text: OJ L 189, 3.7.1998, p. 42.

text: Examples of such exceptions are provided for in the explanatory memorandum.

text: Council Regulation (EC) No 974/98 of 3 May 1998

text: on the introduction of the euro (OJ L 139, 11.5.1998, p. 1).

text: See most recently Opinion

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

text: COM(2013) 266 final. See also Opinion

text: , in particular paragraphs 2 and 3.3.

text: Certain limitation on settlements in cash are already applicable for the purpose of combating tax evasion, as provided for in the recent amendment to the Law on tax administration, on which the ECB was consulted (see Opinion

text: As stated in the explanatory memorandum.

sprak: en

title: Opinion of the European Central Bank of 17 January 2014 on limitations on cash payments (CON/2014/4)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 17 January 2014 on limitations on cash payments (

text: ) Introduction and legal basis

text: On 11 December 2013, the European Central Bank (ECB) received a request from the Lithuanian Ministry of Finance for an opinion on a draft law amending the Civil Code of Lithuania (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the second indent of

text: Article 2(1) of Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to means of payment. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: 1.1 The draft law aims to combat tax evasion and the shadow economy by means of providing that transactions between any persons can only be settled or paid in cash if their amount is not higher than LTL 10 000 (around EUR 2 900) or the foreign currency equivalent. The draft law also allows other laws to establish lower limits for such settlements and other payments, and cases where only non-cash settlement is possible. 1.2 The draft law also expands the list of intermediaries through which non-cash settlements or other payments can be made. In addition to banks, such settlements can be effected through any other payment service providers. 1.3 The proposed limitations are subject to several exceptions. First, the limitations apply to settlements and other payments to be made on the basis of transactions, while any other payments are not affected, e.g. dividends and bonuses paid by companies, other payments to shareholders, compensation for damages . Second, the amount of cash is not limited if a person is settling or paying for a transaction by paying or withdrawing cash through a payment service provider; in this case the persons need to prove their identity. Third, the limitations are not applicable if immediate

text: non-cash settlement is not possible due to (a) the fact that no payment service provider operates at a location where a settlement or payment is taking place (e.g. in remote rural locations), or (b) other ‘objective reasons’, e.g. a transaction is made on a day when payment service providers and/or payment and settlement systems are not operating. Such cases should be reported to the competent national authority.

text: 2. General observations

text: 2.1 Although Union law only regulates restrictions on cash payments in euro, the ECB considers it appropriate to assess the draft law’s provisions against the relevant Eurosystem practices. 2.2 The draft law is in compliance with Union law, and in particular with

text: recital 19

text: of

text: Council Regulation (EC) No 974/98

text: , which states that ‘limitations on payments in notes and coins, established by Member States for public reasons, are not incompatible with the status of legal tender of euro banknotes and coins, provided that other lawful means for the settlement of monetary debts are available’ . The ECB acknowledges that: (a) other lawful means for the settlement of monetary debts, ensuring similar benefits to those of cash, are indeed available in Lithuania; and (b) the draft law’s objectives of combating tax evasion and the shadow economy qualify as public reasons outweighing the impact of the limitations on cash payments. 2.3 In any case, limitations on cash payments should be proportionate to the objectives pursued and should not go beyond what is necessary to achieve such objectives, especially in view of the fact that the draft law’s measures may also affect relatively low value payments. Any negative impact of the proposed limitations should be carefully weighed against the public benefits expected to be derived from them.

text: 3. Specific observations

text: 3.1 The draft law provides that non-cash settlements are to be made through the payment service providers with which the relevant accounts are opened, if other laws do not provide otherwise. However, as stated in the explanatory memorandum, 6.5 % of the Lithuanian population currently does not have a payment account. The ECB recommends that payment accounts, as other lawful means for the settlement of monetary debts other than cash, should be more easily accessible to the whole population. In this regard, the ECB notes the recent Union legislative initiatives in this field, in particular the proposal for a directive on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features .

