EU Acts To Cut Fees For Cross-Border Payments In Non-Eurozone Member States

The pesky EU is at it again, this time trying to level the playing field for EU consumers and businesses by putting an end to the high cost of cross-border payments in currencies of Member States outside the Eurozone. Only Sweden took up the option to align the fees charged for those cross-border payments in Swedish krona with fees for krona payments within Sweden. Other non-Euro area countries, like the UK, did not oblige their banks to invest in the systems to do this. So, the European Commission is proposing a regulation to force banks in those Member States to cut their fees.

I've experienced the problems personally, as would anyone doing business across borders, travelling for business or pleasure, or shopping internationally online.

Business payments

Expecting the worst from Brexit (but hoping the whole fiasco will end with the UK remaining in the EU), I've added an Irish side to my business. That means getting paid in Euros and changing into GBP (if the funds are needed in the UK at all). To receive international payments to my GBP business bank account, my bank says I need an extra current account on its commercial banking platform (which I won't be able to see through the online access to my normal business current account). For that extra account, I'll have to pay £20 a month, plus their charge for converting each payment, plus their margin on the foreign exchange rate.

Compare that to £0 for receiving a UK payment in GBP to my existing, fee-free UK current account!

A study by Deloitte revealed other examples that punish small and medium sized businesses, as well as consumers.  It costs €24 to send €500 from Bulgaria to Finland, for instance, but sending €500 from Finland to France is like any normal payment within Finland or France - which is what the Commission wants to see in the non-Euro area.

Travelling or shopping

On a more personal level, you'll also be familiar with the tedious additional "choice" that everyone is forced to make when the currency of their payment card is different to the local currency. It's not so intrusive online, but a real pain for both you and the person serving you in a crowded shop, bar or restaurant. You have to be asked, or indicate on the card terminal whether you want (a) the "dynamic currency conversion" option, to pay in the currency of your card (at an unspecified rate that may include both margin for the local bank service provider and 'spread' for the retailer); or (b) to pay in the local currency, taking the risk that the conversion rate via the card scheme and your own bank's foreign transaction charge (if any) that you eventually see on your card statement will mean you're at least no worse off than whatever the local conversion rate was.

In this case, the Commission is proposing a short term cap on conversion costs, then a new model that shows you the actual cost of those options before you choose one.

After all, it's just data, folks! 

Cost Savings

The Commission found that extending the new rule from Euro transactions in the Eurozone to non-Eurozone Member States will save the affected customers €900m a year. That's because (a) the banks already have access to the modern system required, (b) at least 60% of cross-border transactions in the non-Eurozone Member States occur in Euros and (c) the cost of domestic transactions in those states is already low and couldn't be raised to subsidise the savings on the cross-border Euro transactions under competition rules.

It's worth noting that Eurozone banks did not raise fees when the first controls were imposed on cross-border payments in Euros - and in fact charges steadily decreased. Nor did Swedish service providers suffer when Sweden opted to extend the scheme to the krona.

Personally, I'm going to ignore the bank for my Euro payments until it gets its house in order - which might be never anyway. Even if the Euro/GBP conversion charge drops to zero, I'm sure it will still oblige me to take the commercial account on the more expensive platform and pay £20 a month for the privilege. It will argue that the move to a new current account does not relate to any single payment transaction or conversion, even though that's the only purpose I'd be taking the extra account.

No, what I'm going to do instead is open an account with one of the new foreign currency providers, so that a law firm can pay the provider in Euros, and the provider will pay me in GBP for a small, flat fee. 

FinTech wins again!

Ah, but Brexit...

Of course, all bets are off if the UK leaves the EU and decides to diverge from the EU trade rules relating to financial services.

In that case, banks - like telecoms companies who hate the EU's limit on roaming charges - will heave a sigh of relief.

Big business doesn't refer to the UK as "Treasure Island" for nothing!

The Irony Or The Ecstasy? The UK Centre For Data Ethics And Innovation

You would be forgiven for uttering a very long string of properly ripe expletives on learning that the current UK government has the cheek to create a "Centre for Data Ethics and Innovation"!  Personally, I think they've missed a trick with the name. With a little more thought, the acronym could've been "DECEIT" - and maybe in some languages it would be - so let's go with that.

You might say that it's better to have, rather than not have, an 'independent' policy body focused on the use of data and "artificial intelligence", even if it's set up by a government controlled by those who masterminded and/or benefited from the most egregious abuse of data ethics in UK history.

Or you might be relieved by the notion that it's easier for the dominant political party of the day to control the ethical agenda and results achieve "the best possible outcomes" if the source of policy on data ethics is centralised, especially within a body being hastily set up on the back of a quick and dirty consultation paper released into the febrile, Brexit-dominated summer period before any aspirational statutory governance controls are in place. 

