Circular BCL 2007/206 of 20 August 2007 — Adoption by Cyprus and Malta of the single currency, the euro, from 1 January 2008: Implications for statistical declarations concerning the balance of payments

Luxembourg, 20 August 2007

To all credit institutions and to the financial services of the Post and Telecommunications Company (postal checking account service)

CIRCULAR BCL 2007/206

Adoption by Cyprus and Malta of the single currency, the euro, from 1 January 2008: Implications for statistical declarations concerning the balance of payments

Ladies and Gentlemen,

At the European Council meeting held in Brussels on 10 July 2007, the Heads of State and Government of the European Union decided that, with effect from 1 January 2008, Cyprus and Malta will adopt the single currency, the euro.

The purpose of this circular is to describe the impact of this accession on the establishment of balance of payments directories. Indeed, declarants must ensure that Cyprus and Malta are integrated into the territorial concept constituted by the European Economic and Monetary Union (EMU) and consequently, use appropriately the operation codes for which there is a geographical distinction between EMU/non-EMU.

1 Securities

Financial transactions carried out by Luxembourg residents on securities issued by residents of Cyprus and Malta must be reported via the category of EMU security operation codes, namely codes 421, 422, 424, 428, 429, 473 and 478, to be chosen according to the nature of the security, its maturity and the event considered (purchase/sale or repayment).

In particular, operation codes 441, 442, 444, 448, 449, 474 and 479 must no longer be used for the coding of financial transactions on securities issued by residents of Cyprus and Malta.

2 Direct investments

Direct investment operations carried out by private sector residents towards Cyprus and Malta will also be affected by this change. It will be necessary, where appropriate, to use operation codes 430 (capital formation and increase) and 431 (purchase of participation), and not codes 434 and 435 reserved for direct investments made outside the EMU.

Regarding operations towards Luxembourg by investors established in Cyprus or Malta, there will be no change since there is no geographical zone distinction for investments made in this direction.

3 Entry into force

The modifications described above will take effect on 1 January 2008. Transactions included in the directories transmitted in 2008 but relating to foreign transactions carried out in 2007 must be recorded by applying the EMU geographic definition in force until 31 December 2007.

4 Determination of operation codes

Finally, for the determination of the operation codes used for the coding of securities transactions, it will be necessary to use the following table from 1 January 2008:

Operation Codes	Residence of the security issuer
491, 492, 494, 498, 499, 535, 536	Luxembourg
421, 422, 424, 428, 429, 473, 478	Germany, Austria, Belgium, Spain (including the Canary Islands, Ceuta and Melilla), Finland, France (and Monaco, the overseas departments: Guadeloupe, French Guiana, Martinique, Réunion and the territorial collectivities: Mayotte and Saint Pierre and Miquelon), Greece, Ireland, Italy, Netherlands, Portugal (including the Azores and Madeira), Slovenia, Cyprus and Malta
Banque centrale européenne (XA)
441, 442, 444, 448, 449, 474, 479	All other countries not listed above, including notably:

• Andorra, San Marino and the Vatican, the Netherlands Antilles and Aruba, Macao,
• Institutions corresponding to country codes XB, XC, XD and XG |

Please accept, Ladies and Gentlemen, the assurance of our most distinguished sentiments.

CENTRAL BANK OF LUXEMBOURG
The Directorate

Serge KOLB Andrée BILLON Yves MERSCH