text: 3.2 The ECB understands that the draft law is one of the first national legislative steps concerning 6 7 general limitations on cash payments in combating tax evasion and the shadow economy . Therefore, the proposed limitations are subject to several exceptions, as described in paragraph 1.3 above. The ECB invites the consulting authority to consider whether the proposed limitations can achieve the objectives pursued in view of the number and open-ended nature of the exceptions. In one case, no limitations apply due to the fact that no payment service provider operates at a location where a settlement or payment is taking place or due to other ‘objective reasons’; such cases have to be reported to the competent national authority. However, the draft law is not clear as to what information (e.g. the transaction, the payment in cash or the objective reasons) should be reported to the competent national authority, or by whom it should be reported. The ECB understands that these matters will be specified in other legislation.

text: This opinion will be published on the ECB’s website.

text: Done at Frankfurt am Main, 17 January 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: OJ L 189, 3.7.1998, p. 42.

text: See Article 4 of the draft law.

text: See Article 6 of the draft law.

text: See Article 7 of the draft law.

text: All ECB opinions are available on the ECB website at www.ecb.europa.eu.

text: The ECB has also considered other similar draft laws in Opinions

text: and

publisher: Europeiska centralbanken

title: Opinion of the European Central Bank of 20 January 2014 on public access to information on officials’ wealth (CON/2014/5)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 20 January 2014 on public access to information on officials’ wealth (

text: ) Introduction and legal basis

type: rubrik

text: On 20 December 2013, the European Central Bank (ECB) received a request from the President of the Slovenian Parliament for an opinion on a draft law on public access to information on officials’ wealth (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to Banka Slovenije. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

type: stycke

text: 1. Purpose of the draft law

text: 1.1 The purpose of the draft law, as stated in its explanatory memorandum, is to ensure transparency in the conduct of public officials and take precautionary measures in the field of corruption. The draft law regulates the duty of officials to declare information on their wealth and public access to such information. The main features of the draft law are presented below. 1.2 Under the draft law, all officials, including the President of the Republic, Prime Minister, members of Parliament, ministers and judges, as well as the Governor of Banka Slovenije and Banka Slovenije officials are obliged to provide annually the Slovenian Court of Audit with information on their personal wealth, e.g. income, real estate, securities and cash holdings . In addition, they have to explain any increase in their wealth since their previous declaration that exceeds the net salary payments they received for fulfilling their duties as officials in this period . To the extent it refers to income and wealth acquired by officials during their term of public office or performance of relevant activities, such information will be made publicly available on the Court of Audit’s website notwithstanding any legal restrictions as regards personal data protection and tax secrets .

text: 1.3 The draft law envisages several types of sanctions that can be imposed on officials in the event of non-compliance with their obligations. If officials fail to provide information on their wealth and income, a fine under Article 13 of the draft law is imposed on them. In accordance with Article 8 of the draft law, the Court of Audit is to order that such official’s salary is gradually reduced every month by one tenth, to the level of the minimum salary, until the official provides the requested information. This order will be executed by the respective official’s employer. In addition to any fine imposed in accordance with Article 13(1) of the draft law, a fine under Article 13(4) of the draft law will be imposed on an official in the amount of the value of undeclared wealth or of the wealth from unexplained sources, as the case may be.

text: 2. General observations

text: 2.1 The ECB welcomes this consultation by the Slovenian Parliament. The term ‘officials’, which is defined in Article 2 of the draft law, explicitly includes the Governor of Banka Slovenije and Banka Slovenije officials. For this reason, the draft law should be assessed in terms of compatibility with the principle of personal independence of the Governor and of other members of Banka Slovenije’s Governing Board. 2.2 Most of the draft law’s provisions are identical to the draft legislative provisions on which the ECB adopted Opinion

text: while the differences are not significant in terms of compatibility with the principle of personal independence. Therefore, the observations expressed in paragraph 3.3 of Opinion

text: also apply with respect to this draft law . They refer to the ECB’s interpretation on the basis of which the draft law provisions on wealth declarations and related sanctions would not be incompatible with the principle of personal independence.

text: Done at Frankfurt am Main, 5 January 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI

type: vagledning

utgivare: ecb


text: OJ L 189, 3.7.1998, p. 42.

text: See new

text: Article 9

text: bis, third paragraph, (2) to be introduced by the draft law in the law of 6 April 2010 on market practices and consumer protection: “The total amount to be paid may be symmetrically rounded to the nearest multiple of five cents, for all means of payment accepted by traders in accordance with the law”.

