What is Act No. 124 / 2002 Coll.?

Act No. 124 / 2002 Coll., on transfers of funds, electronic means of payment and payment systems (Law on payment transactions) — Law on transfers of funds, electronic means of payment and payment systems (Law on payment transactions).

When it became Act No. 124 / 2002 Coll. effectiveness?

Act No. 124 / 2002 Coll. became effective 01.01.2003.

Is Act No. 124 / 2002 Coll. still valid?

Yes, Act No. 124 / 2002 Coll. is still valid and effective.

How many times was it Act No. 124 / 2002 Coll. amended?

Act No. 124 / 2002 Coll. has 9 time versions of the text.

Act No. 124 / 2002 Coll. - Law on transfers of funds, electronic me...

124

THE LAW

of 13 March 2002

on transfers of funds, electronic means of payment and payment systems

(Law on payment)

Parliament has decided on this law of the Czech Republic:

ČÁST PRVNÍ

INTRODUCTORY PROVISIONS

§ 1

Subject matter

This law implements the relevant provisions of the European Community1) and provides for

(a) the execution of transfers of funds within the territory of the Czech Republic in Czech currency and cross-border transfers (§ 2 (2)),

(b) the issue and use of electronic means of payment;

(c) the creation and operation of payment systems in any currency and the rights and obligations of their participants, provided that they have agreed that such payment systems are governed by the law of the Czech Republic and that there are certain obligations of payment systems participants operating under the law of one of the Member States of the European Union and other States constituting the European Economic Area.

ČÁST DRUHÁ

TRANSFERS OF MONEY INSTRUMENTS

Basic provisions

§ 2

(1) According to this part of the law,

(a) banks, branches of foreign banks and other persons who carry out or mediate transfers of funds as a business where such activities are carried out in the territory of the Czech Republic (hereinafter referred to as "transferring institutions"),

(b) natural and legal persons who give directly to the transferring institution a transfer order (Section 4) (hereinafter referred to as "the authorising officer") or who are the final beneficiaries of the transfer amount (hereinafter referred to as "the beneficiary"). For cross-border transfers referred to in paragraph 2, banks, branches of foreign banks and other persons who carry out or mediate cross-border transfers such as business, persons authorised to provide investment services under special legislation, (2) insurance undertakings, investment companies, investment funds, pension funds and other persons having their registered office or place of business outside the Czech Republic, who carry out similar activities as business.

(2) Cross-border transfers shall mean the transfer of funds from one Member State of the European Union or from a State constituting the European Economic Area to another Member State of the European Union or a State constituting the European Economic Area in the domestic currency of any Member State of the European Union or of a State constituting the European Economic Area up to a consideration of EUR 50 000. The consideration shall be converted at the foreign exchange market rate declared by the European Central Bank on the date of the effective transfer order.

§ 2a

(1) Transferring institutions may carry out or mediate transfers of funds only on the basis of a licence to carry out or mediate transfers of funds (hereinafter referred to as the "transfer of funds'), provided that such activities are not carried out on the basis of a banking, uniform or foreign exchange licence or an authorisation under a special legislature2a. In addition, a licence shall not be required in respect of the business of a person who is entitled to carry out such activities under special legislation.

(2) For the implementation or brokering of cross-border transfers pursuant to Paragraph 2 (2), a foreign exchange licence under the Foreign Exchange Act is granted.

§ 3

Transfer

(1) For the purposes of this Act, a transfer shall mean an operation carried out under an order given by the authorising officer to his transferring institution for the purpose of transferring funds to the beneficiary.

(2) The transfer may be made in particular by debiting the sending authority's account or by passing the cash by the sending authority and crediting the payee's account or by paying the cash to the payee. The authorising officer and the beneficiary may be the same person.

(3) A transfer other than a cross-border transfer shall not be considered as:

postal voucher according to special legislation.3)

§ 4

Transfer order

For the purposes of this Act, the transfer order shall mean:

(a) the authorising officer's unconditional instruction given to the transferring institution for the execution of the transfer;

(b) the order of the authorising officer given to the transferring institution for the execution of the transfer, all the conditions laid down by the authorising officer being fulfilled.

