Serbia Prepares for SEPA: New Rules for Euro Payments

The National Bank of Serbia has been undertaking activities for some time now to implement and enforce European Union directives in the field of payment services and systems, as well as with the aim of adjoining Serbia to the SEPA area, which is important not only because of the volume of foreign trade with the EU, but also because of the numerous benefits that such accession would bring to domestic entities in terms of faster, more efficient and cheaper payment transactions with entities from the EU, but also the entire region.

SEPA AREA

The introduction of the Single Euro Payments Area (SEPA) was initiated in 2002, after the introduction of the euro as a common currency, with the aim of efficiently performing both national internal payments and cross-border payments between EU member states.

According to the data from the European Central Bank, the SEPA area includes 36 countries, namely 27 EU member states, member states of the European Economic Area (Iceland, Liechtenstein and Norway), as well as San Marino, Monaco, Andorra, the Vatican, Switzerland and the United Kingdom.

The Republic of Serbia began the first phase of accession in 2014 by adopting the Law on Payment Services, as well as other regulations in the field of banking and the prevention of money laundering and terrorist financing. This was followed by the connection of the payment infrastructures of the Western Balkans to the European Central Bank’s instant payment system – TIPS (Target Instant Payments Settlement).

In connection with fulfilling regulatory prerequisites within the framework of joining the SEPA area, the National Bank of Serbia has amended the following decisions in the field of foreign exchange operations:

• the decision on the conditions and method of performing international payment transactions, and
• the decision on the conditions under which and the manner in which residents may hold foreign currency in an account with a bank abroad.

Both decisions entered into force on February 22, 2025, but will be applied with a delay, i.e. from the date of the Republic of Serbia’s accession to the Single Euro Payments Area (SEPA).

GENERAL RULES FOR PAYMENTS, COLLECTIONS AND TRANSFERS WITHIN THE SEPA AREA

In accordance with the decision regulating special rules for the execution of credit transfers and direct debits in euros, all payments, collections and transfers made within the Single Euro Payments Area – SEPA, will be executed in accordance with the SEPA rules for the execution of payment transactions within the meaning of that decision.

Namely, the changes concern collections from and payments to abroad, in the sense that collections in euros within the SEPA area are carried out by the bank immediately crediting the funds to the account of the collection user – if the funds for the collection are approved in its account, or if it has received the information necessary for the approval of the collection user’s account, and that the bank is obliged to enable the collection user to dispose of the funds immediately after the approval of those funds in their account. Based on the above, it can be concluded that the obligations of the collection user have remained unchanged regardless of whether it is a collection in euros within the SEPA area or other payment transactions, but the main difference lies in the moment of approval of the funds to the collection user’s account.

As for payments abroad, the provision has been amended according to which a resident, in addition to the moment of submitting a payment order, may in the future also submit to the bank a document on the basis of which the payment is made before submitting that order. Accordingly, it will be deemed that the resident has given the bank consent to the payment not on the date of submitting the payment order, but on the date on which the bank received the document on the basis of which the payment is made – if the document on the basis of which the payment is made is submitted to the bank after submitting the payment order.

When a payment abroad is made by direct debiting the resident’s bank account, the document on which the payment is made shall be submitted with the consent. Otherwise, it shall be deemed that the resident has not given consent to the payment abroad by direct debiting the account.

The previous obligation of the bank and the resident to keep the payment order for 10 years from the date the payment was made has been extended to include the obligation to keep the consent for direct debiting of the resident’s account with the bank, which must be kept within the same period of 10 years from the date the payment was made.

HOLDING FOREIGN CURRENCY IN A BANK ACCOUNT ABROAD

The decision on holding foreign currency abroad prescribes the conditions and manner in which residents may hold foreign currency in an account with a bank abroad, and the amendments relate to cases in which residents may perform deposit transactions abroad without the obligation to obtain approval from the National Bank of Serbia.

According to the current amendment, foreign currency in a bank account abroad may in the future be held by payment institutions and electronic money institutions that, as payment service providers, execute payment transactions within the SEPA area, in accordance with the decision regulating special rules for executing credit transfers and direct debits in euros.

Previously, the Law on Foreign Exchange Operations already stipulated that a bank, as another payment service provider, could hold foreign currency in accounts with banks abroad without restrictions, except that in this newly prescribed case, foreign currency in accounts with the bank could be held exclusively for the purposes of executing those payment transactions.