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

text: OJ L 162, 19.6.1997, p. 1. Regulation as last amended by

text: Council Regulation (EC) No 2595/2000 of 27 November 2000

text: (OJ L 300, 29.11.2000, p. 1). 3 OJ L 139, 11.5.1998, p. 1. Regulation as last amended by

text: Council Regulation (EC) No 2596/2000 of 27 November 2000

text: (OJ L 300, 29.11.2000, p. 2). 4 OJ L 359, 31.12.1998, p. 1. Regulation as last amended by

text: Council Regulation (EC) No 1478/2000 of 19 June 2000

text: (OJ L 167, 7.7.2000, p. 1).

text: Published in October 2004 pursuant to Article 122(2) of the Treaty. 6 See the English language version of

text: Regulation (EC) No 974/98

text: and all the other official language versions, with the exception of the Greek language version. 7 Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded (OJ L 236, 23.9.2003, p. 33).

text: As stated by the Court of Justice of the European Communities in

text: Case 34/73

text: Fratelli Variola S.p.A. v Amministrazione italiana delle Finanze [1973] ECR 981, ‘[b]y virtue of the obligations arising from the Treaty and assumed on ratification, Member States are under a duty not to obstruct the direct applicability inherent in regulations and other rules of Community law. Strict compliance with this obligation is an indispensable condition of simultaneous and uniform application of Community regulations throughout the Community’. This position was also reiterated in

text: Case 50/76

text: Amsterdam Bulb BV v Produkschap voor Siergewassen [1977] ECR 137. 9

text: Case 50/76

text: above. 10

text: Case 39/70

text: Norddeutsches Vieh- und Fleischkontor GmbH v Hauptzollamt Hamburg-St. Annen [1971] ECR 49. 11

text: Case C-403/98

text: Azienda Agricola Monte Arcosu v Regione Autonoma della Sardegna [2001] ECR I-103. 12 [1985] ECR 1057.

text: Case C-19/03

text: Verbraucher-Zentrale Hamburg eV v O2 (Germany) GmbH & Co. OHG [2004] 0000. 14 OJ L 130, 1.5.1998, p. 22.

text: Valstybės žinios (Lithuanian Official Bulletin), 1998, No. 112-3121, as amended by Resolution No 68 of Lietuvos bankas’ Board of 28 April 2005 (Valstybės žinions, 2005, No. 59-2089). 16 OJ L 200, 8.8.2000, p. 35.

text: Valstybės žinios, 2000, No 64-1914.

text: OJ L 130, 1.5.1998, p. 26. 19 OJ L 78, 25.3.2003, p. 16.

text: Valstybės žinios, 1993, No 25-587. 21 Valstybės žinios, 1993, No 34-790. 22 Valstybės žinios, 1993, No 28-640. 23 Valstybės žinios, 2002, No 91-3891.

text: Resolution No 112 of Lietuvos bankas’ Board of 28 June 2001 on the establishment of the base currency and the official litas exchange rate (Valstybės žinios, 2001, No 57-2073); Decision of the Government of 25 June 2001 (protocol No. 30- 18); Resolution No 113 of Lietuvos bankas’ Board of 28 June 2001 on the establishment of the official Lithuanian litas exchange rate (Valstybės žinios, 2001, No 57-2074); Resolution No 15 of Lietuvos bankas’ Board of 1 February 2002 on the base currency and the official litas exchange rate (Valstybės žinios, 2002, No 12-453); Resolution No 157 of the Government of 1 February 2002 on the endorsement of the proposal of Lietuvos bankas concerning the base currency and the official litas exchange rate and the repeal of resolutions of the Government (Valstybės žinios, 2002, No 12-417). 25 Opinion of the ECB of 4 November 2004 at the request of the Belgian Ministry of Finance on a draft law introducing a tax on exchange operations involving foreign exchange, banknotes and currency (

text: Valstybės žinios, 1997, No 64-1502.

title: Opinion of the European Central Bank of 14 June 2005 at the request of Lietuvos bankas on a draft law on the adoption of the euro (CON/2005/21)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 14 June 2005 at the request of Lietuvos bankas on a draft law on the adoption of the euro (

text: ) Introduction

text: 1. On 9 May 2005, the European Central Bank (ECB) received a request from Lietuvos bankas for an opinion on Lietuvos Respublikos euro įvedimo Lietuvos Respublikoje įstatymo projektas (draft law on the adoption of the euro in the Republic of Lithuania (hereinafter the ‘draft law’)).

text: 2. The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the first three 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 , as the draft law relates to currency matters, means of payment and to the tasks of Lietuvos bankas, insofar as the draft law imposes certain duties on Lietuvos bankas. 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: Structure and scope of the draft law

text: 3. The draft law covers a wide range of topics with a view to ensuring a smooth introduction of the euro in Lithuania. It either replaces or amends the existing currency law and regulates issues relating to the introduction of the euro in Lithuania.

text: 4. In particular, the draft law provides as follows: (i) for the introduction of the euro as the monetary unit of Lithuania and that euro banknotes and coins will become legal tender in Lithuania, (ii) for the publication of images of euro banknotes and coins and euro cent coins, (iii) for the exchange of Lithuanian litas into euro, (iv) for the conversion of balances in litas on clients’ accounts into euro, (v) that all references to the litas in Lithuanian legal acts, contracts and other documents will be replaced by references to the euro, (vi) that all references to national interbank reference rates will be replaced by references to EONIA and EURIBOR, (vii) for the renominalisation of securities, (viii) for the dual display of prices, (ix) for the exchange of mutilated litas and euro and of litas withdrawn from circulation, (x) for the withdrawal of litas from circulation and the continuing status of litas as legal tender for 15 calendar days after the date of introduction of the euro, (xi) that breaches of the draft law will be sanctioned in accordance with Lithuanian law and, (xii) the temporary operation of certain laws concerning the litas. Moreover the draft law: (i) refers to the irrevocably fixed exchange rate between the litas and the euro and sets out some supplementary rounding rules, (ii) instructs the Lithuanian Government to prepare laws necessary for the implementation of the draft law, (iii) mandates the Lithuanian Government to adopt legal acts in the fields of employment and social security law with a view to expressing relevant amounts in euro rather than in litas, (iv) suggests that the Lithuanian Government, Lietuvos bankas, the Lithuanian Securities Commission, Insurance Supervisory Commission and other institutions prepare legal acts, recommendations and explanations relating to the introduction of the euro, and (v) repeals the Act on the credibility of the litas. An annex to the draft law lists the Community legal acts which are to be implemented by adopting the draft law. The ECB understands that the inclusion of such an annex is consistent with legislative practice in Lithuania. The draft law does not provide for the date of its entry into force. Instead, the reference to the date in Article 16(1) of the draft law is left blank, on the understanding that it will be completed later.

text: 5. Article 2 of the draft law defines the following three concepts: (i) the date of introduction of the euro; (ii) the irrevocably fixed conversion rate between the euro and litas; and (iii) the exchange of litas into euro. First, the date of introduction of the euro is defined as a date laid down in a decision of the Council to abrogate the derogation concerning Lithuania by following the procedure laid down in Article 122(2) of the Treaty. Second, the irrevocably fixed conversion rate between the euro and the litas is defined as the exchange rate between the euro and the litas, which will be laid down by a decision of the Council following the procedure laid down in Article 123(5) of the Treaty. Third, the exchange of litas into euro is explained as the exchange of litas banknotes and coins and litas cent coins for euro banknotes and coins and euro cent coins as well as the crediting of a client’s account by applying the irrevocably fixed conversion rate.

text: Timing for the adoption of the draft law and preconditions for its adoption

text: 6. The ECB notes that current Community secondary legislation on monetary matters (in particular

text: Council Regulation (EC) No 1103/97 of 17 June 1997

text: on certain provisions relating to the introduction of the euro ,

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

text: on the introduction of the euro and

text: Council Regulation (EC) No 2866/98 of 31 December 1998

text: on the conversion rates between the euro and the currencies of the Member States adopting the euro ), although forming part of the acquis communautaire of both participating and non-participating Member States, only provides for the euro changeover in the original 11 participating Member States (and later in relation to Greece, which adopted the euro on 1 January 2001). This legislation does not, however, address the euro changeover in Member States joining the euro area at a later stage. Considering the above, the ECB provides its comments on the draft law with reference to Community secondary legislation currently in force and this opinion is issued without prejudice to any future Community legislation relating to the euro changeover in any of the current Member States with a derogation.

text: 7. The ECB understands that Lietuvos bankas expects the draft law to be adopted in the second half of 2005, and that implementing regulations will be adopted by 1 July 2006. However, although the date of entry into force of the draft law is left blank in the draft law, it is intended that the draft law and related implementing regulations should enter into force only upon abrogation of the derogation in respect of Lithuania. The ECB understands the purpose of adopting national legislation supplementing Community legislation on monetary matters at an early stage. However, it should be remembered that the exclusive competence on monetary matters regarding the euro lies with the Community. National legislation on monetary matters may only complement Community law when Community law provides for it, as was the case with

text: Regulation (EC) No 974/98

text: . Therefore, as a preliminary remark, the ECB considers that, inasfar as the draft law relates to monetary matters which fall within the Community’s exclusive competence, it would be legally undesirable as well as impractical to adopt the draft law before the Council itself takes a decision to allow for national legislation in Lithuania regarding the introduction of the euro or at least before any agreed draft of the relevant Community legal act is published in the Official Journal of the European Union. Early adoption of the draft law implies a risk of inconsistency with forthcoming Community legislation and might require further adaptation of national law once Community legislation is adopted. Thus, the desired objective of providing for more legal certainty would not be achieved but rather compromised.

