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DECISION OF COUNCIL OF HEADS OF GOVERNMENT OF COMMONWEALTH OF INDEPENDENT STATES

of October 30, 2015

About increase in level of financial literacy and development of financial education in the State Parties of the CIS

The Council of Heads of Government of the Commonwealth of Independent States solved:

1. Approve the Report "About increase in level of financial literacy and development of financial education in the State Parties of the CIS" it (is applied).

2. Note positive experiment of the State Parties of the CIS on realization and enhancement of systems of financial education of citizens, creation of the institutional circle in the field of consumer protection of financial services.

3. Recommend to the State Parties of the CIS to use the specified Report in case of development and program implementation of increase in financial literacy and determination of the key directions of policy in the field of financial education.

4. To advisory board on consumer protection of the State Parties of the CIS together with the State Parties of the CIS to continue work on enhancement of the legislation and updating of methodical base for increase in financial literacy of the population taking into account the international practice and experience of the states.

from the Azerbaijan Republic

from the Russian Federation

from the Republic of Armenia

from the Republic of Tajikistan

from the Republic of Belarus

from Turkmenistan

from the Republic of Kazakhstan

from the Republic of Uzbekistan

from the Kyrgyz Republic

from Ukraine

from the Republic of Moldova

 

Advisory board on consumer protection of the State Parties of the CIS

Executive committee of the CIS

The report "About increase in level of financial literacy and development of financial education in the State Parties of the CIS"

Introduction

In recent years special attention was around the world paid to questions of financial literacy and financial education. Fragmentary undertakings of public organizations on support of citizens in management of personal means and receipt of information on the financial services offered in the market gradually reached the level of national projects and initiatives of the international organizations. In many countries need of increase in financial literacy of the population is propagandized, the best practice of strategy implementation and programs in the field of consumer protection of financial services and financial education of the population takes root.

In the international practice financial literacy is determined as capability of physical persons to understand financial risks and to make effective solutions for the purpose of improvement of own financial welfare and ensuring protection of the interests. Financial literacy is closely connected with the level of financial education.

Along with professional standards and ethics of financial institutions, control from regulators of the financial market, availability of financial services and ensuring consumer protection financial education of citizens was acknowledged integral part of the firm and fair financial market. Financial literacy is especially important in the conditions of world financial and economic crises when in connection with activation of unfair members of the financial market risks for consumers of financial services significantly increase.

This Report is prepared within activities of the Advisory board for consumer protection of the State Parties of the CIS (further - the Advisory board) on creation of system of exchange of information about national experience of ensuring consumer's laws of citizens of the State Parties of the CIS, and also about international experience concerning consumer protection of financial services.

The report contains the description of the international experience in area of financial literacy and financial education, including initiatives of the United Nations (UN), Organization for Economic Cooperation and Development (OECD), International Bank for Reconstruction and Development (IBRD). Besides, in the Report the overview of the current situation and the achieved results in the field of increase in level of financial literacy of the population and development of financial education of citizens of the State Parties of the CIS is provided. Final part of the Report contains the conclusions and recommendations aimed at providing unity of approaches in the solution of tasks of development of financial education in the State Parties of the CIS, increase in efficiency of interstate interaction, ensuring mutually advantageous partnership in interests of all citizens of the State Parties of the CIS.

By preparation of the Report are used information provided by advisory board members, data of the official sites of public authorities of the State Parties of the CIS, information from open sources, and also project materials of the Ministry of Finance of the Russian Federation "Assistance to increase in level of financial literacy of the population and to development of financial education in the Russian Federation".

1. International experience in area of financial literacy and financial education

1.1. Guidelines of consumer protection of the UN

In 1985 the United Nations General Assembly approved the Guidelines for protection of consumer interests (further - the Guidelines). They include:

physical safety;

assistance to observance of economic consumer interests and their protection;

regulations of safety and quality of consumer goods and services;

system of distribution of the main consumer goods and services;

the measures allowing to accept claims of consumers;

programs of education and informing;

encouragement of steady consumption.

Determination of the consumer as least economically became the main achievement of the Guidelines and it is information the protected party in the relations with manufacturers, contractors and sellers.

In 2013 the Guidelines underwent to review. United Nations Conference on Trade and Development (UNCTAD) issued the Report on implementation of the Guidelines of the United Nations for protection of consumer interests (1985-2013).

The report takes up first of all questions of harmonization of the Guidelines and the current legislation of member countries of the UN. Within each offered Section the main directions of implementation of the Guidelines reveal.

According to the document the Guidelines are offered to be added with two Sections which discussion took place during the first meeting of the Special commission on consumer protection in July, 2012. New Sections concern electronic trading and financial services.

Concerning electronic trading the inalienable right of the consumer to return purchased goods/termination of the transaction was affirmed. Besides, it was noted that bodies for consumer protection conduct educational programs, sociological surveys, researches and checks in this direction.

