Implementing SEPA in Belgiu m

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1 SEPA Country Guide Belgium Implementing SEPA in Belgiu m All you need to know for a successful SEPA migration Introduction This document provides an overview of all the country specific information you need to successfully implement your migration to SEPA in Belgium. Intending to provide a global picture of the impact of SEPA on your organization, it will help you understand all the elements you need to take into account in order to migrate your payment activities. REGULATORY UPDATE: ADDITIONAL TRANSITION PERIOD The European authorities agreed on allowing banks and other payment providers to process payments that differ from the SEPA format for an extra six months (amending EU Regulation N 260/2012). As a consequence, all parties (e.g. corporates, SMEs and Public Administrations) may continue to send payments and collections through non-xml formats until 1 st of August Each Member State has taken a position towards the application of this proposal. In Belgium, legacy formats (such as CIRI for credit transfer and DOM80 for direct debit) are accepted until 1 st April 2014 (latest possible settlement date). Regarding direct debits, new mandates and new creditor Identifiers are not accepted under legacy scheme since 1 st February

2 SEPA Credit Transfers (SCT) Overview of the domestic formats Belgium is supporting one single domestic credit transfer, based on the CIRI format. If you are initiating credit transfers via Belgian channels in CIRI format, you must change your way of working in order to produce SEPA compliant files before 1st April Comparison of domestic and SEPA transfers properties It is important for you to understand the impact of switching from one scheme to another. In addition to using a new format, migrating to SEPA impacts your operational team and your beneficiaries. While choosing your migration approach, make sure you understand all the related impacts using the comparison table below. Does the local format allow SCT payments? Credit Transfer (CIRI-128 and CIRI-360) No: - The accounts are mentioned in domestic format and not in IBAN. 2 mandatory missing fields: - End2End reference - BICs of debtor and creditor s bank SCT NB: CIRI contains an extra field: Language preference of the beneficiary Book date / Value Debit: D date Credit: Standard: D+1 Settlement date Standard: D+1 D: Execution date set in the credit transfer Debit: D Credit: Standard: D+1 Standard: D+1 2

3 Implementing the PAIN.001 PAIN.001 is the XML standard used for communications between the debtor/initiator and their bank. In addition to considering the format provided by the EPC, two specific points must be taken into account: Choosing the correct version PAIN.001 currently exists in 3 versions. A company starting its migration today should implement the last version PAIN as indicated in the Rulebook 6 (downloadable from the EPC website). Local specificities regarding the PAIN.001 Belgian banks agreed to follow the standard EPC recommendations. The Belgian Banking Community also published implementation guidelines (known as Febelfin standards) in order to facilitate and standardise the implementation of SEPA for all corporates. You can download this document in English using the link below. Scroll down to Febelfin standards for distance banking. 3

4 SEPA Direct Debits (SDD) Overview of the domestic formats SEPA Country Guide Belgium Belgium has one single domestic direct debit format: the DOM80. This format will be no longer supported as of April, 1st From that date, creditors will have to use the SDD format to initiate direct debit collections. Since 1 st February 2014, new mandates and new creditor Identifiers are not accepted under legacy scheme. New creditors must therefore receive a SEPA creditor identifier. Debits concerning mandates signed after 1 st February 2014 must always be initiated in XML. Comparison of domestic and SEPA direct debits Regarding direct debits, it is particularly important to understand the consequences of switching from one scheme to another. In addition to using a new format, migrating to SEPA also impacts your operational team, and above all your customers. This is why, while designing your migration approach, you must make sure you understand all the related impacts using the comparison table below. DOM80 SDD Core SDD B2B Format CIRI (Flat files) XML XML Does the local format allow SDD collections? No, local format does not contain all necessary data to allow SDD. Cfr New mandatory mandate information in SDD collections Frequency Recurrent only Recurrent / One-Off Recurrent / One-Off Eligible debtor All All Business only* Collection sending date (D = payment due date) Mandate management and Archiving Refund right Pre-Authorization (the debtor s bank confirms the mandate with the debtor) Pre-Notification D-1 D-5 (First / One-off) D-2 (Recurrent) Debtor s bank Conditional refund right for consumers and professional users within 8 weeks after the date of debit for an authorized transaction. 13 months for an unauthorized transaction. No pre-authorization, since the mandate is managed by the debtor s bank Must be sent 5 days before the payment date D-1 (all) The creditor holds a paper version and manages the mandate Unconditional refund No refund right for an right within 8 weeks authorized transaction 13 following the date of months for an debit. unauthorized transaction 13 months for an unauthorized transaction Not required Debtor must confirm the mandate with his bank before first collection Must be sent 14 days Must be sent 14 days before payment date** before payment date** * In Belgium, micro enterprises are seen as businesses and can therefore be declared debtors of B2B mandates. ** The pre-notification time can be reduced if agreed upon by both the debtor and the creditor. New mandatory mandate information in SDD collections 4

5 Generating SDD implies using certain mandatory data regarding the mandate, that were not necessary in the DOM80 format. In addition to managing all the XML collection constraints, this means you will probably need to adapt your IT and/or operational processes in order to collect, store and send the following information: IBAN : the accounts of both the creditor and of the debtor must be included in the IBAN format. Debtor s bank BIC: this information is mandatory until the 1 st February 2014 for domestic transactions and the 1 st February 2016 for cross-border transactions. If you encounter difficulties in enriching the BIC of your debtor s banks, BNP Paribas can provide a service for automatic enrichment. Mandate reference : Each mandate should be identified by an unique mandate reference. If you were already using unique identifiers for your DOM80 mandates, you can continue using the same numbers. Date of signing: The date of signing of the original mandate must be mentioned in every collection. Implementation of the PAIN.008 (SDD Collection) Belgian banks agreed to follow the EPC standard recommendations, without any specifics. As for SCTs, the Belgian Banking Community also published implementation guidelines (known as Febelfin standards) designed to facilitate and to standardise the implementation of SDD by all corporates. You can download this document in English using the link below. Scroll down to Febelfin standards for distance banking. Mandate Migration The Regulation N 260/2012, article 7 Validity of mandates and right to a refund, allows that existing mandates within a legacy direct debit scheme continue to be used within SEPA. Migrating a mandate means that you already have a domestic mandate authorizing you to debit the account of one of your customer and that you will continue using the same mandate, only with SEPA compliant collections. A mandate is considered as migrated when its first related collection in SEPA format has been successfully performed. One of the benefits of the migration is that you can continue to debit your customers with no need for them to re-sign a SEPA mandate. To migrate your mandates, you should consider the two following major points: Schemes allowed for mandate continuity The existing DOM80 mandates remain valid for SDD Core. SDD B2B will always require the signature of a new mandate. 5

6 Migration rules In order to carry out collections in SDD format for existing DOM80 mandates, a creditor needs an overview of all DOM80 mandate related information such as direct debit numbers and account numbers in IBAN format. As DOM80 mandates are held by the debtor s banks, creditors do not have such information. The National Bank of Belgium (NBB) keeps a central database containing all mandates issued in Belgium by each creditor. This repository is updated monthly with all mandate data provided by Belgian banks and enriched with debtors BICs and IBANs. Creditors wanting to migrate to SEPA can ask their bank to collect this NBB file, thus providing them with all necessary data related to DOM80 mandates where they act as creditors. When collecting from an existing DOM80 mandate for the first time in SDD, the creditor is among others obliged to mention the DOM80 mandate identification number and his DOM80 creditor identification number in the XML file. This mechanism allows the debtor s bank to establish a link between the old mandate and the migrated one. As soon as the first SDD collection on an existing DOM80 mandate has been carried out successfully, the mandate is irreversibly migrated; the creditor is no longer allowed to collect via DOM80 on the concerned mandate. However, a creditor can continue using DOM80 for other mandates that have not yet been migrated. This means that a gradual migration is possible. SEPA Creditor Identifier (CI) In order to use SEPA direct debit, the first administrative step you must take is getting a SEPA Creditor Identifier. This number will identify your company wherever you will be collecting within the SEPA zone. Note that you can request one SEPA CI for each of your business activities. How to get a SEPA Creditor Identifier? You can get your SEPA Creditor Identifier via your preferred bank. It can then be used in any SEPA country, for any scheme and whichever bank you will collect through. SEPA Creditor Identifier format Positions 1 and 2: BE (ISO Code of Belgium) Positions 3 and 4 : Check digit Positions 5 to 7 : Creditor Business Code, to be chosen by the creditor (by default: ZZZ) Positions 8 to 20 : Company number (numéro d'entreprise / Ondernemingsnummer). Mandate information Types of mandate Belgian mandates are currently only available in paper format. Mandate Template Belgium proposes the usage of the standard EPC template, with just one specificity: A field underlying contract number must be integrated to the template. This will allow the contract leading the debtor to pay the creditor to be mentioned. 6

7 Conversion of BBAN to BIC + IBAN Conversion Service A free conversion software is provided by Febelfin, the Belgian banking community. This tool can be downloaded from The structure of an IBAN In Belgium, an IBAN contains 16 digits structured as follows: The first two digits identify the country: BE. The following two digits correspond to the standard IBAN check digit. The remaining twelve digits correspond to the current BBAN. Example: BE The structure of a BIC The current BBAN is composed of 12 digits, the first three of which are known as the protocol number and represent the financial institution (one given financial institution can have multiple protocol numbers). The exhaustive list of corresponding protocol numbers and BICs is available online from the Belgian National Bank website: 7