§ 5

Date of validity of the transfer order

(1) The effective date of the transfer order shall be the date on which the authorising officer has fulfilled all the contractual conditions required to carry out the transfer by the transferring institution of which he is a client, the conditions laid down by this law (Paragraph 6 (1)) and other obligations provided for by specific legislation.

(2) If the authorising officer determines the date on which the funds are to be debited from his account on the basis of the transfer order, the transfer order shall become effective on that date if the conditions for its effectiveness are fulfilled.

§ 6

Conditions for the effectiveness of the transfer order

(1) The conditions for the effectiveness of the transfer order shall be to ensure that the amount of the transfer is covered and that the documents necessary to carry out the transfer are transmitted to the transferring institution.

(2) In particular, the transferring institution may, in its trading conditions, provide for an obligation for the authorising officer to transmit the transfer order to it before the date of its effectiveness, the time limit for its transmission and the operational period within which the transfer orders may be transmitted.

§ 7

Information obligations of the transferring institution

(1) The transferring institution shall inform the public in a clear and comprehensible manner in its operational areas and, where appropriate by electronic means, in advance of the general conditions under which transfers are carried out. The information shall always include:

(a) the time limit necessary to credit the transfer amount to the account of the transferring institution of the beneficiary or the method for determining that period; the start of this period must be specified,

(b) the time limit necessary for the amount of the transfer credited to the account of the transferring institution of the beneficiary to be credited to the account of the payee or for the amount of the transfer to be made available to the payee;

(c) the amount or method of determining the price to be paid by the client for the execution of the transfer;

(d) the date on which the amount of the transfer will be debited from the client's account if it is the originator and the date on which the amount of the transfer will be credited to the client's account or when it will be available to him, if it is the recipient;

(e) complaints and redress procedures including information on dispute resolution procedures (§ 12);

(f) an indication of the exchange rates used for conversion.

(2) Except where the transferring institution does not intend to carry out the transfer, the candidates must, at its request, communicate the binding deadline within which the transfer will be carried out and the binding price the candidate pays for the execution of the transfer.

(3) The transferring institution shall subsequently inform its client in a clear and comprehensible manner in writing and, if appropriate by electronic means, of the transfers made, if the client does not relinquish the right to such information. The information shall always include:

(a) data enabling the client to identify the transfer;

(b) the amount of the transfer which was indicated on the transfer order;

(c) the amount of the transfer price charged to the client;

(d) the date on which the amount of the transfer was debited from the client's account or the date on which the amount of the transfer was credited to the client's account.

If the authorising officer has determined that the price for the execution of the transfer or part thereof will be paid by the beneficiary (§ 10), the beneficiary must inform the transferring institution thereof. If the transferring institution has carried out a exchange rate conversion, it shall inform its client of the exchange rate used.

§ 8

Time limits for carrying out transfers

(1) The transferring institutions shall carry out transfers within the time limits set out in paragraphs 2, 3 and 5, unless there is a legal reason to extend the period. 7)

(2) If the transferring institution conducts transfers to the Czech Republic in Czech currency

(a) between different transferring institutions, it shall ensure that the amount of the transfer is credited to the account of the transferring institution of the payee and that the supporting documents necessary to provide the transfer amount to the payee are transmitted no later than the following bank working day after the effective date of the transfer order, unless a shorter period has been agreed;

(b) within the same transferring institution, it shall provide the amount of the transfer to the recipient on the date on which the transfer order takes effect or on the following bank working day, unless the transfer order is effective on the bank working day.

(3) Where the transferring institution conducts a cross-border transfer to the originator, it shall ensure that the amount of the transfer in favour of the transferring institution of the beneficiary is credited and that the supporting documents necessary to provide the transfer amount to the payee are transmitted to it within a period agreed with the originator; If no such deadline is agreed, within 5 working days of the effective date of the transfer order.

(4) A bank working day shall mean the day on which all the transferring institutions participating in the implementation or mediation of the relevant part of the transfer normally carry out their activities.