Concerning financial services it was noted that the majority of the countries regulate consumer protection of financial services by means of general or special laws about consumer protection. Some countries make changes to already existing consumer laws regarding financial services. The number of the laws which are regulating this area and in detail regulating the rights and obligations of the seller and the buyer grows.

The comments received by results of discussions of new Sections of the Guidelines reflect need of creation of international standards and strengthening of international cooperation.

In 2014 the UNCTAD issued the Report on methods of review of the Guidelines for protection of consumer interests.

Creation of effective system of the consumer protection of financial services at the national, regional and international levels keeping the correct balance between high degree of protection of consumers and maintenance of the competition among producers became the purpose of review of the Guidelines.

All respondents agreed that each state shall have the authority responsible for execution of the Guidelines. Most of experts are unanimous that it is necessary to strengthen consumer associations the necessary level of financing for functioning of mechanisms of indemnification. Concerning alternative mechanisms of the dispute resolution and consideration in court of cases with small sum in dispute some experts emphasized need of providing consumers with proper compensation.

Experts came to conclusion that it is necessary to perform international protection of the rights of consumers and to control it by means of special mechanisms. Most of experts supported creation within UNCTAD of intergovernmental structure on consumer protection as which preparation of status reports of consumer protection, drafts of the laws and reforms in the field of consumer protection, experience exchange with foreign partners and development of general provisions of policy of consumer protection would enter.

In addition to UNCTAD of the offer on amendment and review of the Guidelines were developed by World Organization of consumers. The last suggests to concentrate attention on problems of access, competition and stability of consumer protection, paying due attention to questions of universal servicing (for example, to cross-border money transfers), to ensuring safety of deposits, policy in the field of the competition of financial services taking into account government assistance, and also to simplification of transition of consumers from one financial institution in another.

In addition to the Guidelines there is Body of principles and the rules of the UN concerning social wellbeing in general including protection of interests of the rights of consumers in developed and developing countries of the world.

Within activities for development of availability of the UN determined criteria of availability of financial services:

access to wide range of financial services, since saving tools;

continuity of access to financial services of citizens, and also small and medium business;

the responsible behavior of members of the financial market guaranteeing to clients those financial services which they really need taking into account their opportunities.

1.2. Initiatives of OECD in the field of financial literacy

The special role in consumer protection of financial services and support of initiatives in the field of financial literacy is played by the countries of Group of Twenty and OECD. In February, 2011 within the summit of Group of Twenty the decision on need of development of the international principles of consumer protection of financial services was made.

In October, 2011 the Commission of Committee on the financial markets of OECD with assistance of other international organizations developed the Principles of high level on consumer protection of financial services which were approved on October 18, 2011.

The principles of high level on consumer protection of financial services include:

the legal, regulating and supervising systems;

role of supervisory authorities;

principle of the equal and fair attitude towards the consumer;

principle of openness and transparency;

financial education and education;

responsible business behavior of suppliers of financial services and authorized agents;

protection of consumer assets against fraud and unauthorized use;

protection of confidentiality of data and consumer information;

consideration of claims and indemnification;

competition.

In addition to the Principles of high level the Working group of Group of twenty / OECD on consumer protection of financial services developed effective approaches to realization of the Principles. Effective approaches to realization of three key principles of Group of Twenty on consumer protection of financial services, such as disclosure and transparency of information; the code of responsible behavior of providers of financial services and the authorized agents; work with claims, including the main problems, recommendations and the best practice, were developed in 2013 within presidency of Russia in Group of Twenty and are provided to leaders at the summit in St. Petersburg. The main questions to which it is necessary to pay attention when implementing policy of consumer protection of financial services were formulated. General and innovative approaches of its realization are developed for each question.

In 2008 OECD started creation of the International network of financial education for the purpose of deepening and expansion of knowledge of importance of financial education in the world, bigger exchange of initiatives, practice and the solution of the arising problems in the field. Now members of network are about 240 organizations more than from 100 countries. Russia gave support of activities of the International network by means of created joint with the World Bank and OECD of trust fund. Russia is provided in the International network by the Ministry of Finance of the Russian Federation and actively participates in its activities. Representatives of the Ministry of Finance of the Russian Federation are included into the supreme managing body of network - Council, and also in Technical committee of network and co-chair in one of working groups.

OECD also created the first global information portal in the field of financial education providing possibility of search, studying, comparison and exchange of reliable data, skills and practical examples about financial education between public agents and interested persons. Here standards, the principles and recommendations of the international organizations, methodical materials and publications of rather financial education in the different countries of the world are placed.

Also unrestricted opportunities for international cooperation open. The Recommendations of the principles created in 2005 by OECD and the advanced practice in the field of financial education and knowledge can be example of such interaction.

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