Documents considered by the Committee on 5 February 2014 - European Scrutiny Committee Contents

17 Financial services: Single Euro Payment Area (SEPA)



COM(13) 937

Draft Regulation amending Regulation (EU) No. 260/2012 as regards the migration to Union-wide credit transfers and direct debits
Legal base Article 114 TFEU; co-decision; QMV
Document originated 9 January 2014
Deposited in Parliament 14 January 2014
Department HM Treasury
Basis of consideration EM of 25 January 2014
Previous Committee Report None
Discussion in Council February 2014
Committee's assessment Politically important
Committee's decision Cleared


17.1 Regulation (EU) No. 260/2012, part of the Single Euro Payment Area (SEPA) project, sets deadlines for banks that handle euro payments via direct debits and credit transfers to do so using a common electronic format and computer language (ISO 20222, XML). It does not apply to payments in sterling, or to cash, plastic cards or cheques. It will make banks' systems interoperable so that payments in euros can be processed electronically from start to finish anywhere in the EU by automated systems.

17.2 The Regulation set 1 February as the end-date in the eurozone for the migration of domestic as well as intra-EU credit transfers and direct debits in euros.

The document

17.3 The Commission proposes this draft Regulation to postpone the implementation date of Regulation (EU) No. 260/2012 for six months, from 1 February until 1 August, because a number of eurozone Member States are unlikely to meet the February deadline. The Commission presents the draft Regulation as a so-called quick fix legislative proposal, as permitted by Article 4 of Protocol 1 of the Lisbon Treaty, and asks the Council and the European Parliament to adopt it as a matter of urgency.

The Government's view

17.4 The Financial Secretary to the Treasury (Sajid Javid) says that:

·  from a purely policy perspective, the Government does not see any reason to object to this draft Regulation;

·  as the Government has taken advantage of the derogation offered in Regulation (EU) No. 260/2012 and implemented a longer end date of 2016, the postponement does not give rise to any problems for the UK;

·  a number of other non-eurozone Member States also took advantage of the derogation and have confirmed that they do not object to the proposal;

·  ensuring that the complete transition is a smooth as possible is of benefit to the UK, which has fully signed up to the SEPA project of which the Regulations is part; and

·  the Government therefore supports the substance of the proposal.

17.5 But the Minister also says that:

·  the Commission published the proposal on 9 January, it was circulated by the Council Secretariat on 10 January and it went to Coreper on 22 January, before being tabled at the Council for final Ministerial approval after the European Parliament plenary session of 3-6 February;

·  the Government has a number of concerns around the timing of introducing this proposal and of the chosen procedure for reaching agreement;

·  Member States were only given one day to respond to the "silent procedure" (requiring Member States to confirm they had no objection or had very serious policy concerns or objected to the matter being dealt urgently by Coreper without discussion), giving insufficient time for Parliament to scrutinise the proposal;

·  additionally, non-eurozone Member States should have been informed of the implementation issues much earlier; and

·  the Government will make a statement at the time of adoption of the proposal making its dissatisfaction at the handling of this process known — nevertheless, in policy terms, it has no reason to object to the proposal.


17.6 We recognise the utility of this draft Regulation and clear the document from scrutiny.

17.7 However, we share the Government's concern about the processing of the proposal and ask the Minister to add our dissatisfaction to the Government statement when the proposal is adopted by the Council.

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Prepared 18 February 2014