(5) The transferring institution of the payee shall credit the transfer amount to the payee's account or shall ensure that the transfer amount is made available to the payee, no later than the following bank working day after the date on which the transfer amount was credited to the payee's transferring institution's account and that the transfer institution has received the supporting documents necessary to provide the transfer amount to the payee, unless a shorter deadline has been agreed.

(6) If the transferring institution of the beneficiary cannot identify the payee of the amount of the transfer, it shall return the transfer amount without undue delay to the transferring institution of the originator.

(7) If the beneficiary does not exceed the amount of the transfer available to him or if it is not able to transfer that amount to him due to obstacles on the part of the beneficiary, the transferring institution shall return the amount of the transfer to the transferring institution of the originator within 3 bank working days of the expiry of 6 weeks from the crediting of the transferring institution of the recipient, unless otherwise agreed between the beneficiary and its transferring institution or between the originator and its transferring institution.

§ 9

Interest on late payments

(1) If the transferring institution of the authorising officer fails to comply with the deadline for the execution of the transfer set out in Article 8 (2) or (3), the authorising officer shall pay interest on the delay. If the transferring institution of the beneficiary fails to comply with the deadline for granting the amount of the transfer to the beneficiary pursuant to Article 8 (5), it shall pay interest on the late payment to the beneficiary.

(2) If the non-compliance with the deadline for the execution of the transfer to the account of the transferring institution of the payee pursuant to Article 8 (2) (a) or Article 8 (3) is due to the intermediary transferring institution, the transferring institution shall pay interest on the delay to the transferring institution of the originator.

(3) Interest on late payments shall be calculated on the amount of the transfer; the interest rate laid down in the specific legislation shall be used for the calculation of the interest on late payments. 8)

(4) The transferring institution of both the originator and the transferring institution of the payee shall pay interest on late payments, even if failure to comply with the deadline for the execution of the transfer does not cause the transfer to be carried out; the obligation to pay interest on late payment shall be waived only if they prove that the failure to comply with the time limit for execution of the transfer has been caused by the authorising officer or recipient of the amount of the transfer, or that the failure to comply with the time limit for transfer has resulted from the circumstances set out in Section 13.

(5) In addition to interest on late payments, the authorising officer, the beneficiary or the transferring institution shall be entitled to compensation; other their rights are not affected.

§ 10

Prohibition of any deduction from the amount of transfer

(1) The transferring institution of the authorising officer, the intermediate transferring institution and the transferring institution of the beneficiary shall be obliged to transfer the full amount of the transfer without any haircuts. This is without prejudice to the right of the transferring institution of the beneficiary towards the beneficiary to pay the prices related to the management of his account, provided that the provisions of the first sentence are not thereby circumvented, in particular that these prices will not be higher in the case of cross-border transfers than in the case of transfers carried out in the Czech Republic.

(2) Paragraph 1 shall not apply if the authorising officer determines that the price of the transfer or part thereof shall be paid by the beneficiary.

(3) Where the transferring institution of the authorising officer or intermediate transferring institution infringes the obligation laid down in paragraph 1, the transferring institution of the authorising officer shall, at the request of the authorising officer, return the amount unduly withheld or charged to the payee, unless it is required to be returned by the authorising officer at its own expense and without any deduction.

(4) Where the obligation laid down in paragraph 1 is infringed by the intermediate transferring institution, it shall return the amount unduly deducted or charged at its own expense and without any deduction to the transferring institution of the originator or, if the transferring institution so requests, to the recipient.

(5) If it infringes the obligation laid down in paragraph 1, the transferring institution of the beneficiary shall be obliged to repay the amount unduly deducted or charged at its own expense and without any deduction to the beneficiary.

§ 11

Obligations in case of unsuccessful transfer

(1) If, after the transfer order has been effective, the transfer is not carried out within the time limit laid down in Article 8 (2) or (3), nor has the amount of the transfer been repaid in accordance with Article 8 (6) or (7), and if requested by the authorising officer, the transferring institution shall provide the authorising officer with the amount of the transfer, plus interest on the delay and the price of the transfer already paid by the authorising officer. The transferring institution of the authorising officer shall comply with this obligation within 14 bank working days of receipt of the request by the authorising officer; they shall be discharged only if, within that period, the amount of the transfer has been credited to the account of the transferring institution of the beneficiary. If the transferring institution fulfils this obligation, it shall no longer be obliged to complete the transfer.

