Payment services, Non-cash Means of payment, Credit transfers, Summary of Directive 97/5/CE


Summary of Directive 97/5/CE
on Cross Border Credit Transfers,
published in OJ L 43 of 14/2/1997


The Directive aims at establishing minimum information and performance requirements for cross-border credit transfers. Thus it wants to ensure that funds can be transferred from one part of the Community to another rapidly, reliably, inexpensively.

To this end, the Directive provides for:

  • Transparency obligations (i.e. certain information obligations before and after a transfer is made)
  • Minimum standards for the transfer as such regarding execution time and distribution of charges ("no double charging") as well as a money-back guarantee in case a transfer gets lost
  • Provision regarding efficient complaints and redress schemes

The Directive applies to transfers up to euro 50.000,- effectuated in the currencies of the Member States and in Euro within the European Union and the European Economic Area. It applies to "credit transfers" carried out on the initiative of an originator. "Debit transfers" and payments by cheques are not covered by the scope of the Directive.

The Cross-Border Credit Transfers Directive entered into force on 14 August 1999.


Obligation of Transparency vis-à-vis the Customer

Before carrying out a cross-border credit transfer, institutions must provide general information on the arrangement of such a transfer:

  • execution time
  • the method of calculating any commission fees and charges payable by the customer to the institution
  • the value date applied by the institution
  • details of complaint and redress procedures
  • the reference exchange rates used

After a cross-border credit transfer has been carried out, institutions must provide the following information:

  • a reference enabling the customer to identify the transfer
  • the actual (original) amount of the transfer
  • the amount of any charges or commissions payable by the customer
  • the value date applied by the institution

If the originator has specified that the transfer charges are to be completely borne by the beneficiary ("BEN-transfer) or that the charges shall be shared with the beneficiary ("SHARED-transfer"), the latter must be informed of this by his own institution.

Minimum standards for the transfer as such

In cases of cross-border credit transfers with stated specifications, the institution must - at the customers request - either give an undertaking concerning the time needed for carrying out the transfer and the commission fees and charges, or refrain from accepting to carry out the transfer.

The transfer must be effected within the agreed time limit. If this agreed time limit is not complied with, or - in the absence of any such agreement - has not arrived at the beneficiary's account at the end of 5+1 bank business days following the date of acceptance of the cross-border credit transfer, a compensation has to be paid. However, no compensation has to be paid if the beneficiary's institution can establish that the delay is attributable to the originator or to the beneficiary.

If the originator does not specify otherwise, the transfer will be carried out as an "OUR-transfer". Wrongful deductions by the originator's or the beneficiary's institution or any intermediary institution must be refunded.

In case a "transfer gets lost, " the "money-back guarantee" up to euro 12.500,- applies: i.e. if the originator's institution accepts a transfer order but the relevant amount is not credited to the account of the beneficiary's institution, the originator's institution has to credit the originator up to euro 12.500 plus interest and charges.

It should be noted that the Cross-Border Credit Transfer Directive very much facilitates consumer complaints and redress: now, the consumer has to deal with only one partner, i.e. his own bank, in case something went wrong with the cross-border credit transfer.

It should also be noted, however, that the Directive cannot regulate the level of charges and costs at a European level. This must be left to market forces. It is therefore advisable to compare the fees of the different banks and to "shop around" as the fees vary considerably between institutions.

Establishment of adequate complaints and redress procedures

Member States have to ensure the existence of adequate and efficient complaints and redress procedures. The access to courts in itself is not sufficient to comply with the provisions of this Directive. However, consumers must have the right to take legal steps in case he is not satisfied with the result of the out of court settlement.

Please consult the list of the national complaint boards dealing with cross-border complaints and redress according to Art. 10 of the Directive.

Last update: 06.02.2012