text: 8. Article 13 of the draft law proposes a dual circulation period of 15 calendar days with respect to banknotes and coins denominated in litas and states that ‘litas banknotes and coins and litas cent coins shall be used as legal tender and means of payment which it is mandatory to accept for 15 calendar days following the date of the adoption of the euro’. In addition, Lietuvos bankas and commercial banks as well as branches of foreign banks will be prohibited from the date of introduction of the euro from dispensing litas banknotes and coins to their clients. In this context, the ECB recalls that

text: Article 15 of Regulation (EC) No 974/98

text: , which governs banknotes and coins denominated in a national currency unit, was drafted at a time when no euro banknotes and coins were available and people and businesses still had to adapt and get used to the new currency, whereas the situation is different now, when euro banknotes and coins are widely available in Member States with a derogation. Given the difference in the situation, it could also well be that Community law establishes no dual circulation period or a very short one. As an additional consideration, the Lithuanian authorities should clarify the precise meaning of the expression ‘shall be used as legal tender and means of payment which it is mandatory to accept’ in Article 13 of the draft law, and evaluate whether this provision must apply to all natural and legal persons.

text: 9. The ECB notes that no amendments have been proposed to the Lietuvos bankas Act and to the Lithuanian Constitution with respect to amendments to Lithuanian law necessary to comply with the Treaty and the Statute of the European System of Central Banks and of the European Central Bank. The ECB identified various aspects pertaining to Lithuania’s legal convergence in its Convergence Report 2004 , and the Lithuanian authorities need to address these well before the introduction of the euro in Lithuania. It should be noted that this opinion is without prejudice to any future convergence reports which the ECB is required to compile under Article 122(2) of the Treaty.

text: Name of the single currency

text: 10. The ECB notes that the Lithuanian language version of the draft law refers to the ‘euras’ in the nominative singular case as opposed to the ‘euro’. In this regard the ECB would like to remind the Lithuanian authorities that

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

text: stipulates that ‘…the currency of the participating Member States shall be the euro’ . Recital 2 to this Regulation notes that, at its meeting in Madrid on 15 and 16 December 1995, the European Council considered that ‘…the name of the single currency must be the same in all the official languages of the European Union, taking into account the existence of different alphabets’. Taken together, these two provisions make it clear that the name of the single currency is the ‘euro’ and that this name should be identical in legal acts published in all Community languages. Furthermore, the ECB would like to note that new Member States are under an unquestionable legal obligation to comply with political agreements concluded by the European Council pursuant to Article 5(3) of the Act concerning the conditions of accession . Thus, conclusions of the Madrid European Council with regard to the name of the single currency are binding on the new Member States even if they were not recorded in the recitals to

text: Regulation (EC) No 974/98

text: . The Community, as the exclusive holder of competence in monetary matters, determines alone the name of the single currency. As a single currency, the name of the euro needs to be identical in the nominative singular case in all Community languages to ensure that its singleness is apparent. On the basis of these legal considerations and in view of the supremacy of Community law the ECB is of the opinion that the name of the single currency in the nominative singular case is legally required to be consistently rendered in all national legal acts as the ‘euro’.

text: Recognition of the Community’s competence in monetary matters

text: 11. Article 3(1) of the draft law states that from the date of introduction of the euro, the monetary unit of Lithuania shall be the euro. Article 3(2) of the draft law also states that euro banknotes issued by the ECB and by the national central banks (NCBs) and euro coins and euro cent coins issued by the Member States whose currency is the euro shall be legal tender in Lithuania and, in compliance with Community law, it is mandatory to accept them as a means of payment. In addition, Article 8(1) of the draft law provides that, with effect from the date of introduction of the euro, references to the litas in legal acts, agreements and other documents which remain effective thereafter for the remainder of their term shall be regarded as references to the euro, and that amounts in litas shall be regarded as having been expressed in euro and shall be converted following the procedure laid down in the draft law. The combined effect of Articles 3 and 8(1) of the draft law is therefore to substitute the euro for the litas. In this context, the ECB would like to make the following observations relating to the direct applicability of Community regulations.

text: 12. The ECB notes that, in accordance with Article 249 of the Treaty, a Community regulation ‘shall be binding in its entirety and directly applicable in all Member States’. A Community regulation therefore does not need to be transposed into the domestic law of Member States . If a Member State transposes a regulation into national law, the fact that the provision was a Community law provision may be obscured. In addition, if a Member State transposes a regulation in even a slightly different form, there is a risk that its content will be altered. Nonetheless, Member States may provide for appropriate sanctions which were not provided for in a regulation and may continue to regulate various related issues which are not covered in a regulation or may use appropriate methods to prevent breaches of Community rules if national law is in conformity with the Community rules . Pursuant to Article 10 of the Treaty, Member States are even obliged to take necessary measures to ensure fulfilment of the obligations arising from the Treaty or resulting from action taken by Community institutions. Also, a regulation may itself require Member States to adopt implementing measures . The technique of incorporating provisions of Community regulations into national law may only be accepted under exceptional circumstances. In this regard, the Court of Justice has stated, in

text: Case 272/83

text: Commission v Italian Republic , that in that particular instance the application in Italy of a system for encouraging the formation of producer groups could not be ensured by Community regulations alone, it rather depended on the combination of a number of provisions adopted at Community, national and regional level. In such special circumstances, the fact that regional laws incorporate, for the sake of coherence and in order to make them comprehensible to the persons to whom they apply, some elements of Community regulations, cannot be regarded, in the Court’s view, as a breach of Community law.

text: 13. Considering that Community secondary legislation on monetary matters will apply directly in Lithuania once its application is extended to Lithuania following the procedure laid down in the Treaty, the ECB suggests deleting Articles 3 and 8(1) of the draft law, since these provisions merely repeat Articles

text: and

text: of Regulation (EC) No 974/98 and Article 106(1) of the Treaty. The ECB considers that the aforementioned provisions of

text: Regulation (EC) No 974/98

text: and the Treaty are sufficiently coherent and comprehensive making it unnecessary to repeat or reflect them in Lithuanian law. Alternatively, these provisions of the draft law should refer explicitly to the Community legal acts on the basis of which the euro is being introduced in Lithuania.

text: 14. As an additional point, Article 8(1) of the draft law deals with references to the litas in the following instruments: (i) legal acts; (ii) contracts; and (iii) other documents. To contrast,

text: Article 14 of Regulation (EC) No 974/98

text: refers to ‘legal instruments’, the latter concept being defined in the second indent of

text: Article 1 of Regulation (EC) No 974/98

text: as ‘legislative and statutory provisions, acts of administration, judicial decisions, contracts, unilateral legal acts, payment instruments other than banknotes coins, and other instruments with legal effect’. The ECB considers that Article 8(1) of the draft law is insufficiently precise in comparison and therefore proposes that it should be deleted or, alternatively, that the wording of the draft law is aligned with the provisions of

text: Regulation (EC) No 974/98

text: The concept of legal tender

text: 15. With respect to the mandatory acceptance of euro banknotes and coins as provided in Article 3(2) of the draft law, the ECB understands that this does not prejudice the general principle of parties’ contractual autonomy and would not prevent debtors and creditors to agree on discharging debts by way of non-cash money or in a currency other than the one being legal tender. As an enhancement of the draft law, the ECB recommends clarifying that Article 3(2) of the draft law does not prevent parties from agreeing on other methods for the discharge of debts. In addition, mandatory law and customary law may indicate limits to the unrestricted use of cash as means for debt settlement.

text: Publication of images of euro banknotes and coins and euro cent coins

text: 16. The ECB notes that pursuant to Article 4 of the draft law, Lietuvos bankas will publish information on samples of the front side and the reverse side of euro banknotes and the common side (reverse) and the national side (obverse) of euro coins and euro cent coins with descriptions of their authentication features. The ECB welcomes this provision since it will make the Lithuanian public more familiar with euro banknotes and coins. For the sake of completeness, Lietuvos bankas could also publish images of all of the national designs to be found on the obverse of euro coins issued by the Member States that have adopted the euro, since it is not clear from Article 4 of the draft law whether it also applies to euro coins issued by other Member States.