At any rate, we should all note that:

"[DECEIT], in dialogue with government, will need to carefully prioritise and scope the specific projects within its work programme. This should include an assessment of the value generated by the project, in terms of impact on innovation and public trust in the ethical use of data and AI, the rationale for [DECEIT] doing the work (relative to other organisations, inside or outside Government) and urgency of the work, for example in terms of current concerns amongst the public or business."

...

"In formulating its advice, the Centre will also seek to understand and take into consideration the plurality of views held by the public about the way in which data and AI should be governed. Where these views diverge, as is often the case with any new technology, the Centre will not be able to make recommendations that will satisfy everyone. Instead, it will be guided by the need to take ethically justified positions mindful of public opinion and respecting dissenting views. As part of this process it will seek to clearly articulate the complexities and trade offs involved in any recommendation."

Political point of view is absolutely critical here. This UK government does not accept that the Leave campaign or Cambridge Analytica etc did anything 'wrong' with people's data. Senior Brexiteers say the illegality resulting in fines by the Electoral Commission and further investigation by the ICO and the police are merely politically motivated 'allegations' by do-good Remainers. Ministers have dismissed their own "promises" (which others have called "fake news" outright lies and distortion) as merely "a series of possibilities". There is no contrition. Instead, the emerging majority of people who want Brexit to be subjected to a binding vote by the electorate are regarded as ignoring "public opinion" or "the will of the people" somehow enshrined forever in a single advisory referendum in 2016; and as therefore expressing merely "dissenting views".

Against this gaslit version of reality, the creation of DECEIT is chilling.

Meanwhile, you might ask why there needs to be separate silo for "Data Ethics and Innovation" when we have the Alan Turing Institute and at least a dozen other bodies, as well as the Information Commissioner, Electoral Commission and the police. Surely the responsibility for maintaining ethical behaviour and regulatory compliance are already firmly embedded in their DNA?

I did wonder at the time of its formation whether the ATI was really human-centric and never received an answer. And it's somewhat worrying that the ATI has responded to the consultation with the statement "We agree on the need for a government institution to devote attention to ethics". To be fair, however, one can read that statement as dripping with irony. Elsewhere, too, the ATI's response has the air of being written by someone with clenched teeth wondering if the government really knows what it's doing in this area, anymore than it knows how to successfully exit the EU:

We would encourage clarity around which of these roles and objectives the Centre will be primarily or solely responsible for delivering (and in these cases, to justify the centralisation of these functions), and which will be undertaken alongside other organisations.

... We would encourage more clarity around the Centre’s definitions of AI and emerging technologies, as this will help clarify the areas that the Centre will focus on.

Reinterpreting some of the ATI's other concerns a little more bluntly yields further evidence that the ATI smells the same rat that I do:

• DECEIT will have such a broad agenda and so many stakeholders to consider that you wonder if it will have adequate resources, and would simply soak up resources from other stakeholders without actually achieving anything [conspiracy theorists: insert inference of Tory intent here, to starve the other stakeholders into submission];
• the summary of "pressing issues in this field" misses key issues around the accountability and audibility of algorithms, the adequacy of consent in context and whether small innovative players will be able to bear inevitable regulations;
• also omitted from the consultation paper are the key themes of privacy, identity, transparency in data collection/use and data sharing (all of which are the subject of ongoing investigation by the ICO, the police and others in relation to the Leave campaign);
• the ATI's suggested "priority projects" imply its concern at the lack of traction in identifying accountability and liability for clearly unethical algorithms;
• powers given to DECEIT should reinforce its independence and "make its abolition or undermining politically difficult";
• DECEIT's activities and recommendations should be public;
• how will the "dialogue with government" be managed to avoid DECEIT being captured by the government of the day?
• how will "trade offs", "public opinion" and "dissenting views" be defined and handled (see my concerns above)?

I could add to this list concerns about the government's paternalistic outlook instead of a human-centric view of data and technology that goes beyond merely 'privacy by design'. The human condition, not Big Tech/Finance/Politics/Government etc, must benefit from advances in technology.

At any rate, given its parentage, I'm afraid that I shall "remain" utterly sceptical of the need for DECEIT, its machinations and output - unless and until it consistently demonstrates its independence, good sense, not to mention ethics. 

For Your Personal Brexit Preparations: Which EU Countries Allow Dual Citizenship?

While I hope Brexit will be stopped, I'm expecting and preparing for the worst. So, with only two months before the EU approval process would need to start and Brexidiots in charge on the UK side, I'm expecting the UK to 'crash out' on 29 March 2019, without agreeing the terms of withdrawal (let alone any deal on future trade).

As a self-employed lawyer, there's both the professional and personal angles to consider.

Professionally, my UK legal qualifications will no longer be recognised in the EEA. So, I need to get qualified in an EEA state in order to continue credibly advising my UK clients on their EEA business activities, and advise my EEA clients on their UK activities. The only realistic option is adding an Irish legal practising certificate and consulting through an Irish law firm. Ireland will be the only truly common law jurisdiction left in the EEA, as both Malta and Cyprus have a mix of civil and common law, and it's laws are still very similar to the law in England and Wales.

