OREANDA-NEWS. January 22, 2014. The European Commission announced a proposal to give an extra transition period of six months for the migration to SEPA, the Single Euro Payments Area, but the SEPA conditions will still start to apply from 1 February as planned.

The SEPA conditions will come into force in Estonia on 1 February and the Commission's proposal will not make any change to the timetable already in place.

“Banks and companies in Estonia are on schedule with their preparations and to the best of Eesti Pank's knowledge we are ready in Estonia to start making SEPA payments on 1 February. Proof of this is that half of the banks are already using the international IBAN format for account numbers in settlements between themselves, and half of all direct debits have been converted into e-invoices, which gives confidence that we will meet our initial plans” said Madis Muller, Deputy Governor of Eesti Pank.

If the Commission's proposal is confirmed, the half-year transition period will apply for those bank clients who are not ready to start making payments in the SEPA format by 1 February. This means that by agreement with the bank, it will be possible for clients to make payments in the old format until 1 August.

Estonia has already set up a one-year transition period for private clients, who will still be able to make payments using domestic account numbers, and for companies, who will be able to use a conversion service for the ISO messaging format by agreement with their bank. From 1 February 2015 it will only be possible to make payments under the SEPA conditions.

If a company does not manage to adopt the ISO messaging standard for bulk payments by February, banks may offer a conversion service for the messaging standard until 1 February 2015, but the conversion will not be automatic and companies will need to sign an agreement for this service with the bank. Book keepers will still have to make some changes for this, and the alternative is that all all payments must be entered through the internet bank one by one.