text: Council Regulation (EC) No 974/98 of 3 May 1998

text: on the introduction of the euro (OJ L 139, 11.5.1998, p. 1).

text: OJ L 83, 30/3/2010, p. 70. See in particular the ninth recommendation.

text: See the preparatory work of the draft law, commentary of

text: article 5

text: : «It is important to note that the one and two euro cent coins remain legal means of payments and shall not be suppressed ».

text: See new

text: article 9

text: bis, (2), second indent, to be introduced by the draft law in the law of 6 April 2010 on market practices and consumer protection.

text: Conséquences de l’introduction en Belgique d’un principe d’arrondi symétrique à cents près pour les montants totaux payés en magasin », available on the NBB’s website at www.nbb.be.

title: Opinion of the European Central Bank of 23 January 2014 concerning the rounding of payments denominated in euro (CON/2014/6)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 23 January 2014 concerning the rounding of payments denominated in euro (

text: ) Introduction and legal basis

text: On 27 December 2013, the European Central Bank (ECB) received a request from the Nationale Bank van België/Banque Nationale de Belgique (NBB), acting on behalf of the Belgian Minister for Finance, for an opinion on a draft law concerning the rounding of payments denominated in euro (hereinafter the ‘draft law’). The ECB was requested to deliver an opinion within two weeks in order to enable the Belgian government to take the ECB opinion into consideration before the draft law is put before the Belgian Parliament. The ECB’s competence to deliver an opinion is based on Article 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the first and second indents of

text: Article 2(1) of Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , since the draft law relates to currency matters and means of payment. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: 1.1 The draft law amends the Law of 6 April 2010 on market practices and consumer protection, and amends the rules on the rounding of prices in Belgium. It authorises retailers to round the total price to be paid by consumers to the nearest five euro cents, regardless of whether the relevant payment is made with banknotes, coins, electronic money or comparable means of payment such as, for example, meal vouchers. However, rounding should not take place if the amount to be paid for the purchase of an individual item is one, two, three or four euro cents. In accordance with

text: Article 9

text: a, rounding will only apply on total amounts due, not on each individual item. If retailers decide to engage in the rounding of amounts to be paid, they must do so in a consistent manner. They must also inform consumers about the rounding by openly and clearly displaying on their

text: premises a sign containing text stipulated in the draft law . Such text may not be changed by the retailers for any reason, e.g. in order to refuse one and two euro cent coins as a means of payment. Symmetrical rounding up or down of the amount payable to the nearest multiple of five cents must also be included in the invoice, receipt or any other proof of payment. 1.2 As explained during the preparatory work on the draft law, the draft law’s aim is to limit the use of one and two euro cent coins in transactions between retailers and consumers due to the disproportionate costs involved in handling such coins for authorities, banks and retailers in minting, supplying and handling, respectively, one and two euro cent coins. These coins are often lost or not reintroduced into circulation by consumers, which creates an ongoing need to mint and replace them in large quantities. Furthermore, rounding total amounts to be paid, as proposed by the draft law, would not lead to an overall increase in prices since such rounding would, depending on the situation, apply downwards or upwards. Finally, the rounding of prices would also satisfy a large number of Belgian consumers, who consider the one and two euro cent coins, similarly to the former 25 and 50 cent Belgian coins, as coins of negligible value, which results in either the coins not being put back into circulation or undue delay in retail transactions.

text: 2. General observations

text: 2.1 In accordance with Article 128(2) of the Treaty, the competence to adopt measures to harmonise the denomination and technical specifications of all coins intended for circulation to the extent necessary to permit their smooth circulation within the Union is vested in the Council. The legal tender status of euro cent coins within the euro area is laid down in

text: Article 11 of Council Regulation (EC) No 974/98

text: . In addition,

text: Article 2 of Council Regulation (EC) No 974/98

text: provides that the euro, as the currency of the euro area, is divided into one hundred cent. The denomination structure of the euro coins (i.e. 1, 2, 5, 10, 50 cents, 1 euro and 2 euro coins) has remained unchanged since the introduction of the euro, the one and two euro cent coins allowing consumers to pay the exact amount payable to the last cent. 2.2 Rounding rules are in place in two Member States. In Finland, the Rounding Act No 890/2000 of 27 October 2000 was enacted by the Finnish Parliament prior to the introduction of the euro in order to ensure the continuation of a longstanding tradition of rounding small cash payments in Finnish markka to the nearest 10 penni. In the Netherlands, the Social Forum on the Payment System (a body established by the Ministry of Finance which brings together retail organisations, the consumers’ association, commercial banks and the NCB) recommended the nationwide introduction of the rounding rule from 1 September 2004. Retailers applying the rounding rule