text: Exchange of litas banknotes and coins

text: 17. Article 2(2) of the draft law, inter alia, defines the term ‘exchange of litas into euro’, and the exchange of litas banknotes and coins into euro banknotes and coins falls within that definition. In respect of the precise wording of that definition, the ECB recommends deleting the reference to ‘litas cent coins’. The ECB understands that both litas cent coins and litas coins fall under the general concept of ‘litas coins’. Furthermore, the ECB recommends clarifying in the definition of exchange of litas into euro that the crediting of a client’s account with a corresponding amount in euro is in consideration of the exchange of litas banknotes and coins, as otherwise this might be confused with the simple conversion of balances on bank accounts from litas into euro which will result from the introduction of the euro without any exchange of banknotes and coins necessarily taking place, as will be provided for in Community legislation.

text: 18. The ECB welcomes the provisions of Article 5 of the draft law concerning the exchange of unlimited amounts of litas into euro free of charge by Lietuvos bankas and, for a limited period of time, by commercial banks and Lithuanian branches of foreign banks. The ECB also notes that

text: Article 16 of Regulation (EC) No 974/98

text: states that the issuers of banknotes and coins of the Member States will continue to accept, against euro at the conversion rate, the banknotes and coins previously issued by them ‘in accordance with the laws or practices’ of each participating Member State. The draft law therefore now expressly clarifies that Lietuvos bankas will exchange litas banknotes and coins into euro for an unlimited period of time. The ECB understands that this conforms with the current practice applied by Lietuvos bankas and welcomes this provision as it enhances legal clarity.

text: 19. As an additional point, the Lithuanian authorities may wish to specify in the draft law whether there should be any limit on the amount of fees to be charged by banks for exchange operations after expiry of the period during which they will be obliged to exchange litas to euro without charge.

text: Conversion rate and supplementary rounding rules

text: 20. With respect to the conversion rate and the recalculation rules, Article 6 of the draft law refers to the irrevocably fixed exchange rate and the rules set out in EU legal acts. This Article further lays down rules for interim rounding of amounts on conversion from litas into euro. The ECB notes that in certain circumstances a more precise conversion of monetary amounts may be appropriate, in particular when the application of general rounding rules would result in numbers different from those expected by interested parties, e.g. consumers, as demonstrated in a recent case before the Court of Justice . Therefore, the Lithuanian authorities may consider it relevant to assess each case individually in order to determine whether interim conversion of amounts is fair and acceptable.

text: 21. Moreover, the Lithuanian authorities may wish to specify how and by whom the ‘more precise principles of expression’ referred to in Article 6(3) of the draft law will be determined and what rules the application of these principles may require.

text: 22. In the context of converting monetary amounts, the ECB notes that Article 6 of the draft law states that the exchange and conversion of litas into euro is based on the irrevocably fixed conversion rate and that the conversion rules laid down in Community legal acts apply. However, it appears that the provisions of the draft law referring to the conversion of monetary amounts are not uniform in all instances. For instance, Article 2(2) of the draft law states that the exchange of litas into euro is based on the irrevocably fixed conversion rate, whilst other provisions, such as Articles

text: and

text: , refer to the conversion of monetary amounts ‘in accordance with the procedure laid down in the draft law’. Finally, Article 11(2) of the draft law refers to the conversion of prices by applying, in accordance with the procedure laid down in Article 6 of the draft law, the irrevocably fixed coversion rate. For the sake of clarity, the draft law should contain a uniform and explicit reference to Community requirements for conversion to avoid the risk of the draft law being misinterpreted with the result that Community rounding and expression rules do not apply in all circumstances.

text: Conversion of deposits and accounts

text: 23. Article 7 of the draft law provides that deposits and other balances on clients’ accounts in litas will be converted into euro on the date of introduction of the euro free of charge in accordance with the procedure laid down in the draft law.

text: 24. Whilst not legally indispensable in the light of

text: Article 14 of Regulation (EC) No 974/98

text: , Article 7 of the draft law supplements the Community rule to the extent that it adds a prohibition on imposing any charges for converting deposits or other balances. This conforms with the standards of good practice, as described in

text: Article 2 of Commission Recommendation 98/286/EC of 23 April 1998

text: concerning banking charges for conversion to the euro . In addition, the ECB suggests that the Lithuanian authorities could include a provision in the draft law stating that balances on all types of accounts with credit institutions and other entities are to be converted without charge.

text: Financial reporting and other related documents

text: 25. Article 8(2) of the draft law states that financial, statistical and tax reporting for the periods until the date of the adoption of the euro are drawn up in litas, unless other legal acts provide otherwise. The ECB does not object to this provision of the draft law, to the extent it is in line with Community law.

text: Replacement of national reference rates

text: 26. Article 9(1) of the draft law replaces, with effect from the date of introduction of the euro, all references to VILIBOR (Vilnius Interbank Offered Rate) in legal acts, agreements, and other documents by references to EURIBOR (Euro Interbank Offered Rate). References to the VILIBOR overnight interest rate are replaced by references to EONIA (Euro Overnight Index Average). The ECB understands that VILIBOR is currently published by Lietuvos bankas pursuant to Resolution No 211 of Lietuvos bankas’ Board of 10 December 1998 .

text: 27. The ECB understands that there will be no intermediary stage during which a national substitute rate for VILIBOR will be organised. The changes proposed by the draft law are therefore welcome, since they will further the unity of the Europe-wide money market and avoid the maintenance of national reference rates. The ECB also notes that it is proposed that VILIBID (Vilnius Interbank Bid Rate), which is currently published by Lietuvos bankas, will cease to exist from 1 January 2006, as set out in Resolution No 68 of Lietuvos bankas’ Board of 28 April 2005. The ECB also suggests inserting a provision in the draft law allowing parties to deviate from the rule described in this paragraph by mutual agreement.

text: 28. Given that VILIBOR will be replaced by respective euro area reference rates, the draft law should also instruct Lietuvos bankas to stop publishing VILIBOR from the date of introduction of the euro in Lithuania (with the exception of historical data). Alternatively, the ECB expects that Lietuvos bankas will amend its Resolution No 211 of 10 December 1998 to the effect that publication of VILIBOR will cease.

text: 29. The Lithuanian authorities should review all national legal acts with a view to verifying whether the replacement of VILIBOR with EURIBOR or EONIA, respectively will always be appropriate. For instance,

text: Article 3(1)

text: (d) of Directive

text: of the European Parliament and of the Council of 29 June 2000 on combating late payment in commercial transactions explicitly requires, with regard to participating Member States, that the interest rate applied by the ECB to its main refinancing operations is used when calculating penalties for late payments.

text: Renominalisation of debt securities

text: 30. Pursuant to Article 10(1) of the draft law, the nominal value of all Government securities denominated in litas will be changed by dividing, using the conversion rate, the total nominal value of securities held by each particular investor in each individual account, then multiplying it by 100 and rounding it to the last whole number in accordance with the procedure laid down in Article 6 of the draft law. Effectively, the nominal value of securities is then expressed in euro cent. The ECB welcomes the regime envisaged for the renominalisation of public debt. The method chosen, i.e. based on individual holdings and rounding to the euro cent, is similar to the method chosen by many Member States on the eve of the entry to the third stage of economic and monetary union.

text: 31. As proposed in Article 10(2) of the draft law, the method described in paragraph 30 will also apply to other dematerialised debt securities, unless the issuer and the debt holders agree on a different method. It is unclear, however, whether Article 10(2) of the draft law would apply to convertible bonds.

text: 32. The ECB notes that the draft law does not address a number of issues that other Member States have considered it appropriate to regulate in relation to the redenomination of debt securities, for example: (i) the allocation to the issuer/borrower of the costs of redenomination/renominalisation and (ii) a short limitation period for challenging redenomination/renominalisation measures.

text: Conversion of shares

text: 33. Pursuant to Article 10(3) of the draft law, the nominal value of equity securities will be changed by dividing the total nominal value in litas of issued securities of the same class and nominal value by the conversion rate and the number of issued securities of that class and nominal value. In addition, Article 10(4) of the draft law prescribes that a decision on the changes to the nominal value of equity securities (exact to at least one euro cent) should be taken by the shareholders of a company in general meeting at least 30 calendar days before the date of introduction of the euro and that the shareholders should decide whether any resulting increase of authorised capital should be covered from additional contributions to the capital of the company or from company funds, and whether the difference resulting from any decrease should be transferred to the company’s reserves. Article 10(5) of the draft law concerns situations in which no decision is taken by shareholders within the specified time limit and states that the nominal value of equity securities in euro calculated as described above should be corrected to two decimal places to result in a nominal value for equity securities in whole euro cent. Any difference resulting from such change should be transferred to the company’s reserves.

text: 34. In this context, the ECB notes that pursuant to Article 40(6) of the Act on enterprises the nominal value of a share has to be expressed in a whole number of litas without reference to cents. If the conversion rules described in paragraph 33 are applied, the nominal value of a share may be an amount other than a whole amount. The Lithuanian authorities should therefore consider amending the Act on enterprises accordingly.

text: 35. The ECB also notes that entities other than companies operating under the Act on enterprises may be affected by the euro changeover and therefore suggests that the Lithuanian authorities should consider whether to adopt special rules concerning such entities and in particular with regard to the conversion into euro of their authorised capital, shares and other subscriptions to their capital.

