(12)

Article 7 is replaced by the following: ‘Article 7 Non-compliance with reporting requirements 1. Where a participant fails to submit a report or comply with audit requirements, or where errors are identified in the data reported, the following shall apply: (a) if a participant fails to make the first report available to the relevant NCB by the relevant deadline, its borrowing allowance shall be set at zero; (b) if a participant fails to make the results of the auditor's evaluation of the first report available to the relevant NCB by the relevant deadline specified in the indicative calendar for TLTROs-III published on the ECB’s website, the following rules shall apply: (i) if the auditor’s evaluation of the first report is received by the relevant NCB within the period of 14 calendar days starting on the day after the expiry of the relevant deadline, the participant shall incur for each day until such evaluation is received a penalty equal to the total outstanding amount borrowed by the participant under TLTROs-III divided by 1 000 000 (or if that amount is less than EUR 1 000, a penalty of EUR 1 000 for each day until the auditor’s evaluation of the first report is received). The penalties incurred per day shall be accumulated and charged to the participant by the relevant NCB after receipt of the auditor’s evaluation of the first report; (ii) if the auditor’s evaluation of the first report is not received by the relevant NCB within the period of 14 calendar days specified in point (i), the participant shall repay the outstanding amounts borrowed under those TLTROs-III operations with reference to which the borrowing allowance has been calculated on the basis of the first report for which the auditor’s evaluation has not been received. The participant shall repay such amounts on the settlement day of the next main refinancing operation at the average rate on the main refinancing operation over the life of each respective TLTRO-III until the settlement day of the repayment, except during the special interest rate period and the additional special interest rate period, when the average rate on the main refinancing operations over each such period minus 50 basis points shall apply; (c) if a participant in one of the first seven TLTROs-III fails to make the data relating to the second reference period in the second report or the results of the auditor’s evaluation of those data available to the relevant NCB by the relevant deadline specified in the indicative calendar for TLTROs-III published on the ECB’s website, the following rules shall apply: (i) if either the data relating to the second reference period in the second report or the results of the auditor’s evaluation of those data are received by the relevant NCB within the period of 14 calendar days starting on the day after the expiry of the relevant deadline, the participant shall incur for each day until receipt a penalty equal to the total outstanding amount borrowed by the participant under TLTROs-III divided by 1 000 000 (or if that amount is less than EUR 1 000, a penalty of EUR 1 000 for each day until receipt). The penalties incurred per day shall be accumulated and charged to the participant by the relevant NCB after receipt of all data relating to the second reference period in the second report or of the results of the auditor’s evaluation of those data. The interest rate related data relating to the second reference period shall be communicated by the relevant NCB to the participant on 1 October 2021; (ii) if either the data relating to the second reference period in the second report or the results of the auditor’s evaluation of those data are not received by the relevant NCB within the period of 14 calendar days specified in point (i), the average rate on the main refinancing operation over the life of each respective TLTRO-III shall apply to the amounts borrowed by that participant under TLTROs-III, except during the special interest rate period and the additional special interest rate period, when the average rate on the main refinancing operations over each such period minus 50 basis points shall apply unless the participant is granted a better rate as a result of its lending performance during the third reference period. If it is the data relating to the second reference period in the second report that are not received by the relevant NCB within the period of 14 calendar days specified in point (i), the participant shall also incur a penalty of EUR 5 000 which shall be charged to the participant by the relevant NCB after receipt of all data relating to the second reference period in the second report. Notwithstanding the previous paragraph of this point (ii), if the participant only provides the data for the special reference period of the second report and the auditor’s evaluation of this data, and the participant’s eligible net lending during the special reference period equals or exceeds its benchmark net lending, the interest rate applicable to the amounts borrowed by the participant shall be calculated pursuant to Article 5(1) or Article 5(3a) subject to the conditions set out in Article 6(3a) and Article 6(3b) respectively; (d) if a participant in one of the first seven TLTROs-III fails to make the data relating to the special reference period in the second report or the results of the auditor's evaluation of those data available to the relevant NCB by the relevant deadline specified in the indicative calendar for TLTROs-III published on the ECB’s website, the following rules shall apply: (i) if either the data relating to the special reference period in the second report or the results of the auditor’s evaluation of those data are received by the relevant NCB within the period of 14 calendar days starting on the day after the expiry of the relevant deadline, the participant shall incur for each day until receipt a penalty equal to the total outstanding amount borrowed by the participant under TLTROs-III divided by 1 000 000 (or if that amount is less than EUR 1 000, a penalty of EUR 1 000 for each day until receipt). The penalties incurred per day shall be accumulated and charged to the participant by the relevant NCB after receipt of all data relating to the special reference period in the second report or of the results of the auditor’s evaluation of those data. The interest rate related data relating to the second reference period shall be communicated by the relevant NCB to the participant on 1 October 2021; (ii) if either the data relating to the special reference period in the second report or the results of the auditor’s evaluation of those data are not received by the relevant NCB within the period of 14 calendar days specified in point (i), the participant’s eligible net lending during the special reference period shall be considered lower than its benchmark net lending and the participant may not take advantage of the interest rate set out in Article 5(1); (e) if the pecuniary penalty pursuant to point (c)(i) is charged by the relevant NCB, the pecuniary penalty pursuant to point (d)(i) shall not be charged. Similarly, if the pecuniary penalty pursuant to point (d)(i) is charged by the relevant NCB, the pecuniary penalty pursuant to point (c)(i) shall not be charged; (f) if a participant fails to make the data relating to the third report or the results of the auditor’s evaluation of the data relating to the third report available to the relevant NCB by the relevant deadline specified in the indicative calendar for TLTROs-III published on the ECB’s website, the following rules shall apply: (i) if either the data relating to the third report or the results of the auditor’s evaluation of those data are received by the relevant NCB within the period of 14 calendar days starting on the day after the expiry of the relevant deadline, the participant shall incur for each day until receipt a penalty equal to the total outstanding amount borrowed by the participant under TLTROs-III divided by 1 000 000 (or if that amount is less than EUR 1 000, a penalty of EUR 1 000 for each day until receipt). The penalties incurred per day shall be accumulated and charged to the participant by the relevant NCB after receipt of all data relating to the third report or of the auditor’s evaluation of those data. The interest rate related data relating to the second reference period shall be communicated by the relevant NCB to the participant on 1 July 2022; (ii) if either the data relating to the third report or the results of the auditor’s evaluation of those data are not received by the relevant NCB within the period of 14 calendar days specified in point (i), the interest rate calculated pursuant to Article 5(1)(b), 5(2)(b) or 5(3)(b) (if the participant has already participated in one of the first seven TLTROs-III), or pursuant to Article 5(3c)(a) (if the participant participated in the eighth or subsequent TLTROs-III), shall apply during the additional special interest rate period to the amounts borrowed by that participant under those TLTROs-III, while during the period after the additional special interest rate period, the rate shall be calculated pursuant to Articles 5(1)(c), 5(2)(c), 5(3)(c) or 5(3c)(b). If it is the data relating to the third report that are not received by the relevant NCB within the period of 14 calendar days specified in point (i), the participant shall also incur a penalty of EUR 5 000, which shall be charged to the participant by the relevant NCB after receipt of all data relating to the third report; (g) if a participant fails to otherwise comply with the obligations set out in Article 6(6), (7) or (8a), the average rate on the main refinancing operations over the life of each respective TLTRO-III shall apply to the amounts borrowed by that participant under TLTROs-III, except during the special interest rate period and the additional special interest rate period when the average rate on the main refinancing operations minus 50 basis points over each such period shall apply; (h) if a participant, either in connection with the audit referred to in Article 6(6) and 6(8a) or by any other means, identifies errors in the data submitted in the reports, including inaccuracies or incompleteness, it shall notify the relevant NCB thereof within the shortest timeframe possible. Where the relevant NCB has been notified of such errors, inaccuracies or omissions, or where such errors, inaccuracies or omissions come to its attention by other means: (i) the participant shall provide any additional information requested by the relevant NCB within the shortest timeframe possible to assist in assessing the impact of the errors, inaccuracies or omissions concerned; and (ii) the relevant NCB may take appropriate action, which may include a recalculation of the relevant values that in turn may affect the interest rate applied to the participant's borrowing under TLTROs-III and a requirement to repay the amounts borrowed which, due to the error, inaccuracy or omission exceed the participant's borrowing allowance. Participants shall demonstrate that any shortcomings identified by the audit referred to in Articles 6(6) and 6(8a) have been addressed in the data reported to NCBs in accordance with the timeframe requested by the relevant NCB and, where shortcomings are identified by the auditor’s evaluation of the second report or the third report, by a deadline which allows for the timely communication of interest rate related data by the relevant NCB based on the respective data in accordance with the indicative calendar on the ECB’s website. 2. Paragraph 1 shall be without prejudice to any sanction that may be imposed pursuant to Decision ECB/2010/10 of the European Central Bank (*1) in respect of the reporting obligations laid down in Regulation (EU) No 1071/2013 (ECB/2013/33). 3. For the avoidance of doubt, the reporting requirements and related sanctions in case of non-compliance laid down in paragraph 1 shall only apply if the participant participates in TLTROs-III. (*1) Decision ECB/2010/10 of the European Central Bank of 19 August 2010 on non-compliance with statistical reporting requirements (OJ L 226, 28.8.2010, p. 48).’;"