text: inform their customers by displaying a special sticker at the entrance of their shops. Nevertheless, it is still possible for customers to pay the exact amount payable, using one and two euro cent coins. 2.3 The competent authorities have, however, repeatedly expressed their concern as regards such rounding rules, which undermine the legal tender status of one and two euro cent coins. As stated in Opinion

text: , issued further to the proposed amendment of the Finnish Rounding Act, ‘the Rounding Act should in any case not prevent the one and two cent coins from being used as a means of payment as they are de jure legal tender in the entire euro area. Member States’ legislation should not lead to divergent treatment of the euro’. In its ‘Report on the definition, scope and effects of legal tender of euro banknotes and coins’, the Euro Legal Tender Expert Group (ELTEG) advised that ‘rounding rules seem to be contradictory to the notion of legal tender of coins [as] tendering the exact amount due does not extinguish the debt (except in the Netherlands), while the very notion of legal tender implies the possibility to settle the exact amount owed’. In its Recommendation of 22 March 2010 on the scope and effects of legal tender of euro banknotes and coins , the Commission recommended that ‘Member States should […] refrain from adopting new rounding rules since they affect negatively the power to discharge from a payment obligation by tendering the exact amount owed and since it may lead in some circumstances to a surcharge on cash payments’. 2.4 With a view to preserving the unity and integrity of the single monetary area, the ECB therefore recommends that any rounding rules are established in a harmonised manner at Union, rather than national, level. 2.5 The ECB, nevertheless, welcomes that, as emphasised in the preparatory work for the draft law and the consultation letter, the draft law does not alter the legal tender status of one and two euro cent coins in Belgium. It must therefore be ensured that these coins continue to be fully accepted in Belgium for: (a) all payments amounting to one, two, three or four euro cent and payments of individual items, which are not subject to the rounding rules ; (b) payments that retailers decide not to round; and (c) payments rounded up or down by retailers in accordance with the draft law when the customers want to pay the rounded up price with one and two euro cent coins. 2.6 In any event, the mere introduction in Belgium of a principle that allows rounding up or down, as appropriate, to the nearest five cents for total amounts payable in shops should not lead to the discontinuance of one and two euro cent coins by Belgian authorities, as appears to have been considered in a recent report . On the contrary, Belgian authorities need to ensure that one and

text: two euro cent coins are widely available in Belgium in accordance with market needs in order to safeguard retailers’ freedom to choose whether or not to apply the rounding rules and to comply with the draft law, which expressly excludes rounding for total prices of one, two, three or four euro cents and implicitly excludes rounding for the purchase of individual items. 2.7 The ECB, nevertheless, understands that, should the practice of rounding up or down become widespread, it is expected that retailers will need fewer one and two euro cent coins as change. This, in turn, goes some way towards addressing the issue of the high cost of replacing one and two euro cent coins that are no longer in circulation due to loss and hoarding.

text: Done at Frankfurt am Main, 23 January 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: OJ L 189, 3.7.1998, p. 42.

text: See the ECB’s Convergence Report 2013, p. 27 and the reference to ECB opinions made there. 3 See section 6D of the Central Bank of Ireland Act 1942, as inserted by section 7 of the Central Bank and Financial Services Authority of Ireland Act 2003 and as amended.