text: Dual display of prices

text: 36. The dual display of prices is governed by Article 11 of the draft law which lays down the following: (i) persons engaged in the sale of goods (services) will be obliged to display prices of goods (services) in euro and in litas no later than 60 calendar days prior to the date of introduction of the euro and for 60 calendar days after the date of introduction of the euro; (ii) prices that are displayed will be calculated by applying the irrevocably fixed conversion rate in accordance with the procedure laid down in Article 6 of the draft law; (iii) prices displayed in euro and in litas should be easy to understand and should not be misleading or presented along with superfluous information.

text: 37. Taking into account

text: Commission Recommendation 98/287/EC of 23 April 1998

text: concerning dual display of prices and other monetary amounts , it is suggested that the Lithuanian authorities could consider providing for rounding to the nearest euro cent for prices which have been converted from litas into euro and for an obligation to clearly indicate what is the unit in which the price is determined and what is the counter-value. Certain other issues, such as the display of dual prices on receipts, payslips or other financial statements, could also be considered.

text: Exchange of mutilated euro banknotes and coins

text: 38. As regards the exchange of mutilated euro banknotes and coins provided for in Article 12(3) of the draft law, the ECB notes that this provision should not feature in the draft law. This matter is already regulated by Decision ECB/2003/4 of the ECB of 20 March 2003 on the denominations, specifications, reproduction, exchange and withdrawal of euro banknotes and, in order to ensure uniform application of this Decision and thus protect the people’s confidence in euro banknotes and coins, national authorities of Member States without a derogation should refrain from implementing the Decision in national law. In addition, there is no need to mention Decision ECB/2003/4 in the Annex to the draft law which lists the Community legal acts implemented by the draft law.

text: Conversion of salaries, pensions and other social benefits

text: 39. The second point of Article 15(1) of the draft law mandates the Government to prepare amendments to legal acts concerning the payment of salaries, pensions and other social benefits. The draft law provides for the rounding rules when converting amounts of salaries, pensions and other social benefits, and the ECB understands that the described method would ensure that rounding is effected in a neutral manner or in favour of recipients. However, the Lithuanian authorities should carefully review the cases in which the above amounts are used as a threshold rather than a payable amount.

text: Adjustment of certain ‘round amounts’

text: 40. The ECB notes that the draft law does not deal with the adjustment of ‘round amounts’ such as fines, charges, taxes etc., after they have been converted into euro. An adjustment of such amounts after conversion is a prerogative of national authorities which may contribute to greater legal certainty and transparency, and increase acceptance of the single currency.

text: Entry into force of the draft law and repeal of certain other laws

text: 41. As regards the entry into force of the draft law, the blank reference in Article 16(1) of the draft law may appear somewhat misleading, since various provisions of the draft law will not enter into force at the same time. For example, provisions concerning the dual display of prices will become effective prior to the introduction of the euro, while certain other provisions may only enter into force on the date of introduction of the euro in Lithuania. With respect to at least some provisions of the draft law, the Lithuanian authorities should consider providing for them to enter into force if and when the Council, acting in accordance with Article 122(2) of the Treaty, decides that Lithuania fulfils the necessary conditions for the adoption of the euro and abrogates the derogation of Lithuania or, where relevant, when such an abrogation enters into force. In addition, once these decisions are taken by the Community, the Lithuanian authorities might need some time, before the draft law becomes effective, to review the latter’s consistency with the new Community legislative framework.

text: 42. Article 16(2) of the draft law states that a number of laws, including (but not limited to) the Act on the issuance of money, the Act on money and the Act on foreign currency in the Republic of th Lithuania, are repealed from the 15 day after the date of introduction of the euro. With respect to th the period starting after the date of introduction of the euro and ending on the 15 day thereafter, the aforementioned laws will apply, as stated in Article 16(2) of the draft law, insofar as they do not contradict the draft law. In the ECB’s view, Article 16(2) of the draft law should be amended to provide that the identified laws are, insofar they concern national competencies over monetary matters, repealed from the date of introduction of the euro since provisions of national law governing monetary matters may not remain in force after the introduction of the euro in Lithuania. As soon as the abrogation of the derogation becomes effective with respect to Lithuania, i.e. from the date of introduction of the euro, all monetary matters will be the competence of the Community. Provisions of national law, such as those governing the national currency, will have to be aligned with Community law or, where necessary, repealed from that date. It is important to note that national law may set out the modalities of the changeover, but only to the extent this is delegated by Community legislation or is not foreseen in and does not contradict Community legislation.

text: 43. The ECB understands that the Litas Committee, which was established in 1991 pursuant to the Act on the issuance of money, will be dissolved on the repeal of the Act on the issuance of money and that no separate resolution for the dissolution of the Litas Committee will be passed by Lietuvos Respublikos Seimas (the Parliament). However, some of the provisions of the Resolution of the Litas Committee of 14 June 1993 on the introduction of Lithuania’s national money and the withdrawal of temporary money-talonas from circulation, on the basis of which litas banknotes and coins of particular denominations were put into circulation, may still need to be repealed by the Litas Committee or by the Parliament. Similarly, the Lithuanian authorities may review other Lithuanian legal acts adopted on the basis of the Act on the issuance of money, such as Resolution No 461 of Lietuvos bankas’ Board and the Government of 16 June 1993 on the withdrawal of the Lithuanian talonas from circulation in Lithuania which makes it mandatory to effect all payments only in litas, and Resolution No 585 of Lietuvos bankas’ Board and the Government of 30 July 1993 on a prohibition on trade in foreign currency in the internal market of the Republic of Lithuania which, in addition, makes it mandatory to express all prices in litas only .

text: 44. Points 10 to 19 of Article 16(2) of the draft law repeal the Act on foreign currency in the Republic of Lithuania , as amended (hereinafter the ‘Act on foreign currency’). This act provides, in general terms, for the following: (i) that foreign and national persons may open accounts in foreign currency with credit institutions operating in Lithuania; (ii) that foreign exchange services may only be provided by licensed credit institutions; (iii) that Lietuvos bankas is empowered to establish the rules for the exchange of foreign currency; (iv) that foreign currency may be used for non-cash payments, if the parties so agree; the parties may also agree to use the euro for both cash and non-cash payments; (v) that loans granted by foreign institutions have to be registered with the Ministry of Finance (if the State guarantees their repayment) or Lietuvos bankas; and (vi) that all enterprises, institutions, organisations and credit institutions are obliged to carry out their accounting in accordance with the official litas exchange rate and the reference rates published by Lietuvos bankas.

text: 45. With respect to the Act on foreign currency, the ECB understands that after its repeal, foreign exchange services will be provided pursuant to the Act on financial institutions and that the persons entitled to provide such services will not necessarily only be credit institutions. In addition, it appears that with the repeal of the Act on foreign currency: (i) the obligation to report on the opening of accounts abroad will be governed by other Lithuanian legal acts; (ii) loans granted by foreign persons will no longer be registered; and (iii) payments in any foreign currencies will, to the extent parties consent to such payment, be allowed.

text: 46. Article 6 of the Act on foreign currency merits special consideration. This Article states that all enterprises, institutions, organisations and credit institutions conduct their accounting in accordance with the official litas exchange rate and exchange rates between litas and foreign currencies, as published by Lietuvos bankas. While the latter provision is to be repealed on the adoption and entry into force of the draft law, the ECB notes that Lithuanian law currently provides for a fixed exchange rate regime. Therefore, a variety of legal acts refer to two distinct concepts: (i) the official litas exchange rate; and (ii) exchange rates between litas and foreign currencies, as published by Lietuvos bankas. The official litas exchange rate against the anchor currency is established by Lietuvos bankas, in coordination with the Government. At the moment, the anchor currency for litas is the euro, pursuant to resolutions adopted by Lietuvos bankas and the Government . Any provisions of Lithuanian law which provide for a fixed exchange rate regime will need to be repealed upon the introduction of the euro in Lithuania in view of the Community’s exclusive competence over exchange rate matters (see, for instance, Article 111 of the Treaty). The ECB notes that Lietuvos bankas currently publishes exchange rates for litas against major currencies. As a general remark, in view of the Community’s exclusive competence over exchange rate matters and the currently existing market-based exchange rate regime in the euro area, a Eurosystem member may not individually establish or ‘fix’ official exchange rates for any currency against the euro with the effect that market participants would be obliged to trade at these rates. A Eurosystem member may, however, establish reference exchange rates in accordance with the Eurosystem’s own criteria and methodology. Participating Member States may not impose such reference rates on parties who may agree, acting in good faith, on a different exchange rate for their transactions which could then be used for the purpose of accounting or financial reporting, for example.

text: Other issues

text: 47. With regard to the application of penal provisions on the counterfeiting of banknotes and coins, the ECB notes that Article 213 of the Lithuanian Criminal Code does not make counterfeiting of banknotes and coins which have been withdrawn from circulation a criminal offence, although an attempt to exchange such counterfeits might be subject to other provisions of the Criminal Code. Nevertheless, the ECB suggests that Lithuanian criminal law should provide for protection against counterfeiting of litas banknotes and coins even after they cease to be legal tender in Lithuania, especially given the fact that Lietuvos bankas will exchange them into euro for an unlimited period of time.