(2) Interest on late payment shall be calculated on the amount of the transfer for the period from the effective date of the transfer order to the date of delivery of the amount referred to in paragraph 1 by the authorising officer. In calculating the interest on late payment, the interest rate laid down in the special legislation.8) Where interest on late payments has been provided pursuant to paragraph 1 or paragraph 3, neither the originator nor the transferring institution shall have interest on late payments in accordance with Article 9.

(3) Any intermediate transferring institution which has received an order from another transferring institution to execute a transfer order shall be required to return at its expense the amount of the transfer, including interest and prices, to the transferring institution which has instructed it to execute the transfer order. In the case of cross-border transfers, the intermediate transferring institution shall return to the transferring institution which instructed it to execute the transfer order the amount of the transfer only up to the amount of the consideration of EUR 12 500, plus interest on late payments and the price of the transfer received.

(4) Where the unsuccessful transfer is caused by the transferring institution chosen by the transferring institution of the beneficiary, paragraph 1 shall not apply. The transferring institution of the beneficiary shall provide the amount of the transfer to the beneficiary. The obligation of the transferring institution of the originator to carry out the transfer is thus fulfilled.

(5) If the reason for the unsuccessful transfer was errors or incomplete data in the transfer order given by the authorising officer to his transferring institution, or if the unsuccessful transfer was caused by the intermediate transferring institution chosen by the authorising officer, the provisions of paragraph 1 shall not apply. All transfers by the participating transferring institution shall be subject to the obligation to make all efforts which may be required to locate and return the amount of the transfer to the transferring institution of the originator. Interest and charges paid in the course of the transfer shall not be refunded by those transferring institutions and shall be entitled to reimbursement of the costs incurred in recovering the amount of the transfer to the sending institution. If the transferring institution of the authorising officer has identified or has been repaid the amount of the transfer, it shall repay the amount of the transfer less the cost incurred.

(6) In addition to providing the amount of the transfer and the interest on late payment, the authorising officer, the beneficiary or the transferring institution shall be entitled to compensation; other their rights are not affected.

§ 12

Dispute settlement

Disputes arising between transferring institutions and their clients in carrying out transfers of funds under this Part of the Act may be referred to the Dispute Settlement Body acting under a special law. The right of the client to refer to the court is not affected by this.

§ 13

Unforeseeable obstacles

If the transferring institution proves that it has been prevented from fulfilling the obligations set out in this Part of the Act by unpredictable obstacles arising independently of its will and it cannot be assumed that such obstacles or consequences could be averted or overcome, it shall be free of liability for failure to fulfil those obligations.

§ 13a

Licences for transfers of funds

(1) The application for a licence for transfers of funds (hereinafter referred to as "the application") is submitted to the Czech National Bank.

(2) The Czech National Bank shall grant a licence for transfers of funds if:

(a) the applicant, the person who is a member of the applicant, the statutory body of the applicant, the member of the applicant's statutory authority, the person who will carry out or mediate transfers of funds for the applicant, and the actual owner of the applicant under the law on certain measures against the legalisation of the proceeds of crime and terrorist financing (hereinafter referred to as "the beneficial owner") shall be persons who are eligible under paragraph 3; and

(b) the person who will manage the applicant's business shall be a good person and have the appropriate training referred to in paragraph 5.

(3) For the purposes of this law, a person who has been convicted of a criminal offence shall not be regarded as a person of integrity.

(a) committed intentionally,

(b) committed by negligence the nature of which is linked to the subject of the business;

if she is not looked at as if she was not convicted 8b).

(4) integrity is demonstrated

(a) in the case of a natural person with a place of permanent residence or other residence in the Czech Republic, a record of the Register of Penalties, not more than 1 month old; This does not apply where the Czech National Bank can request this extract under a specific law,

(b) in the case of a foreign natural person and in the case of a person who has remained continuously outside the territory of the Czech Republic for more than 6 months in the last 5 years by means of evidence similar to that of the record of the Register of Penalties issued by the competent authority of the State of permanent or other residence of that person and of States in which that person has remained continuously for more than 6 months in the last 5 years. If the State of permanent or other residence of that person is not the same as the State of which that person is a citizen, also a document issued by the State of which he is a citizen.

