July 16, 2012

25th CONGRESS

Proposal of a general nature

Amendment by United States of America

POSTAL OPERATIONS COUNCIL

Recommendation

Development of UPU regulations on postal accounts

Congress,

Recognizing
the role traditionally played by the UPU in the development of postal accounts through the Collection of Bills Agreement, the Giro Agreement and the International Savings Agreement, and in bringing banking services to the populations of the member countries that signed those Agreements,

Noting
that the 1989 Washington Congress decided to abolish the international savings service on the grounds that it could be more effectively provided by other systems (Congress–Doc 62),

Observing
that the 1999 Beijing Congress decided to remove from the Postal Payment Services Agreement all provisions relating to postal accounts and the procedures governing the depositing and execution of postal payment orders,

Bearing in mind
the estimated numbers of adults with access to accounts in developing countries, and even in industrialized countries, indicated in the 2011 document of the Financial Action Task Force (FATF) entitled "Anti-money laundering and terrorist financing measures and financial inclusion",

Noting also
the recommendations and impact analysis of the European Commission on access to basic payment accounts,

Recognizing also
the failings in developing countries and, to a lesser degree, in industrialized countries, of other systems aimed at bringing banking services to the most vulnerable population groups or people receiving social benefits from the state, and the importance of an open and transparent policy framework to attract public- and private-sector service providers in this regard,

Acknowledging
the postal network's potential as a facilitator for economic development, particularly in terms of the delivery of social benefits and the collection of taxes,

Reaffirming
the importance of access to basic accounts in pursuing the financial inclusion process and in developing
e-commerce,

Stressing
that the postal network, through its size and its accessibility, has a key role to play within the framework of financial inclusion policies and in efforts to achieve the Millennium Development Goals,

Wishing
to make basic account services accessible to as many persons as possible through the postal network,

Noting further
that the financial crisis has seen a massive influx of deposits into postal accounts in member countries where such accounts exist,

Recognizing further
the need for populations to have access to accounts for which overdrafts are not permitted, and the need for governments and/or central banks to have an additional tool available to assist them in their efforts to over­come the crisis, foster the development of postal infrastructure and revive the economy,

Observing also
the decline of the letter-post segment and the need for designated operators to diversify their activities accord­ingly,

Recognizing in addition:

– the need to build, or strengthen, synergies between the postal services founded on the Universal Postal Convention and the postal payment services, so as to foster the social and financial inclusion of populations while ensuring the long-term viability of the postal service and also provided that operations are conducted in a manner that encourages a level playing field for all providers of financial services;

- The ongoing work of the Organization for Economic Cooperation and Development on competitive neutrality which seeks to ensure that no entity operating in a market is subject to undue competitive advantages or disadvantages, and that private-sector operators face the same set of rules and have the same potential for providing financial services as state-owned providers of postal payment services;

– that, in order to harmonize and foster the development of the postal payment services at the international level and to ensure the financial inclusion of migrants and the development of international trade, it would be appropriate to include in the UPU Acts provisions on postal accounts (opening, management and closure) and to establish a link between these accounts and the postal payment services,

Aware
of the existence of national legislation on the prevention of money laundering, terrorist funding and financial crime in the opening and keeping of accounts, and of national regulations governing the activities of financial intermediaries (management of accounts, etc.),

Acknowledging also
that the management of credit risk requires a specific licence, issued by national financial oversight authori­ties in accordance with national legislation,

Noting in addition
that new technologies make it possible to manage basic postal accounts in real time,

Observing lastly
that the real-time management of postal accounts, combined with the use of pre-agreed means of payment, can avoid overdrafts and hence minimize credit risk,

Acknowledging in addition
that operations relating to the collection of funds and the opening, management and closure of accounts could be provided for in the UPU Acts,

Recommends
that the Council of Administration, in consultation with the Postal Operations Council:

– create an annual discussion forum with the central banks and/or financial oversight services of the member countries that signed the Postal Payment Services Agreement;

– define what constitutes a "basic postal account", in collaboration with the central banks and/or over­sight authorities;

– establish principles governing the collection of funds, in collaboration with the central banks and/or oversight authorities, and ensuring that operations are conducted in a manner that encourages a level playing field for all providers of financial services;

– define the link between the postal payment services and basic postal accounts;

– present proposals to the next Congress, with a view to including provisions on postal accounts in the UPU Acts.

Reasons – The global postal network contributes to financial inclusion, improved living standards, and broader economic and social development through the provision of basic financial services, often serving a need where no market exists. This work must be conducted within a regulatory framework that allows for both existing and potential private-sector financial service providers to operate under the same rules if an economy is to grow to its maximum potential. The Organization for Economic Cooperation and Development released an initial report at the May 2012 Ministerial, “Competitive Neutrality: Maintaining a Level Playing Field Between Public and Private Business” which was welcomed by Ministers and which identifies key elements for ensuring that government-provided services are adequately compensated for the public service they provide, yet offer equal market opportunity to private competitors. As OECD guidelines for competitive neutrality are still being developed, this is the first opportunity to propose relevant amendments to this Resolution.

See also Congress–Docs 26 and 26.Add 1, as well as proposal 54 ("Development of postal financial services").

[This is a mobile copy of Proposed Amendments to Proposal 55]