Legal framework

SEPA legal framework consists of EU Law and European Payments Council self-regulatory documents. To ensure the SEPA project successful implementation at national level it is important to adopt relevant EU Law and to follow European Payments Council requirements.

EU Law

• Proposal for a Regulation on SEPA end-date(-s)
• Regulation on cross-border payments in the Community
• Payment Services Directive

European Payments Council documents

EU Law

Proposal for a Regulation establishing technical requirements for credit transfers and direct debits in euros

Proposal for a Regulation COM(2010) 775 of the European Parliament and of the Council of 16 December 2010 establishing technical requirements for credit transfers and direct debits in euros and amending Regulation (EC) No 924/2009 supplements European law in the field of payment services.

Regulation proposal sets requirements to apply IBAN and BIC as account identifiers and to use XML standard for all credit transfers and direct debits in euro across European Union. Regulation proposal sets requirements on payment service providers reachability and payment systems technical interoperability. Regulation adoption is planned for mid 2012, which would be used as the milestone for requirements time line, e.g. Regulation proposal sets a year after entry into force to fulfil credit transfer requirements, two years - to fulfil direct debit requirements.

To follow Regulation adoption there are European Law portal Pre-Lex and European Parliament legislative observatory available. On 16 December 2011 the Council published the compromise text.

Regulation on cross-border payments in the Community

Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 September 2009 on cross-border payments in the Community and repealing Regulation (EC) No 2560/2001 promotes single European payments market by setting requirements to levy the same charges for national and cross-border payments in euro and sets requirements to apply IBAN and BIC as account identifiers as well as enlarging the scope of payments by covering not only credit transfers and card payments but also direct debit payments.

According to Regulation (EC) No 924/2009, within the direct debit scheme, a payment service provider of a payer reachable for a national direct debit transaction in euro on the payment account of that payer, shall also be reachable, for direct debit transactions in euro initiated by a payee through a payment service provider located in any EU Member State as of 1 November 2010. Regulation (EC) No 924/2009 states, that in those Member States, where the euro is not introduced as their currency, the reachability of payers' accounts for direct debit payments in euro should be ensured by 1 November 2014.  

What is a regulation?
A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.

Payment Services Directive

The main purpose of the Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC (Text with EEA relevance) (Directive 2007/64/EC) is to ensure that EU customer payments – particularly credit transfers, direct debits and card payments – will be executed in a simple, safe and efficient manner as national payments today. The Directive 2007/64/EC is a core element of the SEPA legal framework.

The Directive 2007/64/EC has been implemented into Latvian law by the Law on Payment Services and Electronic Money.

By 1 November 2009 all EU Member States need to transpose the Directive 2007/64/EC into national law. The Directive 2007/64/EC covers three areas:

• The right to provide payment services to the public;
• Transparency and information requirements;
• Rights and obligations of users and providers of payment services.  

What is a directive?
Directives are legal means to harmonise and coordinate Member States legal acts. Each Member State is bound to achieve the aims of a directive, but it is up to the national authorities to decide how a directive is implemented in national law.
By having to be implemented in national law, a directive differs from a regulation which is adopted by the Community and is directly applicable in the Member States, i.e. without having to be implemented in national law.

European Payments Council documents

The European Payments Council has approved a number of self-regulatory documents related to the payment processing and implementation of the legal framework, e.g. handbooks and frameworks on business requirements for SEPA payment instruments and guidelines for implementation of technical standards.

European Payments Council has developed business requirements rulebooks for two SEPA payment instruments – SEPA credit transfers and SEPA direct debit payments, and business requirements framework for SEPA card payments and SEPA infrastructures.

For all SEPA payment instruments there are available numerous implementation guidelines including technical standards for payments handling.

What is a rulebook?
Rulebooks define SEPA schemes (SEPA credit transfer and SEPA direct debit payments) conditions and obligations. The Rulebook contains requirements for SEPA schemes participants and other involved stakeholders, for example, infrastructures and vendors. The Rulebook is primarily focused on the business requirements and operational procedures.

What is a framework?
Frameworks define high level principles and rules for the provision by involved stakeholders.

What are implementation guidelines?
Implementation guidelines define rules for implementing UNIFI (ISO 20022) XML message standards into the SEPA schemes.

In the update process of the mentioned documents the European Payments Council regularly organises public consultations by inviting to participate all SEPA project stakeholders.

European Payments Council has established SEPA credit transfer and SEPA direct debit payments Scheme Management Committee that is responsible for the registration of participats and three panels as out-of-court dispute settlement options for SEPA credit transfer scheme and SEPA direct debit payments scheme participants. In 2008 there were established following three panels: for complaints, conciliation and appeals. European Payments Council has approved SEPA Scheme Managament Internal Rules.