text: See paragraph 2.6 of Opinion

text: and the ECB’s Convergence Report 2013, p. 27. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

title: Opinion of the European Central Bank of 28 January 2014 on remuneration for public servants during periods of sick leave (CON/2014/7)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 28 January 2014 on remuneration for public servants during periods of sick leave (

text: ) Introduction and legal basis

text: On 6 January 2014, the European Central Bank (ECB) received a request from the Irish Minister for Public Expenditure and Reform (hereinafter ‘the Minister’) for an opinion on the Public Service (Recruitment and Appointments) (Amendment) Bill 2013 (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to the Central Bank of Ireland (CBI). In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: 1.1 The draft law amends the Public Service Management (Recruitment and Appointments) Act 2004 (hereinafter the ‘2004 Act’). The new Part 7A of the 2004 Act introduces new rules for the remuneration of public servants during periods of sick leave. It empowers the Minister to make regulations providing for the payment of such remuneration to public servants, and it contains provisions that will be applied by ministerial regulation to certain ‘public service bodies’ as defined in the draft law. The CBI is not excluded from the definition of ‘public service bodies’ contained in the draft law. 1.2 The new Part 6A of the 2004 Act concerning the redeployment of public servants is also inserted by the draft law. The CBI’s staff are explicitly excluded from its provisions.

text: 2. Appropriate time to consult the ECB

text: 2.1 The ECB received the consultation request on 6 January 2014. The ECB notes that the draft law has already progressed through the legislative procedure in the Irish Parliament and no further amendments are possible prior to enactment.

text: 2.2 The ECB reminds the Minister that national authorities are obliged to consult the ECB on draft legislative provisions within its field of competence.

text: Article 4 of Decision 98/415/EC

text: provides that the ECB must be consulted ‘at an appropriate stage’ in the legislative process. It follows from this that the consultation should take place at a point in the legislative process that affords the ECB sufficient time to examine the draft legislative provisions and adopt its opinion. Pursuant to the wording of

text: Article 3(4) of Decision 98/415/EC

text: , Member States are obliged to suspend the process for adoption of the draft legislative provisions pending receipt of the ECB’s opinion in order to allow the relevant national authorities to meaningfully deliberate the ECB’s opinion prior to adoption of the provisions in question. The ECB would appreciate it if the Minister would comply in future with the obligation to consult the ECB in due time so as to allow sufficient time for its views to be taken into account in accordance with Decision

text: 3. General observations

text: As noted in paragraph 1.2 above, the CBI’s staff are explicitly excluded from the new provisions concerning the redeployment of public servants, but not from the scope of the new Part 7A of the 2004 Act, on remuneration during periods of sick leave. As the new Part 7A could therefore apply to and directly affect the CBI’s decision-making bodies and its employees, it should be examined from the perspective of central bank independence, in particular institutional and financial independence, as well as that of the personal independence of the members of the CBI’s decision-making bodies.

text: 4. Central bank independence

text: 4.1 Member States may not interfere with a national central bank’s (NCB) ability to employ and retain the qualified staff necessary for the NCB to perform independently the tasks conferred on it by the Treaty and the Statute of the European System of Central Banks and of the European Central Bank. To protect the NCB’s autonomy in staff matters, the ECB has consistently recommended in previous opinions and in its convergence reports that any amendment to legislation on remuneration for members of an NCB’s decision-making bodies and its employees should be decided in close and effective cooperation with the NCB concerned, taking due account of its views, to ensure the ongoing ability of that NCB to independently carry out its tasks . 4.2 Given that the CBI’s employees are employed under the conditions (including conditions as to remuneration and allowances) set by the Central Bank Commission , in order to protect the CBI’s autonomy in staff matters, legislative provisions affecting the remuneration of members of the CBI’s decision-making bodies and its employees should be decided in close and effective cooperation with the CBI, taking due account of its views, to ensure the ongoing ability of the CBI to independently carry out its tasks. Since the new Part 7A of the 2004 Act concerns remuneration

text: of public servants during periods of sick leave, it constitutes such a legislative provision that would affect the remuneration of members of the CBI’s decision-making bodies and its employees . The ECB welcomes the fact that the Minister in the consultation letter to the ECB undertakes to consult with the Governor of the CBI and expects that the Minister will take due account of the Governor’s views in this matter.

text: This opinion will be published on the ECB’s website.

text: Done at Frankfurt am Main, 28 January 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: Law CXXXIX of 2013 on the Magyar Nemzeti Bank. 2 OJ L 189, 3.7.1998, p. 42.

text: See, for example, Opinions

text: , CON2008/83,

text: and

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 4 See Chapter 6.6 of the ECB’s Convergence Report 2010, and Chapter 6.5 of the ECB’s Convergence Report 2012.