(5) The corresponding education for the purposes of this Act is such an education, including that obtained by practice, which enables the licensed activity to be carried out and to fulfil the obligations associated with its implementation under the law of the Czech Republic. Completed secondary education8c) is always considered equivalent education. A working experience with an activity registered or licensed under this Act of at least 6 months shall be considered to be sufficient practice. The recognition of professional qualifications of beneficiaries shall be governed by the law on the recognition of professional qualifications 8d).

(6) The transfer licence is granted for an indefinite period and is not transferable to another person or transferred to a successor in title.

§ 13b

Application for a licence to transfer funds

(1) In addition to the formalities laid down in the administrative rules, the application shall also contain:

(a) basic information on the applicant;

(b) paper documents and documents.

(2) The basic data on the applicant referred to in paragraph 1 (a) are:

(a) if the applicant is a legal person, the date on which it is established and the State of registration;

(b) where the applicant is a natural person, citizenship and the travel document number of a foreign natural person;

(c) the name and surname, citizenship, date of birth and address of the permanent or other person who will manage the applicant's business and the beneficial owner.

(3) The documents and documents referred to in paragraph 1 (b) are:

(a) where the applicant is a legal person

1. an extract from the Commercial Register not more than 1 month old; a legal person who is not registered shall provide proof of its existence; a foreign legal person submits a document of a similar nature not older than 1 month;

2. a document proving the integrity of the statutory authority or members of the statutory authority of the applicant and of the person managing the applicant's business and the beneficial owner;

3. documents and documents proving that the person who will manage the applicant's business has received appropriate training in accordance with § 13a (5);

4. evidence of citizenship and the address of permanent or other residence of persons who are members of the applicant, the statutory body of the applicant or members of the statutory body of the applicant; where a member is a legal person, the document referred to in point 1 and the details for identifying its members only after the identification of specific natural persons and for identifying members of its statutory body or persons who are its statutory body;

5. Declaration by the applicant that all data and documents submitted by him are up to date, complete and true,

(b) if the applicant is a natural person:

1. an extract from the Commercial Register not more than 1 month old; the person who is not registered shall submit the relevant business authorisations; a foreign natural person shall submit a document of a similar nature not older than 3 months;

2. a document proving the integrity of the applicant, the person managing the applicant's business and the beneficial owner;

3. documents and documents proving that the person who will manage the applicant's business has received appropriate training in accordance with § 13a (5);

4. a statement by the applicant that all data and documents submitted by him are up to date, complete and true.

§ 13c

Measures to remedy

(1) The Czech National Bank oversees compliance with the conditions under which a transfer licence has been granted.

(2) If the Czech National Bank finds that the conditions under which the transfer of funds has been granted have been infringed, it may, depending on the nature and gravity of the infringement:

(a) require the transferring institution to make a correction within the prescribed time limit;

(b) suspend the exercise of the activities resulting from the licence to transfer funds until the transferring institution has remedied;

(c) withdraw a licence for transfers of funds from the transferring institution.

§ 13d

Withdrawal of a licence for transfers of funds

(1) If a transfer licence has been obtained on the basis of false information provided in the application, the Czech National Bank shall withdraw the transfer licence to the transferring institution.

(2) The Czech National Bank will withdraw the transfer licence at the request of the holder.

(3) The decision to withdraw the licence for transfers of funds shall specify the date on which the licence is withdrawn; the decision shall be published in the Trade Bulletin.

§ 13e

Termination of the transfer licence

The transfer licence shall expire on the date of:

(a) the decision to withdraw the licence to transfer funds has become final;

(b) where a natural person has died or the legal person which is the transferring institution has been revoked;

(c) from which, according to the decision of the transferring institution, it will no longer pursue the activity to which the transfer licence is required.

