No C 42/4 Official Journal of the European Communities 14.2.85 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Regulation concerning the application of Decision No .. ./85 of 
the ACP-EEC Council of Ministers on transitional measures to be applied until the entry 
into force of the third Lome Convention 
COM(85) 7final 
(Submitted by the Commission to the Council on 18 January 1985) 
(85/C 42/05) 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES, 
Having regard to the Treaty establishing the 
European Economic Community, and in particular 
Article 238 thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European Par­
liament, 
Whereas the ACP—EEC Convention signed at Lome 
on 31 October 1979 (') expires on 28 February 1985; 
Whereas the third ACP—EEC Convention signed at 
Lome on 8 December 1984 cannot enter into force on 
the same date; 
Whereas the Committee of Ambassadors established 
by the second ACP—EEC Convention af Lome has 
adopted, under the powers delegated to it by 
Decision No 7/84 of the ACP-EEC Council of 
Ministers of 19 December 1984 and by virtue 
O OJ No L 347, 22. 12. 1980, p. 2. 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES, 
Having regard to the Treaty establishing the 
European Economic Community, and in particular 
Articles 57 (2) and 66 thereof, of Article 188 (3) of the said Convention, the 
transitional measures to be applied from 1 March 
1985 until the entry into force of the third ACP-EEC 
Convention; 
Whereas the measures required to implement that 
Decision should be taken, 
HAS ADOPTED THIS REGULATION: 
Article 1 
Decision No .. ./85 of the ACP-EEC Council of 
Ministers annexed to this Regulation shall apply in 
the Community with effect from 1 March 1985 until 
28 February 1986 at the latest, without prejudice to 
the more favourable unilateral provisions which the 
Community will be adopting in respect of imports af 
ACP products. 
Article 2 
This Regulation shall enter into force on 1 March 
1985. 
It shall be binding in its entirety and directly 
applicable in all Member States. 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European Par­
liament, 
Having regard to the opinion of the Economic and 
Social Committee, Proposal for a Council Directive on the freedom of establishment and the free supply of 
services in the field of mortgage credit 
COM(84) 730final 
(Submitted by the Commission to the Council on 4 February 1985) 
(85/C 42/06) 
14. 2. 85 Official Journal of the European Communities No C 42/5 
Whereas, pursuant to the Treaty, any discriminatory 
or restrictive treatment with regard to establishment 
and to the provision of services, based either on 
nationality or on the fact that an undertaking is not 
established in the Member States where the services 
are provided, is prohibited from the end of the 
transitional period; 
Whereas, pursuant to the Treaty, with reference to 
Articles 52 and 59, the prohibition of any restrictive 
treatment with regard to freedom of establishment 
and the freedom to supply services means that all 
undertakings have the right to establish themselves 
and to provide services on the whole territory of the 
Community; 
Whereas, in order to facilitate the effective exercise of 
such freedom in the field of credit institutions, the 
Council adopted Directive 77/780/EEC of 12 
December 1977 on the coordination of laws, regu­
lations and administrative provisions relating to the 
taking up and pursuit of the business of credit 
institutions (x) which has secured a first approx­
imation of the laws of the Member States as regards 
the rules to which these institutions are subject; 
Whereas, however, there are still obstacles standing in 
the way of the exercise of freedom of establishment 
and freedom to supply services by credit institutions 
operating mortgage credit; 
Whereas, these obstacles arise, on the one hand, from 
the prohibition on the granting of credit on mortgage 
on real property situated in another Member State 
and, on the other hand, from the differences in 
conditions under which such credit institutions in the 
various Member States are allowed to undertake 
mortgage credit activity; 
Whereas the elimination of such obstacles can be 
achieved by making it possible to grant mortgage 
credit secured on real property situated in a Member 
State other than the home Member State and by 
making it possible to operate mortgage credit in a 
host Member State in accordance with the specific 
lending and funding techniques authorized in the 
home Member State; 
Whereas, the implementing of such a possibility 
implies the adoption of the principle, by the 
supervisory authorities, of the mutual recognition of 
the supervisory regulations which monitor the 
financial soundness of the relevant mortgage credit 
institutions; 
O OJ No L 322, 17. 12. 1977, p. 30. Whereas, in order to ensure that the introduction of a 
new funding or lending technique on the market for 
mortgage credit in a Member State does not give rise 
to a distortion of the conditions of competition, that 
Member State must in such situations allow credit 
institutions working in the same field in its territory, 
in whatever form they are established, to operate 
mortgage credit under similar conditions; 
Whereas, pending the achievement of complete 
freedom of capital movements, Member States may 
require matching between assets and liabilities of the 
currencies related to mortgage credit operations; 
whereas they must at all events allow the possibility of 
conducting such operations in ECU; 
Whereas, at all events, the effective exercise of the 
activities mentioned in the Directive requires the 
removal of some of the existing restrictions on capital 
movements; whereas a specific directive will deal with 
such restrictions; 
Whereas, any type of State intervention or other 
public assistance related to the granting of mortgage 
credit must be granted in a non-discriminatory way, 
so as to be equally applicable to transactions 
undertaken within the framework of this Directive; 
Whereas, pending further coordination of the 
supervisory regulations, branches of mortgage credit 
institutions having their head office in another 
Member State will be supervised by the competent 
authorities of the host country in close cooperation 
with the competent authorities of the home country; 
Whereas, however, with respect to the supply of 
cross-border services and in accordance with the 
principle of home country control, the supervision of 
those credit institutions will be entrusted to the 
supervisory authority of the home country; whereas 
the institution providing services must comply with 
the legal provisions in force in the host country which 
are justified on the grounds of the general good; 
Whereas, the surveillance of such provisions must rest 
with the supervisory authority of the host country, 
which requires close cooperation between that 
authority and the competent authority of the home 
country for comprehensive supervision of the relevant 
transactions; 
Whereas, taking into account the fact that the 
supervisory authorities do not have sufficient 
experience with regard to surveillance of transactions 
conducted abroad by mortgage credit institutions, it is 
appropriate, for a transitional period, to allow them 
to limit the volume of such transactions, 
No C 42/6 Official Journal of the European Communities 14.2.85 
HAS ADOPTED THIS DIRECTIVE: Article 5 
TITLE I 
Definitions and scope 
Article 1 
This Directive applies to the credit institutions falling 
within the ambit of Directive 77/780/EEC, the 
activities of which consist in receiving funds from the 
public collected in the form of deposits or the 
proceeds from mortgage bonds or reimbursable shares 
and in granting loans to the public secured by 
mortgage on real property for the purpose of 
acquiring or retaining property rights in building land 
or in existing or projected buildings or for renovating 
or improving buildings. 
Article 2 
For the purposes of this Directive: 
— 'home Member State' shall mean the Member 
State where a credit institution as referred to in 
Article 1 has its head office; 
— 'host Member State' shall mean the Member State 
where a credit institution as referred to in Article 1 
has a branch or into which it supplies services. 
TITLE II 
General provisions to facilitate exercise of the right of 
establishment and the right to supply services 
Article 3 
Member States shall authorize credit institutions as 
referred to in Article 1 to grant mortgage credit 
secured by mortgages on real property situated in 
another Member State. 
Article 4 
Member States shall repeal all legal or administrative 
provisions preventing or obstructing a credit 
institution, as referred to in Article 1, having its head 
office in their territory, from operating mortgage 
credit in another Member State in accordance with 
techniques specifically authorized within its home 
Member State, or shall so amend such provisions as 
to make the operation of such techniques possible. 1. Each Member State shall allow within its 
territory a credit institution, as referred to in Article 1, 
having its head office in another Member State, to 
fund and, in particular, refinance itself subject to the 
provisions of paragraph 2, according to the 
techniques of financing which are authorized in its 
home Member State, in order to grant loans secured 
by mortgage for the purposes referred to in Article 1. 
Where the introduction of such new techniques in a 
Member State gives rise to distortion of the 
conditions of competition in that Member State, that 
Member State shall authorize all credit institutions 
established in its territory to adopt similar techniques 
or take equivalent measures. 
2. Pending further coordination relating to bonds 
secured by mortgage, the host Member State may 
require that issues of such bonds in its territory shall 
be in conformity with the relevant provisions in force 
in that Member State. 
Article 6 
The host Member State may require that both 
funding and lending transactions be in its currency; 
the institution in question may however always use 
the ECU as an" alternative. The home Member State 
may require matching between assets and liabilities in 
each national currency; the institution in question 
may however always choose to meet the matching 
requirement in ECU. 
Article 7 
In cases of State intervention or other public 
assistance of any type in the field of mortgage credit 
related activities, including the saving of funds with 
and the granting of mortgage credits by credit 
institutions as referred to in Article 1, similar 
measures shall apply to transactions undertaken 
within the scope of this Directive. Such measures shall 
be non-discriminatory as between nationals of 
Member States. 
TITLE III 
Provisions relating to the freedom of establishment 
Article 8 
Until the conditions for home country control are 
fulfilled, supervision of any form of establishment in 
another Member State of a credit institution, as 
referred to in Article 1, shall be exercised by the 
supervisory authority of that host Member State in 
close cooperation with the supervisory authority of 
the home Member State. 
14. 2. 85 Official Journal of the European Communities No C 42/7 
TITLE IV 
Provisions relating to freedom to supply services 
Article 9 
1. A credit institution, as referred to in Article 1, 
wishing to extend its activities by way of the exercise 
of freedom to supply services in the field of mortgage 
credit into the territory of another Member State, 
shall give notification thereof to the supervisory 
authority of the home Member State which has 
granted the authorization pursuant to Article 3 of 
Directive 77/780/EEC. 
2. Member States shall require the notification to 
be accompanied by the following information from 
the credit institution concerned: 
(a) the Member State into whose territory it intends 
to supply services; 
(b) the types of business it intends to carry out on the 
territory of that host Member State; 
(c) the general and specific conditions under which 
funds will be received and loans granted. 
3. Where the supervisory authority of the home 
Member State confirms the financial soundness of the 
credit institution concerned, it shall, within three 
months of the notification referred to in paragraph 1, 
send the information mentioned in paragraph 2 to the 
supervisory authority of the host country, together 
with a declaration assessing the financial situation of 
the credit institution. 
4. Where the supervisory authority of the home 
Member State refuses to confirm the financial 
soundness of a credit institution, reasons shall be 
given to the institution concerned within three 
months of receipt of the information mentioned in 
paragraph 2. 
5. Before the credit institution commences its 
activities the supervisory authority of the host country 
shall, within a period of three months following 
receipt of the information and of the declaration 
mentioned in paragraph 3, prepare for the constant 
supervision of the credit institution pursuant to 
Article 10. 
Article 10 
1. A credit institution exercising freedom to supply 
services into the territory of another Member State 
shall report quarterly on its operations in the host 
Member State to the supervisory authority of that 
Member State. 2. If the supervisory authority of a host Member 
State ascertains that an institution providing services 
into its territory is not complying with the legal 
provisions in force in that Member State which are 
justified on the grounds of the general good, that 
authority shall request the institution concerned to 
put an end to the irregular situation. 
3. If the institution concerned fails to take the 
necessary steps, the supervisory authority of the host 
Member State shall inform the supervisory authority 
of the home Member State accordingly. The 
authority of the home Member State shall take all 
appropriate measures to ensure that the institution 
concerned puts an end to the irregular situation. The 
nature of those measures shall be communicated to 
the authority of the host Member State. 
4. If, despite the measures taken by the home 
Member State pursuant to paragraph 3, or because 
such measures prove inadequate or are lacking in the 
Member State in question, the institution persists in 
violating the legal rules referred to in paragraph 2 in 
force in the host Member State, the latter State may, 
after informing the supervisory authority of the home 
Member State, take appropriate measures to prevent 
further irregularities, including, in so far as it is 
strictly necessary, the prevention of the further 
conclusion of mortgage contracts by that institution 
by way of provision of services within its territory. 
The Member States shall ensure that within their 
territory it is possible to serve the legal documents 
necessary for these measures. 
5. Any measure adopted pursuant to paragraphs 2, 
3 and 4 involving penalties or restrictions on the 
provision of services must be properly justitified and 
communicated to the institution concerned. Every 
such measure shall be subject to the right to apply to 
the courts in the Member State in which the auth­
orities adopted it. 
6. In the event of withdrawal of authorization the 
supervisory authority of the host Member State shall 
be informed of such action and shall take appropriate 
measures to prevent the institution concerned from 
continuing to conclude mortgage contracts by way of 
provision of services within the territory of that State. 
7. Every two years the Commission shall submit to 
the Council a report summarizing the number and 
type of cases in which, in each Member State, 
decisions recording non-confirmation of financial 
soundness have been communicated under Article 9 
or measures have been taken in accordance with the 
provisions of paragraph 4. Member States shall 
cooperate with the Commission by providing it with 
the information required for this report. 
No C 42/8 Official Journal of the European Communities 14.2.85 
TITLE V Article 12 
Transitional and final provisions 
Article 11 
The home Member State may, for a maximum period 
of five years after notification of this Directive limit 
the transactions of a credit institution in the field of 
mortgage credit carried on either through branches in 
other Member States or by way of the provision of 
services to 25 % of the total mortgage lending of the 
relevant credit institution. 1. Member States shall bring into force the 
measures necessary to comply with this Directive by 
. . .. They shall forthwith inform the Commission 
thereof. 
2. Member States shall communicate to the 
Commission the texts of the main laws, regulations 
and administrative provisions which they adopt in the 
field covered by this Directive. 
Article 13 
This Directive is addressed to the Member States.