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CAPITAL AND PAYMENTS

It was projected by the Union Treaty that from 1 January 199424 Articles 67-73 of the EC Treaty would be replaced by Articles 73a-h.25 Article 73b(1) abolishes all restrictions upon the movement of capital between member States and between member States and third countries. Similarly, Article 73b(2) abolishes all restrictions upon payments between member States and between member States and third countries. Article 73c allows restrictions upon the movement of capital to third countries which are in place on 31 December 1993 to remain. Article 73c(2) allows the Council, by qualified majority, to adopt measures with respect to capital movements between member States and third countries, but should the measure be a derogation from the current status of freedom of movement, unanimity is required. Article 73d allows member States to apply national tax laws which distinguish between taxpayers on the basis of residence; to take measures to prevent infringement of national laws, especially in the fields of taxation and prudential supervision of financial institutions. Article 73e allows member States, who by Community law have a derogation from the free movement of capital to maintain that derogation until 31 December 1995. Article 73f allows safeguard measures to be taken where movements of capital cause or threaten to cause serious difficulties for the operation of economic or monetary union. Article 73h contains transitional provisions to operate until 1 January 1994.