ČÁST TŘETÍ

ISSUING AND USE OF ELECTRONIC PAYMENTS

§ 14

Basic provisions

(1) According to this part of the law,

(a) banks, branches of foreign banks, the Czech National Bank, savings and credit cooperatives, electronic money institutions (§ 18b), foreign banks and foreign electronic money institutions which operate on the territory of the Czech Republic on the basis of a single licence pursuant to the Bankach9 Act, as well as other persons who issue electronic means of payment (§ 15 (1)) as a business where all such entities issue electronic means of payment on the territory of the Czech Republic (hereinafter referred to as the publisher),

(b) persons using electronic means of payment (hereinafter referred to as "the holder") under contract with the issuer.

(2) According to Section 20, banks, savings and credit cooperatives and electronic money institutions are also active outside the Czech Republic.

(3) Paragraphs 18b (3) and 18c to 18f apply to electronic money institutions in their activities outside the Czech Republic. This does not apply to requirements for the internal management and control system of an electronic money institution (Section 18d (4)) for liquidity risk management.

§ 15

Electronic means of payment and electronic money

(1) The electronic means of payment is:

(a) a means of remote access to the monetary value, using which, as a rule, the holder is required to be identified by a personal identification number assigned by the issuer or by other means;

(b) electronic means of money.

(2) An electronic means of money is a means of payment which keeps the monetary value electronically.

(3) Electronic money is the monetary value which:

(a) constitutes a claim on the issuer;

(b) is stored on an electronic means of money;

(c) is issued against receipt of funds at a value not less than the value of the electronic money issued; and

(d) is accepted as a means of payment by persons other than their issuer.

(4) The funds received are not a deposit under the Bank Act if the person entitled to issue electronic money (Paragraph 18a) is immediately exchanged for electronic money.

§ 16

Model trading conditions

In order to protect the holders, the Czech National Bank issues model trading conditions which contain an adjustment of the mutual rights and obligations of publishers and holders when issuing and using electronic means of payment. The first model trading terms will be issued by the Czech National Bank on the date of entry into force of this Act. Model business conditions and changes are published in the Bulletin of the Czech National Bank.

§ 17

Terms and conditions of the publisher

(1) The issuer shall inform interested parties of the issue of an electronic means of payment of its commercial conditions for the issue and use of electronic means of payment in good time before the electronic means of payment are issued.

(2) In the initial provisions of its commercial terms and conditions for the issue and use of electronic means of payment, the publisher is obliged to explicitly inform whether these conditions correspond to the standard commercial conditions of the Czech National Bank issued pursuant to § 16 and what the content of any derogations is.

(3) The obligation referred to in paragraph 2 shall be fulfilled by the publisher within 3 months of the date of issue of the Model Commercial Terms and Conditions of the Czech National Bank or their amendment.

(4) The publisher shall provide his or her trading conditions issued under paragraphs 1 to 3 to the Czech National Bank without undue delay after their issue or amendment.

§ 18

Use of electronic means of payment remotely

If an electronic means of payment has been used,

(a) without being physically submitted; or

(b) without identification of the holder by a personal identification number or by other means, unless the nature of the electronic means of payment makes it impossible to present it physically,

and if the holder declares that he has not used the electronic means of payment, he / she shall have the right to request from the publisher an immediate refund of the funds withdrawn by such use of the electronic means of payment.

§ 18a

Persons authorised to issue electronic money

Electronic money may be issued only

(a) banks and branches of foreign banks, where they have a licence to issue and manage means of payment;

(b) foreign banks where they are entitled to issue payment funds in the territory of the Czech Republic by a single licence under the Bank9 Act;

(c) savings and credit cooperatives for their members, provided that they have in their authorisation the activity of issuing and managing payment instruments;

(d) electronic money institutions (§ 18b);

(e) foreign electronic money institutions which operate under this Act on the territory of the Czech Republic on the basis of a single licence;

Citation	Act No. 124 / 2002 Coll., on transfers of funds, electronic means of payment and payment systems (Law on payment transactions)
Regulation Type	Law
Author	-
Collection	Code of Laws

Date of Promulgation	12.04.2002
Effective from	01.01.2003
Effective until	-
Status	Valid

Act No. 124 / 2002 Coll.

Law on transfers of funds, electronic means of payment and payment systems (Law on payment transactions)

Contents