text: 48. As far as the protection of the financial system against money laundering is concerned, the ECB expects that all institutions and entities involved in the euro changeover in Lithuania will vigorously enforce all measures necessary to prevent money laundering. As a specific comment, the ECB notes that the Act on the prevention of money laundering only applies to operations involving banknotes and coins which are legal tender (cf. the definition of ‘money’ in Article 2(7) of the Act). There is resulting uncertainty as to whether the requirements of the Act on prevention of money laundering apply to the exchange of non legal tender banknotes and coins and in particular to the acceptance of such non legal tender banknotes and coins by financial institutions and other entities. The Lithuanian authorities should therefore consider what action is needed in order to remove this uncertainty. In addition, the ECB notes that it is not clear whether Lietuvos bankas is itself obliged under the Act on the prevention of money laundering to report suspicious financial or other operations to relevant national authorities. The Lithuanian authorities could consider inserting such an explicit obligation into the Act on the prevention of money laundering, especially taking into account that the draft law will impose an obligation on Lietuvos bankas to exchange unlimited amounts of litas, be it legal tender or not, into euro for an unlimited period of time.

text: 49. Regarding the obligations of economic agents in relation to the preparation of automatic vending machines in anticipation of the euro changeover, the draft law could provide for specific rules. As the draft law stands now, it appears that the entire non-banking community will be obliged to accept both litas and the euro as legal tender during the dual circulation period which may pose practical difficulties, especially if the conversion of litas amounts into euro results in uneven figures.

text: 50. Certain provisions of the draft law, such as Articles

text: and

text: , refer to ‘euro cent coins’. The ECB understands that both euro cent coins and euro coins fall under the general concept of ‘euro coins’ and therefore a specific reference to euro cent coins is unnecessary.

text: 51. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 14 June 2005. [signed] The President of the ECB Jean-Claude TRICHET


text: KOM(2005) 127 slutlig innehåller både förslaget (referens 2005/0029(CNS)) och det parallella förslaget (referens 2005/0030 (CNS)).

text: EGT L 339, 21.12.2001, s. 50.

text: Punkt 3 i ECB:s yttrande

text: av den 9 oktober 2001 på begäran av Europeiska unionens råd om ett förslag till rådets beslut om inrättandet av ett handlingsprogram för utbildning, utbyte och stöd med avseende på skydd av euron mot förfalskning (Perikles-programmet) (EGT C 293, 19.10.2001, s. 3).

text: Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank - First report on the practical preparations for the future enlargement of the euro area (Meddelande från kommissionen till rådet, Europaparlamentet, Europeiska ekonomiska och sociala kommittén, Regionkommittén och Europeiska centralbanken - Första rapporten om de praktiska förberedelserna för den framtida utvidgningen av euroområdet), COM(2004) 748 final, 10 November 2004, se http://europa.eu.int.

publisher: Europeiska centralbanken

sprak: sv

title: Europeiska centralbankens yttrande av den 21 juni 2005 på begäran av Europeiska unionens råd över två förslag till rådsbeslut om handlingsprogrammet för utbyte, stöd och utbildning med avseende på skydd av euron mot förfalskning (Perikles-programmet) (CON/2005/22)

serie: con

text: 1. Den 10 maj 2005 mottog Europeiska centralbanken (ECB) en begäran från Europeiska unionens råd om ett yttrande över två förslag, dels ett förslag till rådets beslut om ändring och förlängning av rådets beslut av den 17 december 2001 om inrättande av ett handlingsprogram för utbyte, stöd och utbildning med avseende på skydd av euron mot förfalskning (Perikles-programmet) (nedan kallat förslaget) och dels ett förslag till rådets beslut om att utsträcka tillämpningen av rådets beslut om ändring och förlängning av rådets beslut av den 17 december 2001 om inrättande av ett handlingsprogram för utbyte, stöd och utbildning med avseende på skydd av euron mot förfalskning (Perikles-programmet) till att även omfatta icke-deltagande medlemsstater (nedan kallat det parallella förslaget).

type: stycke

text: 2. ECB:s behörighet att avge ett yttrande grundas på artikel 105.4 första strecksatsen i Fördraget om upprättandet av Europeiska gemenskapen. I enlighet med artikel 17.5 första meningen i arbetsordningen för Europeiska centralbanken har detta yttrande antagits av ECB-rådet.

text: 3. Perikles-programmet inrättades genom

text: rådets beslut 2001/923/EG av den 17 december 2001

text: om inrättande av ett handlingsprogram för utbyte, stöd och utbildning med avseende på skydd av euron mot förfalskning (Perikles-programmet). Både vad gäller förslaget och det parallella förslaget skulle ECB i enlighet med vad den gav uttryck för i sitt yttrande om förslaget till beslut

text: vilja anföra att den välkomnar och ger sitt fulla stöd till initiativ som syftar till att skydda euron mot förfalskning genom utbildning, utbyte och stöd till särskilda nyckelgrupper.

text: 4. ECB noterar att förslagets huvudsakliga syfte är att förlänga Perikles-programmet (som löper ut den 31 december 2005) till den 31 december 2011 med samma årsbudget på en miljon euro. Förslaget möjliggör också administrativt stöd till gränsöverskridande utredningar, som godkänts efter förhandsbedömning av Europol, när sådant stöd inte kan erhållas från någon annan europeisk institution. Enligt förslaget skall gemenskapens bidrag till samfinansiering av informationsutbyte och externa åtgärder öka från 70 % till 80 % samtidigt som man antar en mer flexibel hållning avseende begränsningarna av det antal projekt som en och samma medlemsstat får lägga fram per år för finansiering inom ramen för Perikles-programmet.

text: 5. Inledningsvis påpekas att artikel 123.4 i fördraget möjligen inte räcker som rättslig grund för förslaget, i synnerhet med beaktande av programmets utvidgning till att omfatta administrativt stöd till gränsöverskridande utredningar.

text: 6. Vad gäller förslagets materiella innehåll vill ECB understryka vikten av att säkerställa att förlängningen av Perikles-programmet kopplas till den tidpunkt då euron införs i de nya medlemsstaterna. Eftersom euron i de flesta nya medlemsstaterna beräknas införas under perioden 2008 till 2010, beaktar den föreslagna förlängningen av Perikles-programmet till den 31 december 2011 behovet av ökade framtida insatser vad gäller utbildning, informationsutbyte och stöd. Förslaget att förlänga Perikles-programmet är också välkommet eftersom det sannolikt kommer att sammanfalla med, och därmed beakta, utgivningen av en andra serie eurosedlar som kommer att ske mot decenniets slut.

text: 7. På samma sätt är ökningen av gemenskapens bidrag till samfinansiering av informationsutbyte och externa åtgärder samt den mer flexibla hållningen avseende begränsningen av det antal projekt som en och samma medlemsstat får lägga fram för finansiering, två ytterligare positiva åtgärder för att främja de områden som är i störst behov av stöd.

text: 8. Det är mycket viktigt att Perikles-programmet samordnas med andra gemenskaps- eller EU-program, samt även med Europol- och ECB-projekt, såsom framgår av

text: artikel 5 i beslut 2001/923/EG

text: . Sålunda skall gränsöverskridande utredningar enligt förslaget endast vara berättigade till administrativt stöd om sådant stöd inte kan fås från andra europeiska institutioner. Enligt förslaget skall Europol göra en förhandsbedömning av finansieringen av administrativt stöd. Eftersom finansieringen av administrativt stöd även kan omfatta gränsöverskridande utredningar som rör förfalskade eurosedlar, skulle rådet även kunna överväga att involvera ECB i denna bedömning. ECB noterar att det skulle vara en fördel om projekt som skall finansieras inom ramen för Perikles-programmet kunde granskas gemensamt av kommissionen, ECB och Europol, och att det beslut som skall tas kräver dessa tre organs samtycke inom ramen för den styrgrupp som redan har inrättats för att ta fram en gemensam strategi mot förfalskningar av euron.

text: 9. ECB noterar att förslaget endast innehåller ett begränsat antal ändringar som berör uppföljning och utvärdering. Mot bakgrund av att Perikles-programmet skall förlängas med sex år rekommenderar ECB att man i förslagets artikel

text: och

text: inför ett mer utförligt, öppet och tydligt utvärderingsförfarande. ECB bör fullt ut involveras i utvärderingen av Perikles-programmets tillämplighet, genomslagskraft och effektivitet så att det blir möjligt för ECB att avge ett välgrundat yttrande till rådet om eventuella framtida förlängningar av programmet.

type: vagledning

utgivare: ecb


text: ZABIL Regulation 1/2004 on balance of payments was the first step in this adjustment to the reporting system, giving rise to ECB Opinion

text: of 8 July 2004 and ECB Opinion

text: of 30 July 2004.

text: See also ECB Opinion

text: of 14 August 2002 at the request of the Sveriges Riksbank on a draft legislative proposal to amend the Sveriges Riksbank Act (1988:1385) with regard to the collection of balance-of-payments statistics and the liquidity criterion for securities used in monetary policy operations.

sprak: en

title: Opinion of the European Central Bank of 11 July 2005 at the request of the Oesterreichische Nationalbank on a draft regulation on the reporting of cross border services (CON/2005/23)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 11 July 2005 at the request of the Oesterreichische Nationalbank on a draft regulation on the reporting of cross border services (

type: rubrik

text: 1. On 27 April 2005, the European Central Bank (ECB) received a request from the Oesterreichische Nationalbank (OeNB) for an opinion on a draft regulation on the reporting of cross-border services (Entwurf einer Meldeverordnung ZABIL 1/2005 der Oesterreichische Nationalbank betreffend die statistische Erfassung des grenzüberschreitenden Dienstleistungsverkehrs) (hereinafter the ‘draft regulation’).

text: 2. The ECB’s competence to deliver an opinion is based on the fourth 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 regulation relates to the collection, compilation and distribution of monetary, financial, banking, payment systems and balance of payments statistics. 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: 3. The draft regulation represents the second step in the phased introduction of a new reporting system in Austria for balance of payments and international investment position statistics (hereinafter ‘cross-border statistics’), and reflects a general change to a system that relies predominantly on direct reporting by legal entities that conduct cross-border transactions .

text: 4. In order to compile the balance of payments current account, the reporting requirements defined in the draft regulation cover the services that reporting agents provide to or receive from nonresidents. The collection of data on cross-border services of reporting agents from almost all economic sectors is entrusted to the Bundesanstalt StatistikÖsterreich (Austria’s central statistics authority). Only the reports on cross-border services of legal entities in the financial sector (‘credit institutions’ and ‘insurance undertakings’) are directly sent to the OeNB.

text: 5. The draft regulation includes sector-specific thresholds that determine the level from which reporting on cross-border service transactions becomes mandatory. Reporting agents are in general required to report data on their cross-border services on a quarterly or annual basis.

text: 6. The ECB welcomes the draft regulation, which continues the adjustment of the reporting system in Austria. Whilst reducing the reporting burden falling on the banking sector and financial intermediaries, the draft regulation should ensure the quality of the data contributed to euro area cross-border statistics.

text: 7. The ECB considers that, notwithstanding the changes proposed to the Austrian reporting system in the draft regulation, it is for the OeNB to ensure that the data will continue to be collected and compiled in accordance with Guideline ECB/2004/15 of 16 July 2004 on the statistical reporting requirements of the European Central Bank in the field of balance of payments and international investment position statistics, and the international reserves template . In that light, notwithstanding the proposed changes, the ECB takes note that: (i) the definition of sector-specific thresholds for statistically-relevant transactions is comprehensive enough to cover all statistically-relevant cross-border services so as to obtain sufficiently precise data for euro area cross-border statistics; and (ii) while data on cross-border services will be collected on a quarterly or annual basis, the OeNB remains responsible for providing the ECB with aggregated data for the euro area monthly balance of payments statistics, which meet the quality standards set out in Guideline ECB/2004/15.

text: 8. Both the draft regulation and Regulation ZABIL 1/2004 (Meldeverordnung der Oesterreichischen Nationalbank ZABIL 1/2004) governing the new reporting system in Austria for cross-border statistics, cover almost all items of the current, capital and financial accounts of the balance of payments, and the international investment position. Nonetheless, the ECB considers that it is for the OeNB to ensure that the availability and quality of the data on other cross-border transactions, for example transactions in goods or current transfers in all economic sectors, are in accordance with Guideline ECB/2004/15.

text: 9. The draft regulation provides that the OeNB shall entrust data collection to the Bundesanstalt Statistik Österreich, in this case data on cross-border services. The ECB does not object in principle to the OeNB outsourcing specific data collection activities, provided certain legal requirements are met . In particular, the OeNB must retain full responsibility for all such activities, including the transmission of all relevant data to the ECB. Therefore, the OeNB must also be able to check that the ECB’s statistical reporting requirements are being fully met. As far as reporting requirements vis-à-vis the ECB are concerned, any cooperation between the OeNB and any other competent authority in Austria is subject to the requirements laid down in Guideline ECB/2004/15. The ECB invites the OeNB to consult the ECB on any agreement outsourcing data collection activities that the OeNB concludes in this context.

text: 10. Finally, the ECB considers that Article 1(3) of the draft regulation, which provides that the data collected ‘may only be used for statistical purposes’, should not be understood as denying the OeNB or the ECB access to such data, whether on the grounds of confidentiality or otherwise. In particular, it should not be understood as conflicting with

text: Article 8(2) of Council Regulation (EC) No 2533/98 of 23 November 1998

text: concerning the collection of statistical information by the European Central Bank . Pursuant to

text: Article 8(2)

text: confidential data collected under the responsibility of the national central banks of the Eurosystem, once transmitted to the ECB, may be used to the extent and in the level of detail necessary to carry out European System of Central Banks tasks.

text: 11. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 11 July 2005. The President of the ECB Jean-Claude TRICHET


text: The draft law provides for amendments to 27 existing laws including the Act establishing ministries and other central administrative bodies of the Czech Republic No 2/1969 Coll., as amended, the Act on the Securities Commission No 15/1998 Coll., as amended, the Act on Česká národní banka No 6/1993 Coll., as amended (hereinafter the ‘ČNB Act’), the Act on insurance No 363/1999 Coll., as amended, the Act on supplementary pension insurance with state contribution No 42/1994 Coll., as amended, the Act on savings and credit cooperatives No 87/1995 Coll., as amended (hereinafter the ‘Cooperative Banks Act’), the Act on the financial arbiter No 229/2002 Coll., as amended and the Act on banks No 21/1992 Coll., as amended. 2 OJ L 189, 3.7.1998, p. 42.

text: Under the Act on payment systems No 124/2004 Coll. as amended. The ECB notes in this regard that payment systems not licensed by ČNB fall outside the legal regime established by the Act on payment systems and are not therefore regulated by ČNB. ČNB is, however, generally responsible for the ‘reliability and efficiency of payment systems and their development’ pursuant to

text: Article 2(2)

text: c) of the ČNB Act. 4 Enforced administration is a special regulatory power of ČNB under

text: Articles 26

text: , and 27-33 of the Act on banks enabling it to take over the management of any bank, where shortcomings in the activities of the bank could put at risk the financial stability of the banking system and where the shareholders, in ČNB’s view, have not taken sufficient steps to eliminate those shortcomings.

text: Article 1(1) of Directive 2000/12/EC

text: of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions, OJ L 126, 26.5.2000, p. 1. Directive as last amended by Directive

text: (OJ L 125, 28.4.2004, p. 44). 6 Paragraph 4 of Article IX of the draft provisions amending the Cooperative Banks Act. However, the draft law also states that from the effective date any claims and obligations of the OSCB vis-à-vis the State incurred in connection with repayable financial aid provided to the OSCB by the State under the Cooperative Banks Act will pass to the Cooperative Banks Reinsurance Fund. Paragraph 5 of Article IX of the draft provisions amending the Cooperative Banks Act. 7 Except in the case of proceedings relating to claims of the OSCB vis-à-vis the State incurred in connection with repayable financial aid provided to the OSCB by the State, which pass to the Cooperative Banks Reinsurance Fund and not to ČNB. 8 Paragraph 6 of Article IX of the draft provisions amending the Cooperative Banks Act. 9 Act No 82/1998 Coll. as amended, of 17 March 1998, on State liability for damages caused in the course of the exercise of public authority by decisions or improper administrative action ; especially Articles

text: and

text: Paragraph 6 of Article IX of the draft provisions amending the Cooperative Banks Act. 11 Pursuant to Articles 16-18 of the State Liability Act. The ECB notes however that a theoretical possibility exists of the State having recourse against a former official of the OSCB, who, upon its dissolution, becomes an employee of ČNB. 12 Pursuant to the Act on payment systems No 124/2002 Coll. 13 Pursuant to the Act on trading on the capital markets No 256/2004 Coll. 14 For example ECB Opinion

text: of 7 August 2003 at the request of the Banca d’Italia on a draft regulation on payment systems, payment infrastructures and payment instruments.

text: Specifically §§ 46c-46d (‘administrative offences’) of the draft provisions amending the ČNB Act.

text: Council Regulation (EC) No 1338/2001 of 28 June 2001

text: laying down measures necessary for the protection of the euro against counterfeiting (OJ L 181, 4.7.2001, p. 6),

text: Council Regulation (EC) No 1339/2001 of 28 June 2001

text: extending the effects of

text: Regulation (EC) No 1338/2001

text: laying down measures necessary for the protection of the euro against counterfeiting to those Member States which have not adopted the euro as their single currency (OJ L 181, 4.7.2001, p. 11) and

text: Council Regulation (EC) No 2182/2004 of 6 December 2004

text: concerning medals and tokens similar to euro coins (OJ L 373, 21.12.2004, p. 1).

title: Opinion of the European Central Bank of 15 July 2005 at the request of the Ministry of Finance of the Czech Republic on a draft law on the integration of financial market supervisors (CON/2005/24)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 15 July 2005 at the request of the Ministry of Finance of the Czech Republic on a draft law on the integration of financial market supervisors (

text: 1. On 31 May 2005 the European Central Bank (ECB) received a request from the Ministry of Finance of the Czech Republic for an opinion on a draft law on the amendment of laws in connection with the integration of financial market supervisors (hereinafter the ‘draft law’). The draft law represents the first stage in a broad reorganisation of financial market supervision in the Czech Republic. The draft law amends a number of separate laws and it is proposed that it will enter into force on 1 January 2006 (hereinafter the ‘effective date’).

text: 2. The ECB’s competence to deliver an opinion is based on the first, second, third, fifth and sixth indents of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions as the draft law relates to currency matters, means of payment, a national central bank, payment and settlement systems and also rules applicable to financial institutions that materially influence the stability of financial institutions and markets. 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. Integration of financial market supervisors

text: 3. The draft law reorganises financial market supervision in the Czech Republic in several respects. The main change is to reduce the number of financial market regulators from four to two. Under the draft law, both the Office for the Supervision of Cooperative Banks (OSCB) (a separate state supervisory body) and the Office for the Supervision of Insurance and Pension Funds (which forms part of the Ministry of Finance) will cease to exist. Instead, the two regulators will be the Securities Commission, which will be renamed the Financial Market Commission, and Česká národní banka (ČNB). The responsibilities of the Office for the Supervision of Insurance and Pension Funds will pass to the Financial Market Commission. ČNB will be responsible for supervising savings and credit cooperatives (hereinafter ‘cooperative banks’), including their participation in designated payment systems licensed by ČNB under a separate law .

text: 4. The ECB welcomes in principle the changes to the organisation of financial market supervision and oversight in the Czech Republic laid down by the draft law. The streamlining of financial market supervision into just two authorities should prevent inefficient overlaps and create a basis for more efficient supervision over financial institutions and markets in the Czech Republic. In that context, the fact that the responsibility for supervising banks, foreign branches and also now cooperative banks is being placed under one roof within ČNB constitutes a positive development.

text: 5. As set out in the explanatory memorandum accompanying it, the draft law represents the first stage in a broad reorganisation of financial market supervision and oversight in the Czech Republic. During the second stage of this reorganisation, which is intended to take place, at the latest, when the Czech Republic adopts the euro, it is intended to merge the supervisory functions of both ČNB and the Financial Market Commission into a single supervisory authority. The ECB should be formally consulted on this future legislative initiative. However, as it is not clear at this moment whether any future single supervisory authority will be within or outside ČNB, the ECB would already at this stage like to draw attention to the need to ensure that ČNB can perform its tasks smoothly in relation to financial stability and the oversight of payment and securities settlement systems (for the latter, see paragraphs 13 to 15 below). Supervision of cooperative banks

text: 6. Under the draft law, responsibility for the supervision of cooperative banks is assigned to ČNB. While cooperative banks remain governed by specific legislation and do not fall under the legislation governing other banks, they will be supervised largely on the same basis as other banks, for example as regards licence terms, prudential rules and notification obligations. In particular, cooperative banks will be required to observe the same minimum reserve requirements as those applicable to banks and branches of foreign banks. They will also be required to participate in the deposit insurance scheme for banks and to contribute a fixed annual percentage of their deposits to the Deposits Insurance Fund, as banks and branches of foreign banks currently do under the Act on banks. Unlike its powers vis-à-vis banks and branches of foreign banks, however, ČNB will not have statutory powers to impose a regime of enforced administration on a cooperative bank.

text: 7. The ECB broadly welcomes the provisions of the draft law pursuant to which ČNB will supervise cooperative banks, as this approach is consistent with ČNB’s overall responsibility for the supervision of credit institutions. It is also consistent with the definition of ‘credit institution’ laid down in the Consolidated Banking Directive , which implicitly includes cooperative banks, as they receive deposits or other repayable funds from the public and grant credits for their own account. The fact that certain regulatory instruments, such as enforced administration, will not be available in relation to cooperative banks is not per se of concern, although it should be ensured that all credit institutions are regulated as far as possible on an objective and transparent basis. The regulatory regime applicable to one type of credit institution should not differ fundamentally from that applicable to another, merely because the former is less economically significant than the latter. ČNB’s succession to the OSCB’s rights and obligations

text: 8. Under the draft law, the basic position is that ČNB will become the OSCB’s legal successor from the effective date, whereupon the OSCB’s rights, obligations and liabilities arising from property 6. and other legal relations will pass from the OSCB to ČNB Making ČNB the legal successor to the liabilities of a separate supervisory authority raises issues relating to ČNB’s financial independence and its compliance with the prohibition on monetary financing under the Treaty. However, the draft law also lays down certain financial commitments of the Czech State to cover ČNB’s potential liabilities in respect of the activities of the OSCB. In particular, the draft law provides that, from the effective date, ČNB will be substituted for the OSCB as a party to any proceedings to which the OSCB is currently a party and that the State will meet any financial obligations incurred by ČNB as a result of it being substituted for the OSCB in any such proceedings .

text: 9. Moreover, the ECB understands that pursuant to the Czech State Liability Act the State is primarily liable for any damage caused by unlawful decision or improper administrative action by a legal entity or person in the course of executing public authority on the State’s behalf. The carrying out of supervision clearly constitutes the exercise of a public authority. The entity or person carrying out public authority could be the State (or any organisational unit of the State), ČNB, the OSCB, or any other person provided it has separate legal personality. The ECB therefore understands that, besides the specific financial commitments of the State under the abovementioned provisions of the draft law, the State will remain liable on the basis of the State Liability Act for any damage caused to third parties as a result of any unlawful decision or improper administrative action of the OSCB carried out in the exercise of its public authority. Accordingly, as regards legal proceedings, the State remains liable for settling the financial obligations of the OSCB, irrespective of whether those obligations arise in proceedings initiated before the effective date or thereafter provided the proceedings concern the OSCB’s supervisory activities.

text: 10. The ECB understands that pursuant to the draft law the State will also be required to meet any financial obligations incurred by ČNB arising from non-supervision related proceedings, such as employment relations or liquidation proceedings.

text: 11. Furthermore, in the event that the State pays out damages for an unlawful decision or improper administrative conduct of the OSCB on the basis of its primary obligations under the State Liability Act, the ECB understands that this would not give the State any right of financial recourse against ČNB or any of its officials , in view of the fact that ČNB will not have been involved in any way whatsoever in the supervision of cooperative banks prior to the effective date.

text: 12. The ECB welcomes the abovementioned provisions of the draft law in view of the fact that, in conjunction with the State Liability Act, they appear to insulate ČNB from financial obligations resulting from the OSCB’s activities. These provisions do not therefore require assessment from the perspective of ČNB’s financial independence and its compliance with the prohibition on monetary financing under the Treaty. Oversight of payment and securities settlement systems

text: 13. The responsibility for oversight of payment and securities settlement systems remains divided under the draft law between ČNB, which oversees payment systems it has licensed , and the Financial Market Commission, which oversees securities settlement systems (SSSs) . While the ECB is aware that this split between the oversight of payment systems and securities settlement systems is not, as such, a new development in the Czech Republic, the ECB would like to take this opportunity to share some observations in this regard.

text: 14. As recalled in previous ECB opinions , oversight is one of the core competencies attributed to the Eurosystem by the Treaty. The oversight of payment systems has always been recognised as one of the main functions of national central banks (NCBs) and the framework for this function, although informal, has been effective and successful. A growing number of NCBs see a benefit in formalising their oversight role. The majority of NCBs carry out this function on the basis of their organic laws, without any explicit and detailed legal provisions. Article 105(2) of the Treaty and Article 3.1 of the Statute of the European System of Central Banks and of the European Central Bank provide the legal basis for the Eurosystem’s oversight function, together with Article 22 of the Statute, which reads: ‘The ECB and national central banks may provide facilities, and the ECB may make regulations, to ensure efficient and sound clearing and payment systems within the Community and with other countries’. Within the Eurosystem, oversight activities are performed by NCBs in line with the common oversight policy, as defined by the Governing Council. This will also apply to ČNB once the Czech Republic adopts the euro. In the meanwhile, it should be recognised that payment systems and SSSs are interlinked given the use of the mechanism of “Delivery versus Payment” systems under which settlements of securities and transfers of funds take place simultaneously. There is therefore a strong argument for the model used in some Member States of integrating the oversight of payment and securities settlement systems, and for the NCB to perform this function. Settlement of both legs of such transactions should be subject to similar safeguards to avoid asymmetries with systemic implications. The role of NCBs in SSS oversight is evident given SSSs’ crucial role in the functioning of the financial markets and therefore the need for them to be safe and efficient. The NCBs’ oversight responsibilities in the context of safeguarding the effectiveness of monetary policy and the overall stability of the financial system mean that they must ensure that SSSs are sufficiently protected against the transmission of systemic disruptions.

text: 15. The joint work on SSSs by the Committee on Payment and Settlement Systems (CPSS), which serves as a forum for the central banks of the Group of Ten countries (G10), and the International Organization of Securities Commissions (IOSCO) is recognition at the international level of the interest and role of central banks in the oversight of securities settlement systems. At a Community level this is reflected in the joint work of the ESCB and the Committee of European Securities Regulators (CESR) in establishing common standards for EU SSSs.

text: 16. Finally, it should be ensured that ČNB has the power to gain access to all information and data relevant for the performance of its oversight tasks. The opportunity could therefore be taken to state clearly in the draft law the powers conferred on ČNB and the consequences for SSS operators of not complying with its requests. New administrative offences regime in the ČNB Act

text: 17. As a final point, the draft law introduces a number of new administrative offences punishable by fine and increases the fines imposed for committing certain existing administrative offences. In particular, the draft law makes it an offence punishable by a fine of up to CZK 1 million to fail to withdraw counterfeit currency from circulation. Further, the fine for breaching the ban on unlawfully reproducing monetary symbols or objects imitating money is increased from CZK 5 000 to CZK 500 000. The underlying intention is to transpose the obligation laid down in several Community regulations to make Member States’ sanctions in this area ‘effective, proportionate and deterrent’ . The ECB welcomes the introduction of new administrative offences and the increases in these penalties, which should have a greater deterrent effect on potential offenders.

text: 18. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 15 July 2005. The President of the ECB Jean-Claude TRICHET


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

text: The draft law cross refers to

text: Article 11(1)

text: (f) of Act No 211/2000 Coll. on free access to information and on amendments to certain laws, as amended (Freedom of Information Act). 3 Article 105(4) of the Treaty. 4 Article 4 of the Statute. 5 Article 8 of the draft law.

title: Opinion of the European Central Bank of 3 August 2005 at the request of the Ministry of Justice of the Slovak Republic on a draft law on lobbying and on amendments to certain laws (CON/2005/25)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 3 August 2005 at the request of the Ministry of Justice of the Slovak Republic on a draft law on lobbying and on amendments to certain laws (

text: 1. On 24 June 2005 the European Central Bank (ECB) received a request from the Ministry of Justice of the Slovak Republic for an opinion on a draft law on lobbying and on amendments to certain laws (hereinafter the ‘draft law’).

text: 2. The ECB’s competence to deliver an opinion is based on 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 law contains provisions concerning a national central bank (NCB). 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: 3. The main purpose of the draft law is to establish a legal framework to regulate lobbying as a business activity in the Slovak Republic, thereby ensuring the transparency and accountability of public officials and establishing the areas in which lobbying is and is not permissible. It lays down both the obligations of lobbyists and the obligations and prohibitions to which public officials who are exposed to lobbying are subject. In particular, Article 9(3) of the draft law establishes that certain public officials have to publish their work programme for the previous month before the tenth day of each month. According to Article 9(4) of the draft law, a work programme means a timetable of working meetings at which lobbying contact took place, giving details of the place and date of meetings and of the regulation, document or matter to which the meeting related. Failure to comply with the obligations and prohibitions laid down by the draft law may lead to sanctions including dismissal of the public official concerned.

text: 4. The list of public officials who may be exposed to lobbying contained in Article 2(4) of the draft law includes the Governor of Národná banka Slovenska (NBS) and other members of NBS’s highest governing body, the Bank Board (hereinafter the ‘Bank Board’). The draft law provides that the Governor of NBS, like some other public officials, will be obliged to publish details of their work programme for the previous month on the internet by the tenth day of each month.

text: 5. The ECB therefore considers that the draft law raises concerns as far as the independence of both NBS and its Governor is concerned. Article 108 of the Treaty establishing the European Community and Article 7 of the Statute of the European System of Central Banks and of the European Central Bank establish the principle of institutional independence which prohibits the government of a Member State from seeking to influence the members of the decision-making bodies of the NCBs whose decisions may have an impact on the fulfilment by the NCBs of their tasks relating to the European System of Central Banks (ESCB). Under Slovak law, the principle of institutional independence is enshrined in relation to NBS in Article 56 of the the Constitution of the Slovak Republic No 460/1992 Coll., as last amended and Article 1(1) of the Act No 566/1992 Coll. on Národná banka Slovenska, as last amended (hereinafter the ‘NBS Act’).

text: 6. While the draft law provides for some exclusions to the reporting obligation laid down in

text: Article 9(3)

text: , it cannot be excluded that this obligation covers activities of the Governor of NBS with regard to ESCB-related tasks. The ECB considers that this obligation conflicts with the principle of institutional independence established by the Treaty and the Statute and under Slovak law. Central banking tasks may also require informal dialogue between an NCB and third parties. The reporting obligation laid down in Article 9(3) of the draft law therefore comes close to an ex ante consultation requirement, which could provide the Slovak Government with a mechanism to influence NBS’s decision-making.

text: 7. The ECB also considers that Article 9(3) of the draft law impinges on the personal independence of the Governor of NBS. Article 14.2 of the Statute provides for safeguards against arbitrary dismissal of the Governors of NCBs stating that they may only be dismissed if they no longer fulfil the conditions required for performance of their duties or if they have been guilty of serious misconduct. Under the draft law the Governor of NBS may be dismissed if they fail to comply with the reporting obligation imposed by Article 9(3) of the draft law, even if the requirements of Article 14.2 of the Statute are not fulfilled.

text: 8. The ECB understands that the intention behind the draft law is to make NBS subject to principles of transparency and accountability while preventing conflicts of interest of members of the Bank Board. However, the ECB considers that current Slovak legislation already provides for sufficient safeguards against such conflicts of interest. In particular, Article 7(7) of the NBS Act excludes members of the Bank Board from performing lobbying contact (as defined in Article 2(2) of the draft law) as it amounts to an explicit prohibition on them doing so. Moreover, other provisions of Article 7 of the NBS Act support this view. Article 7(5) of the NBS Act provides that a member of the Bank Board must not prefer his personal interest to the public interest and must abstain from anything which might conflict with the performance of the office of a member of the Bank Board. Furthermore, Article 7(6) of the NBS Act states that membership of the Bank Board is incompatible with occupying any post or performing any activity (be it in the public or private domain, remunerated or unremunerated) which may give rise to a conflict of interest with the duties of a member of the Bank Board. Moreover, issues relating to conflicts of interest of members of the Bank Board are regulated separately under the Constitutional Act No 357/2004 Coll. on protection of public interest in the performance of the office of public functionaries (hereinafter the ‘Constitutional Act’) which contains a definition of public functionaries which covers members of the Bank Board.

text: 9. The ECB takes note that Article 2(3) of the draft law provides for exclusions from the definition of a lobbying contact. These include communication between public officials, public authorities and their employees (

text: Article 2(3)

text: (a)), the raising of comments on a draft regulation or document during comments proceedings and communication in respect of such comments in accordance with provisions governing comments proceedings (

text: Article 2(3)

text: (e)). Moreover, disclosure of information is also excluded if it is contrary to ‘binding legal acts of the European Communities and European Union or an international treaty having binding effect on the Slovak Republic’, referring directly to Article 38 of the Statute .

text: 10. The ECB considers that the wording of

text: Article 2(3)

text: (a) and (e) of the draft law is unclear. First, it is arguable whether under the draft law, communication between public officials and public authorities and their employees also includes communication with Community institutions and their officials, and in particular the ECB and its employees. In this respect, the ECB observes that since NBS became a member of the ESCB on 1 May 2004, the ECB and its employees have communicated regularly with NBS in relation to the performance of the objectives and tasks of the ESCB by the NCBs. Second, the ECB notes that

text: Article 2(3)

text: (e) of the draft law, which excludes comments proceedings from the scope of lobbying contacts, does not clearly refer to the advisory 3 4 functions of the ECB as provided for in the Treaty and in the Statute . According to the latter provisions, which are reiterated in

text: Article 2 of Council Decision 98/415/EC

text: , national authorities must consult the ECB regarding any draft legislative provision in its fields of competence and the ECB may submit an opinion to the relevant national authorities on matters in its fields of competence. The ECB notes that unless its advisory role is explicitly referred to in the draft law in the context of excluding communication in the course of comments proceedings from the scope of lobbying contact, this opinion itself could be regarded as lobbying contact within the meaning of the draft law. The ECB therefore considers that the two exclusions provided for under Article 2(3) of the draft law should be amended to explicitly refer to communication with Community institutions and their officials and to consultations with Community institutions, e.g. to advisory functions performed by the ECB in its fields of competence.

text: 11. As a separate issue, the ECB welcomes the provisions of the draft law prohibiting lobbying in relation to certain matters . In particular, the prohibition on lobbying in relation to decision-making by public authorities when issuing licences, permits, authorisations and other individual legal acts will safeguard the independence of decision-making by NBS, which will perform supervision of the whole financial market in the Slovak Republic from 1 January 2006.

text: 12. In conclusion, the ECB considers that the draft law should be amended to exclude from its scope any member of NBS’s decision-making bodies, at least to the extent that they are performing ESCB-related tasks.

text: 13. The ECB would appreciate it if the Slovak authorities kept it informed of any proposed amendments to the draft law affecting the issues addressed in this opinion.

text: 14. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 3 August 2005. [signed] The President of the ECB Jean-Claude TRICHET