not apply. Financial collateral arrangements may not be declared invalid or void or be reversed on the sole basis that they have been concluded or that the financial collateral has been provided:

  • on the day of the commencement of winding-up proceedings or reorganisation measures, but prior to the order or decree making that commencement;
  • in a prescribed period prior to, and defined by reference to, the commencement of such proceedings or measures or by reference to the making of any order or decree.

The Directive also lays down provisions applicable in the event of a conflict of laws.

Key terms used in the act
  • Financial collateral arrangement: a collateral arrangement in the form of cash or financial instruments, i.e. a title transfer of ownership or a security financial collateral arrangement.
  • Credit claims: pecuniary claims arising out of an agreement whereby a credit institution grants credit in the form of a loan.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2002/47/EC

27.6.2002

27.12.2003

OJ L 168 of 27.06.2002

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Directive 2009/44/EC

30.6.2009

30.12.2010

OJ L 146 of 10.6.2009

Related Acts

Evaluation Report from the Commission to the European Parliament and the Council of 20 December 2006 on the Financial Collateral Arrangements Directive [COM(2006) 833 final – not published in the Official Journal].
This report assesses the application of Directive 2002/47/EC in the Member States. Although it is still too early for a full assessment of whether this Directive has strengthened the integration of the European financial markets, the Commission considers that it has made procedures relating to financial collateral in Europe more effective by reducing legal and administrative constraints.

Information on the payer accompanying transfers of funds

Information on the payer accompanying transfers of funds

Outline of the Community (European Union) legislation about Information on the payer accompanying transfers of funds

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single market for capital

Information on the payer accompanying transfers of funds

Document or Iniciative

Regulation (EC) No 1781/2006 of the European Parliament and of the Council dated 15 November 2006 on information on the payer accompanying transfers of funds * .

Summary

This Regulation lays down rules aimed at establishing the traceability of transfers of funds *. These rules will be applicable to all payment service providers (PSP) involved in the payment chain. The This Regulation aims to transpose into Community legislation Special Recommendation VII on “wire transfers” (SR VII) of the Financial Action Task Force (FATF *).

The Regulation does not apply to transfers of funds * which flow from a commercial transaction carried out using a credit or debit card or any other similar payment instrument, provided that a unique identifier allowing the transaction to be traced back to the payer accompanies all transfers of funds flowing from that commercial transaction and that the beneficiary has entered into agreement with the payment service provider enabling the payment of the provision of goods and services.

Furthermore, under the same conditions as the previous point, this regulation does not apply to transfers of funds carried out via a mobile telephone or any other digital device or linked to IT, when the payments are post paid and insofar as the payment service provider must comply with obligations stated by Directive 2005/60/EC.

In addition, the Regulation will not apply to transfers of funds where both the payer * and the payee * are payment service providers acting on their own behalf.

Under the Regulation, the payer’s payment service provider * (PSP) must ensure that transfers of funds contain complete, accurate and meaningful information on the payer. Any intermediary PSP must also ensure that all information on the payer that accompanies a transfer is transferred with it or retained in an appropriate manner.

In turn, any payment service provider * of the payer must report suspicious transactions to the authorities responsible for combating money laundering and terrorist financing. The payee’s PSP must be able to detect a lack of presence of information on the payer when receiving transfers and must take appropriate steps to correct this situation (refuse the transfer or ask for further information) so that received transfers of funds do not remain anonymous.

Accordingly, the name, address and account number of the person ordering the payment must always accompany the transfer. Access to this information will be granted to the competent authorities only for the purposes of preventing, investigating, detecting and prosecuting money laundering or terrorist financing.

An open consultation exercise on this Regulation was conducted online between 2 December 2003 and 15 February 2004. The Commission received 103 replies. The results are available on the website of the Directorate-General for the Internal Market.

Context: combating terrorist financing

In the European Union’s revised Plan of Action to Combat Terrorism (PDF ) of 18 June 2004, the Council emphasised the importance of adopting measures designed to prevent the phenomenon of terrorist financing. The European Council of 25 March 2004 called on the Member States “to increase cooperation between national competent authorities, financial intelligence units and private financial institutions to facilitate improved exchange of information on terrorist financing”.

In that same statement, the Council also asked the Commission to consider improvements on the regulation and transparency of non-profit bodies so as to prevent them from being used by terrorists to acquire funding for their activities.

For its part, the Commission adopted a communicationon prevention in this field in October 2004 and unveiled in December of that year the Union’s strategy for combating terrorist financing. This document, drawn up on the basis of the proposals made jointly by the Commission and the Secretary-General High Representative, takes stock of measures implemented in this field and contains a list of recommendations for strengthening action by the Union.