That rather costly process is well underway, as previously explained.  

But that doesn't mean I personally have the right to live in Ireland, of course. So the question remains whether I could replace my UK right to live and work anywhere in the EEA by means of citizenship in the remaining 27 EU member states or one of the 3 EEA member state (Norway, Iceland or Liechtenstein) - without losing my UK and Australian passports? 

As the EU Parliament research reveals, there are differing national approaches to being or becoming a citizen of the various EU member states. But the key issue is whether your favoured country allows you to retain your UK (or other) citizenship. For instance, the following countries would require you to give up your UK citizenship in order to become a citizen there:

• Austria 
• Bulgaria 
• Croatia 
• Czech Republic
• Denmark 
• Estonia 
• Germany
• Latvia 
• Lithuania 
• Netherlands 
• Slovenia 
• Spain

So there goes any chance of moving to, say, Barcelona or Mallorca without first becoming a citizen elsewhere in the EEA.

Unfortunately, given the dual nationality of my spouse and children, of the 3 additional EEA countries, only Norway requires you to renounce your other citizenship(s) if you wish to become a citizen there (i.e. rather than automatically having it by birth etc) -  although a change in the law has just been submitted to the Norwegian parliament. 

Otherwise, the options are as follows (excluding those where the EU research says you can still later lose your citizenship by living somewhere else):

• Belgium
• Cyprus 
• Finland 
• France 
• Greece 
• Hungary 
• Ireland 
• Italy 
• Luxembourg 
• Malta 
• Poland 
• Portugal 
• Romania 
• Slovakia 
• Sweden

and 

• Iceland
• Liechtenstein 

Remember, any port in a storm...

Brexit Britain Has Plenty of Adolf von Kleists But No Hernando Cruz

In his short novel, Galápagos, Kurt Vonnegut looked back a million years from 1986 on the extinction of the human race as we know it, tracing the plight of the passengers and crew on an environmental tour to the famous islands, billed "The Nature Cruise of the Century". Half way through, Vonnegut describes the critical moment when the highly experienced Hernando Cruz, having supervised the delivery and outfitting of the doomed Bahía de Darwin, suddenly abandons the cruise to save his family, leaving the final voyage in the hands of the ignorant, incompetent buffoon, Adolf von Kleist:

"If 'the Nature Cruise of the Century' had come off as planned, the division of duties between the Captain and his first mate would have been typical of the management of so many organizations a million years ago, with the nominal leader specializing in sociable balderdash, and with the supposed second-in-command burdened with the responsibility of understanding how things really worked, and what was really going on.

The best-run nations commonly had such symbiotic pairings at the top. And when I think about the suicidal mistakes nations used to make in olden times, I see that those polities were trying to get along with just an Adolf von Kleist at the top, without an Hernando Curz. Too late, the surviving inhabitants of such a nation would crawl from the ruins of their own creation and realize that, throughout all their self-imposed agony, there had been absolutely nobody at the top who had understood how things really worked, what it as all about, what was really going on."

Sound familiar?

Where Will You Be On 30 March?

You might be hoping for an end to Brexidiocy, but unless you've been hiding under a rock, you'll be expecting that the UK will leave the EU without agreeing how to do so in an orderly fashion. 

That means EU trade terms will cease to apply in 8 months' time, as of 30 March.

The European Commission is more advanced in its preparations for Brexit, as the remaining 27 member states ('the EU27') will expect officials to enforce the UK's exclusion from the EU trade bloc and the European Economic Area (the EU, plus Norway, Liechtenstein and Iceland). 

The EU says there are 7 possible steps everyone might need to take, regardless of where they live. The EU has also published its Brexit preparations, including certain "preparedness notices" as well as legislation and other activities, like risk management.

My own preparations involve adding a legal practising certificate for Ireland and signing up with an Irish law firm to keep advising my clients on their EU-facing operations and the EU aspects of cross-border data protection issues. That's step 3 on the EU's top tips for Brexit.

Given that the UK government is planning on the basis of shortages in food and medicine, I'm also inclined to recommend that the family takes advantage of my wife's dual citizenship to relocate for a month or two until things settle down, if indeed they ever really do.

But I think we'll end up toughing it out in London, where I hope the evidence of the UK's continuing decline will be gradual, rather like when the Romans left Britain 1600 years ago. Over the next 40 to 60 years money will cease to circulate widely and the bulk of the population will abandon stone and concrete buildings for wooden huts and tents before they largely succumb to famine and disease...

Inevitably, however, another batch of Europeans will eventually arrive, attracted to the underpopulated wasteland on their frontier. Perhaps they'll bring wine, pasta, hair pins and exotic perfumes, a method for conveying water over long distances and sponges for toiletry use...

Then the whole, sorry cycle will repeat itself, post nauseam.