text: See Article 12(4) of the Law on the Magyar Nemzeti Bank , which has changed in the draft law without taking into account the ECB’s Convergence Report 2012. 6 See pages 243 to 248 of the ECB’s Convergence report 2012. 7 See paragraphs 3.2 and 3.3 and paragraph 4 of Opinion

text: . 8 See paragraph 3.1.2 of Opinion

text: . 9 See paragraph 3.1.5 of Opinion

text: . 10 See paragraph 3.3.

text: See the insertion of a new paragraph (1a) to Article 157 of the Law on MNB allowing for the suspension of the right of the members of the Monetary Council of the MNB to exercise their duties.

title: Opinion of the European Central Bank of 31 January 2014 on the Magyar Nemzeti Bank (CON/2014/8)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 31 January 2014 on the Magyar Nemzeti Bank (

text: ) Introduction and legal basis

text: On 3 January 2014, the European Central Bank (ECB) received a request from the Hungarian Ministry of National Economy (hereinafter the ‘consulting authority’) for an opinion on a draft law amending the Law on the Magyar Nemzeti Bank (hereinafter the ‘draft law on the Magyar Nemzeti Bank’), and a draft law on fiduciary asset managers and the rules governing their activities (hereinafter the ‘draft law on fiduciary asset management’). On 9 January 2014, the ECB received an additional request for consultation from the consulting authority on a draft law amending several legal acts, including the Law on the Magyar Nemzeti Bank, as regards the rules applicable for the declaration of wealth by certain officials of the Magyar Nemzeti Bank (MNB) (hereinafter the ‘draft law on declaration of wealth’). As this consultation request also concerns an amendment of the Law on the Magyar Nemzeti Bank, the ECB has decided to merge the two consultation requests and adopt one opinion concerning all of the draft provisions sent for consultation. The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

text: Article 2(1) of Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft laws concern rules applicable to the central bank. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft laws

text: 1.1 Pursuant to the Law on the Magyar Nemzeti Bank, the Hungarian Financial Supervisory Authority (HFSA) was dissolved and its functions and responsibilities were transferred to the MNB on 1 October 2013. From this date, the MNB became the entity not only responsible for macroprudential policy, but also for micro-prudential supervision of the entire financial market. As a result, the MNB has been exclusively authorised to take administrative decisions pertaining to the prudential supervision of the financial markets since that date. According to the explanatory

text: memorandum attached to the draft law amending the Law on the Magyar Nemzeti Bank, an amendment of the recently adopted Law on the Magyar Nemzeti Bank has become necessary with respect to: (a) improving the Law on the Magyar Nemzeti Bank based on practical experience recently gained from applying its provisions in connection with the MNB’s financial supervisory tasks; (b) providing greater flexibility in the Financial Stability Council’s (FSC) decision-making procedure; and (c) ensuring more efficient enforcement of the payment of the MNB’s supervisory revenues. To this end, the draft law amending the Law on the Magyar Nemzeti Bank provides that the adoption of certain decisions under FSC administrative procedures may be delegated to competent MNB managers. It also provides for (a) the National Tax and Customs Administration of Hungary to collect unpaid supervisory fees and fines imposed by the MNB for and on behalf of the MNB; (b) the MNB’s Governor or the person designated by him to become a member of the Board of the Public Procurement Authority; (c) the MNB to become the sole owner of the Credit Institution Liquidator Non-profit LLC; (d) the amendment of the provisions applicable to legal remedies against the MNB’s administrative decisions; and (e) the possibility for the MNB to provide payment services for its employees, limited to cash payments, from their accounts managed by the MNB. 1.2 The draft law on fiduciary asset management regulates the legal status and activities of fiduciary asset managers. According to an amending proposal that is to be submitted to this draft law during the Hungarian parliamentary procedure, the MNB, as the Hungarian financial supervisory authority, is to be given authority to grant licences to entities carrying out such activities as well as to keep records with regard to such entities. 1.3 The draft law on the declaration of wealth defines sanctions against the MNB’s Governor, the Deputy Governors, the other Members of the Monetary Council and the members of the Supervisory Board if: (a) they refuse or fail to submit their declaration of wealth by the given deadline; or (b) they intentionally include substantively false data in their declaration.

