7. International Bank Transfers

1. 7.1. Within European Union
2. 7.2. Outside of European Union
3. 7.3. Currency Brokers

7.1. Within European Union

Making international transfers within the European Union is now (in theory at any rate) easier and less costly than it used to be, as a result of EU moves to create a single system for electronic payments across Euro borders.

The rule applies on condition that the sum is paid is euros and that it is less than €50,000.

Most importantly, you must include the IBAN (International Bank Account Number) and receiving bank SWIFTBIC (Bank Identifier Code) for the person or company to whom you are sending the money.

Your IBAN is basically your bank account number plus some other bank and country codes; your SWIFTBIC identifies your bank and the country.

The receiving bank is only permitted to apply a charge, if it also applies a charge to bank transfers within its national borders.

The situation is a complex one but, broadly speaking, the single payments rule does not apply to transactions made in currencies other than the Euro in an EU country that has not adopted the Euro as its single currency, e.g. the UK and Denmark.

As a result the regulation will not apply to a deposits made in Pounds Sterling to an account denominated in Euro currency held in France, i.e. where the exchange conversion is carried out by the receiving bank.

Nonetheless, if the transfer is being made in Euros from an UK account denominated in Sterling, to an account denominated in Euros held in France, then the regulation will apply, (although, in these cicumstances, the UK bank is entitled to apply a currency exchange fee).

The same goes for a transfer made from a Euro denominated account in the UK to a Euro denominated account in France.

Therefore, a UK bank is not entitled to charge a higher fee for a transfer of Euros from the UK to France: the charge must be the same as if it were making a transfer from a British account to another British account.

The EU rule on bank transfers does not apply in relation to international cheques, where processing charges can be high - comprising a basic charge and a percentage of the sum. There clearance time for cheques is also considerably longer than for bank transfers.

With effect from Jan 2008 it has been possible (at least in theory anyway!)to make payments by direct debit (virement) between countries in the Eurozone, although the development of a of this facility is only gradually being introduced by the banks, and is unlikely to be widely available until 2010.

Since January 2007, when making cross border payments, banks are also required to supply sender information to the receiving bank. Accordingly, if you or a third party abroad wire funds into your French bank account, their personal details will almost certainly appear on your French bank statement.