BCL Circular 2007/210 of 16 October 2007 — Balance of Payments Data Collection: Modification of Instructions

Luxembourg, 16 October 2007

To all credit institutions and to the financial services of the Post and Telecommunications Company

CIRCULAR BCL 2007/210
Balance of Payments Data Collection
Modification of Instructions

Dear Madam, Dear Sir,

The Grand Ducal Regulation of 10 November 1944, as amended by the Law of 28 June 2000, assigns the Banque centrale du Luxembourg (BCL) and the Central Service for Statistics and Economic Studies (STATEC) the mission to jointly compile a balance of payments for Luxembourg. The balance of payments is compiled in particular to enable Luxembourg to meet its international obligations, including those imposed by the European Central Bank (ECB).

With the aim of limiting, as much as possible, the data collection burden on credit institutions and enabling the automation of payment clearing procedures required by the introduction of SEPA ("Single European Payment Area"), the BCL and STATEC have decided, by common agreement:

• to abolish, as of January 2008, the obligation to report payments made between resident credit institutions;
• to raise the exemption threshold from €12,500 to €50,000 as of 1 July 2008.

However, in order to compensate for the loss of information resulting from this modification, the BCL and STATEC have decided to request certain information available in the payment systems of resident credit institutions – for payments less than or equal to €50,000 – (excluding in any case the economic nature of the payment).

This circular modifies in particular the collection instructions defined in Circular BCL 2001/166 titled "Instructions regarding the modification of data collection related to the balance of payments". The aforementioned modifications have been introduced into a revised version of the "Collection of instructions to credit institutions and financial services of the Post and Telecommunications Company". The revised version is available on the BCL website (www.bcl.lu).

More concretely, the modifications made to the currently in force instructions are as follows.

1 Abolition, as of January 2008, of the obligation to report payments made within a credit institution or between several resident credit institutions

To facilitate the introduction of SEPA at the national level by removing a statistical obligation that could have partially hindered the automation of payments between resident banks within the framework of this new system, the BCL and STATEC have decided no longer to impose, as of January 2008, the transmission of statistical information concerning payments between resident credit institutions. In particular, the obligations set out in points 2.1.1.1 and 2.1.1.2 of the Collection of instructions to credit institutions and financial services of the Post and Telecommunications Company have been abolished. Payments between counterparties holding accounts with one or more resident credit institutions no longer need to be reported to the BCL.

Nevertheless, credit institutions may continue to report these transactions until their computer systems are updated.

Credit institutions are therefore no longer required to transmit the information "020+xx" described in Chapter 3.2 of the Collection of instructions to other resident credit institutions, as of January 2008.

2 Increase of the exemption threshold from €12,500 to €50,000 as of 1 July 2008

The exemption threshold of €12,500 (or equivalent in foreign currency) set out in particular in Chapter 1.9 of the Collection of instructions to credit institutions is increased to €50,000 (or equivalent in foreign currency).

The table set out in Chapter 1.9 is modified as follows:

Object of thresholds in euros
For each payment less than or equal to this threshold and made on behalf of the clientele, the resident credit institution is exempt from any statistical data communication.	50 000
From this threshold, the resident is obliged to notify the nature of the transaction to the resident credit institution, and the latter is obliged to identify the resident counterparty and transmit the nature of the transaction in codified form to the BCL.	50 000

The exemption threshold of €50,000 applies as of 1 July 2008.

It is recalled that the €50,000 exemption threshold concerns in particular payments made on behalf of the clientele. The summary table set out in Chapter 1.9.3 "Operations with foreign countries made on own account by credit institutions" remains in force.

3 Introduction as of 1 January 2008 of an electronic list containing information available in the internal systems of credit institutions regarding payments below the exemption threshold of €50,000

In order to compensate for the obvious loss of statistical information and to use existing (and available at marginal cost) data within credit institutions, the latter are invited to transmit monthly payments whose value is less than or equal to the exemption threshold of €50,000 or equivalent in foreign currency, made by resident clients with final counterparties holding accounts with non-resident credit institutions.

Credit institutions are exempt from any request for information from the client for payments whose value is less than or equal to the exemption threshold of €50,000 or equivalent in foreign currency. Consequently, and in particular for the preparation of the list, the credit institution is exempt from any communication with its client, particularly regarding the economic nature of the transaction.

In order to utilize existing computer systems as much as possible, the transmission scheme will be identical to that currently in force under the "balance of payments" collection. In particular, the identification of resident clients will be carried out using the same procedures as currently in force for the "balance of payments" collection.

Thus, the following information must be included in the list:

• the amount in the payment currency, distinguishing between incoming and outgoing payments;
• the payment currency;
• the country code, either of the country of residence of the final beneficiary/order-giver holding an account with the non-resident credit institution, or of the non-resident credit institution with which the beneficiary/order-giver holds an account;
• the identification of the resident beneficiary/order-giver (to be carried out using one of the identification codes defined in the Collection of instructions to credit institutions);
• the economic nature of the operation must not be requested from the client.

The fixed operation code to be included in the directory is code 650.

The list may be transmitted to the BCL starting from the January 2008 period. To allow credit institutions to modify their accounting chains, the BCL allows a four-month implementation period, meaning that declarants may begin transmitting data by the end of April 2008 at the latest.

In this case, credit institutions must nevertheless transmit data retroactively starting from January 2008.

From the May 2008 period, operation statements must be transmitted to the BCL by the fifth working day following the end of the relevant month.

For all information concerning the application of this circular, please contact Mr. Germain Stammet (tel. 4774 4279) or Mr. Paul Feuvrier (tel. 4774 4416).

Please accept, Madam, Sir, the assurance of our very distinguished sentiments.

BANQUE CENTRALE DU LUXEMBOURG
The Management

Serge KOLB Andrée BILLON Yves MERSCH