Key terms used in the act
  • “Payee”: A natural or legal person who is the intended final recipient of transferred funds.
  • “Payer”: a natural or legal person who is the account holder and who allows a transfer of funds to leave the aforementioned account, or in the absence of an account, the natural or legal person who gives the order to carry out a transfer of funds.
  • FAFT: The intergovernmental body responsible for designing and promoting, at both national and international level, strategies to combat money laundering and terrorism financing.
  • “Payment service provider” (PSP): A natural or legal person whose business includes the provision of fund transfer services.
  • “Intermediary payment service provider”: A payment service provider which is neither that of the payer nor that of the payee and which participates in the execution of transfers of funds.
  • “Transfer of funds”: Any transaction carried out on behalf of a payer through a payment service provider by electronic means with a view to making funds available to a payee at another payment service provider, irrespective of whether the payer and the payee are the same person.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Regulation on information on the payer accompanying transfers of funds 1.1.07 OJ L 345 of 8 December 2006

Related Acts

Directive 2005/60/EC of the European Parliament and of the Council on 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing [Official Journal L 309 of 25.11.2005].

Commission Communication to the Council, the European Parliament and the European Economic and Social Committee – The prevention of and fight against terrorist financing through enhanced national high-level coordination and greater transparency of the non-profit sector

COM(2005) 620 final

– Official Journal C 122, 23.5.2006].

Communication from the Commission to the Council and the European Parliament of 20 October 2004 on the prevention of and the fight against terrorist financing through measures to improve the exchange of information, to strengthen transparency and to enhance the traceability of financial transactions

COM(2004) 700 final

– Not published in the Official Journal].

Communication from the Commission to the Council and the European Parliament of 20 October 2004 – Prevention, preparedness and response to terrorist attacks

COM(2004) 698 final

– Not published in the Official Journal].

Council Regulation (EC) No

2580/2001

of 27 December 2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism [Official Journal L 344 of 28.12.2001].

Directive

97/5/EC
(BG) (CS) (ET) (GA) (LV) (LT) (HU) (MT) (PL) (RO) (SK) (SL)
of the European Parliament and of the Council of 27 January 1997 on cross-border credit transfers [Official Journal L 43 of 14.2.1997].

Common system of taxation: mergers, divisions, transfers of assets, exchanges of shares and transfer of the registered office of an SE or SCE

Common system of taxation: mergers, divisions, transfers of assets, exchanges of shares and transfer of the registered office of an SE or SCE

Outline of the Community (European Union) legislation about Common system of taxation: mergers, divisions, transfers of assets, exchanges of shares and transfer of the registered office of an SE or SCE

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Company law

Common system of taxation: mergers, divisions, transfers of assets, exchanges of shares and transfer of the registered office of an SE or SCE

Document or Iniciative

Council Directive 2009/133/EC of 19 October 2009 on the common system of taxation applicable to mergers, divisions, partial divisions, transfers of assets and exchanges of shares concerning companies of different Member States and to the transfer of the registered office of an SE or SCE between Member States.

Summary

This Directive applies to:

  • mergers, divisions, transfers of assets and exchanges of shares in which companies from two or more Member States are involved;
  • the transfer of the registered office between Member States of a Societas Europaea (European Company) (SE) or a European Cooperative Society (SCE).

Rules applicable to mergers, divisions, partial divisions, transfers of assets and exchanges of shares

A merger, division or partial division does not give rise to any taxation of capital gains -calculated by reference to the difference between the real values of the assets and liabilities transferred and their values for tax purposes – at the time of the operation in question but only when such gains are actually realized.

Member States are required to take the necessary measures to ensure that provisions or reserves partly or wholly exempt from tax may be carried over by the permanent establishments of the receiving company which are situated in the Member State of the transferring company.

The allotment of securities representing the capital of the receiving or acquiring company to a shareholder of the transferring or acquired company must not give rise to any taxation of the income, profits or capital gains of that shareholder.

Special case of the transfer of a stable establishment

Where the assets transferred in a merger, a division or a transfer of assets include a permanent establishment of the transferring company which is situated in a Member State other than that of the transferring company, the Member State of the transferring company must renounce any right to tax that permanent establishment.

Special case of transparent entities

Where a Member State considers a non-resident transferring or acquired company to be fiscally transparent, it is not required to apply the provisions of this Directive when taxing a direct or indirect shareholder of that company in respect of the income, profits or capital gains of that company.

Rules applicable to the transfer of the registered office of an SE or SCE

Where an SE or an SCE transfers its registered office from one Member State to another or becomes resident in another Member State, that transfer shall not give rise to any taxation of the income, profits or capital gains of the shareholders. However, Member States may tax the gain arising out of the subsequent transfer of the securities representing the capital of the SE or of the SCE that transfers its registered office.

In the same case, Member States shall take the necessary measures to ensure that, where provisions or reserves properly constituted by the SE or the SCE before the transfer of the registered office are partly or wholly exempt from tax and are not derived from permanent establishments abroad, such provisions or reserves may be carried over, with the same tax exemption, by a permanent establishment of the SE or the SCE which is situated within the territory of the Member State from which the registered office was transferred.

This Directive repeals Directive 90/434/EC.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2009/133/EC

15.12.2099

OJ L 310, 25.11.2009