text: 2. Specific Observations

text: 2.1 The Law on the Magyar Nemzeti Bank has been subject to frequent changes over recent years, which also resulted in it having been recast twice since 2010. The currently applicable Law on the Magyar Nemzeti Bank only took effect on 1 October 2013, and it is already subject to change. The frequency of amendments to the Law on the Magyar Nemzeti Bank, which the ECB has criticised 3 4 in its previous opinions and in its Convergence Reports , creates instability in the MNB’s operations. A legal framework that provides a stable basis for a central bank to function is essential for central bank independence.

text: 2.2 The draft amendments summarised in section 1 do not warrant further observations from the ECB. At the same time, the ECB notes that there are still outstanding issues concerning the Law on the Magyar Nemzeti Bank, which should have been addressed in one of the numerous amendments described above. Therefore, the Hungarian legislator should take the opportunity that the current legislative process offers to address the issues that the ECB has already raised in relation to the Law on the Magyar Nemzeti Bank in its opinions and in the Convergence Reports referred to in paragraph 2.1, including the following issues: (a) Additional safeguards should be introduced into the Law on the Magyar Nemzeti Bank in relation to the monetary financing prohibition ; the ECB, in its Convergence Report, also pointed out other provisions of the Law on the Magyar Nemzeti Bank that are incompatible with the provisions of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’). (b) There should be a provision covering: (i) additional checks and balances in the procedure for appointing Monetary Council members, and the rules providing for the smooth and continuous functioning of the Monetary Council in case of termination of office of the Governor; and (ii) changing the text of the oath taken by the MNB’s Governor and its Deputy Governors . (c) There should be provisions: (i) as regards the prohibition of monetary financing in relation to the MNB’s general succession to the HFSA’s obligations and pending legal proceedings ; and (ii) the MNB defining the financial contribution of supervised entities . 2.3 Article 157 of the Law on the Magyar Nemzeti Bank defines the rules with regard to the submission of declaration of wealth by MNB officials. The draft law on declaration of wealth, which further amends the Law on the Magyar Nemzeti Bank, provides that: (a) as long as the MNB’s Governor, Deputy Governors, members of the Monetary Council and members of the Supervisory Board do not comply with their obligation to submit a declaration of wealth, they will be prohibited from carrying out their duties and, as a consequence, they will not be entitled to receive their remuneration; and (b) a conflict of interest as defined in Article 152-156 of the Law on the Magyar Nemzeti Bank has to be formally established on their behalf, should they fail to fully comply with the obligations for submitting a declaration of wealth or if they submit substantively false data or facts. 2.4 Article 3 of the draft law on declaration of wealth inserts a new paragraph 1a in Article 157 of the Law on the Magyar Nemzeti Bank. The ECB has noted in its Opinion

text: that

text: sanctions related to non-compliance with the obligation of submitting wealth declarations are not generally prohibited, provided that certain safeguards apply. The sanction provided for in

text: Article 3

text: in effect allows the MNB’s Governor, Deputy Governors and the members of the Monetary Council to be temporarily removed from office for grounds other than those pursuant to Article 14.2 of the Statute of the ESCB. The ECB would like to underline that Governors and other members of a decision-making body of a national central bank (NCB) who are involved in the performance of ESCB-related tasks may not be dismissed for reasons other than those laid down in Article 14.2 of the Statute of the ESCB. 2.5 As regards the establishment of a possible conflict of interest, the insertion of a new paragraph 3 in Article 157 of the Law on the Magyar Nemzeti Bank is understood by the ECB to be used to oblige the Governor, the Deputy Governors, the members of the Monetary Council and the members of the Supervisory Board of the MNB to submit an accurate declaration of wealth. As regards this new paragraph 3, the ECB notes that the declaration of the conflict of interest should: (a) clarify whether this establishment involves only a presumption that a conflict of interest arises; (b) define the extent of the conflict of interest in such cases; and (c) provide for a legal remedy against such a decision. Nevertheless, the ECB notes that in order to dismiss the Governor and other members of any NCB’s decision-making bodies who are involved in the performance of ESCB-related tasks, one of the two grounds for dismissal specified by Article 14.2 of the Statute of the ESCB have to apply.

text: Done at Frankfurt am Main, 31 January 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI