What is IBAN discrimination?
Article 9 of SEPA Regulation states that a payer or payee cannot specify the Member State in which the account to be debited/credited is located.
In spite of this clear provision, some European companies and public administrations refuse to make or receive payments (direct debits or credit transfers) to/from non-domestic accounts. This practice is called 'IBAN discrimination' and is in breach of SEPA Regulation.
'IBAN discrimination' poses hindrances not only to the individuals affected, who may - for instance - not be able to receive their salary or pay a utility bill, but also to many companies, including FinTechs. The practice of 'IBAN discrimination' does not assume the same extent in the various SEPA countries.
Eradicating IBAN discrimination
The European Commission has been receiving from citizens a large number of such complaints. It is committed to eradicating the illegal practice of IBAN discrimination and considers as important informing citizens and ensuring that they are directed to the right authorities when IBAN discrimination practices are identified. For more information, please use this link.
Similarly, the European Central Bank is explicit in the Eurosystem's updated retail payments strategy as regards assisting the European Commission and national authorities in addressing the illegal practice of IBAN discrimination.
Reporting IBAN discrimination encountered in Cyprus
If you have encountered any 'IBAN discrimination' in Cyprus (i.e. you have not been able to make or receive a SEPA credit transfer or pay via a SEPA direct debit from your bank account located in another Member State), you may contact the competent authorities, as follows: