BRUSSELS -- The European Commission, rejecting a proposal for a voluntary code of conduct for banks, agreed Wednesday to a set of rules to reduce the cost and speed transfers of money from one country to another.


They agreed to a draft directive which "identifies the chain of payments and makes the originating bank responsible for any double charging or delays," said Commissioner Raniero Vanni d'Archirafi.


He said a commission study -- which found that it cost an average of 25.4 European currency units ($32.30) to transfer 100 Ecus between banks-- revealed a system still in trouble. "The trend between 1993 and 1994 showed the systems have not improved enough," said Vanni d'Archirafi, who is responsible for making the EU's single market work.


The proposed new law, which will cover an estimated 170 million cross-border transactions each year, was needed to cut the costs of small firms operating internationally, he added. He and Consumer Affairs Commissioner Christiane Scrivener will present the proposal to EU consumer affairs ministers and internal market ministers on Oct. 31.


It says banks will have to provide detailed, understandable, written information to a customer seeking to transfer funds, outlaws double charging, and says funds must be credited to the recipient's account within six working days of it being sent, unless the originating bank and the customer agree otherwise.


The Commission's study showed that only half of the 352 bank branches involved gave written information to customers, transfer costs ranged from 13 to 31 Ecus, there were many unauthorized charges, and the average time of transfer was 4.8 working days with more than 15 percent of transfers taking more than six days. It also showed that non-urgent transfers were cheaper and faster than urgent transfers.


"We could not tolerate the situation forever. At some point we had to act," said Scrivener, who last year floated the idea of a voluntary code of practice. "We looked at all the possible solutions and decided we had to have a directive."


The European Banking Federation has already complained at the idea of a directive, saying it prefers a voluntary code, but one commission source said the banks had left them with no choice: "They have brought this on themselves. They were given enough rope to hang themselves and did just that."