EN
OPINION OF THE EUROPEAN CENTRAL BANK
of 24 January 2002
at the request of the Netherlands Ministry of Finance
on a draft act amending the 1977 Sanctions Act
(CON/2002/5)
1. On 4 January 2002 the European Central Bank (ECB) received a request from the Netherlands
Ministry of Finance for an opinion on a draft act amending the 1977 Sanctions Act (hereinafterreferred to as the draft act).
2. The ECBs competence to deliver an opinion is based on Article 105(4) of the Treaty establishing
the European Community (hereinafter referred to as the "Treaty") and the third and sixth indents ofArticle 2(1) of Council Decision 98/415/EC of 29 June 1998 on the consultation of the EuropeanCentral Bank by national authorities regarding draft legislative provisions
1, as the draft act contains
provisions concerning a national central bank. Furthermore, the draft act may have an influence onthe stability of financial institutions and mark ets. In accordance with the first sentence of
Article 17.5 of the Rules of Procedure of the Europe an Central Bank, this opinion has been adopted
by the Governing Council of the ECB.  
3. The objectives of the draft act are to amend the 1977 Sanctions Act with a view to the
implementation of treaties, international decisions, recommendations and agreements aiming tofight terrorism and to extending the powers of supervision of compliance with financial sanctions.The new regime creates a framework for the sanctioning of persons as well as countries and aspecific supervisory regime to oversee the compliance by financial institutions with such financialsanctions. The draft act does not aim to implement specific international or EU legislation, but toprovide a basis for more efficient implementation of sanctions in the future. In order to achieve thisgoal, the scope of application and the supervision instruments provided for in the Sanctions Act areto be updated. The existing supervisory structures will be broadened by ministerial decree toinclude the supervision of compliance with new financial sanctions. 
4. The ECB would like to recall the commitment of the Eurosystem to contribute to the adoption,
implementation and execution of measures against the use of the financial system for terrorist
                                                     
1 OJ L 189, 3.7.1998, p. 42.
2activities, as expressed in the Governing Council's public statement of 1 October 2001. In order to
ensure that public trust in the integrity of the financial system is fully preserved, it is of the utmostimportance that financial systems do not work to the benefit of persons and organisationsassociated with terrorist activities. While re cognising that the compliance with sanctions by
financial institutions may in some situations involve practical difficulties, the ECB considers thatgood cooperation between financial institutions and national authorities will ensure theeffectiveness of financial sanctions. Against this background, the ECB welcomes the objectives ofthe draft act of combatting the financing of terrorism more efficiently, whether individuals,organisations or governments are responsible for this, and of supervising appropriately thecompliance by financial institutions with sanctions regimes.
5. The ECB notes that the measures proposed are not incompatible with the existing framework for
supervision. Article 1(F) of the draft act proposes that a new Article 10 be added to the 1977Sanctions Act that will refer to the person re sponsible for supervising compliance with its
provisions, depending on the type of institution that must comply with sanctions regulations. Thisis done by direct reference to the 1992 Act on the Supervision of the Credit System, which formsthe basis for the supervision of credit institutions in the Netherlands and places the responsibilityfor such supervision with De Nederlandsche Bank. It is also noted that supervision of investmentinstitutions falls outside the scope of competence of De Nederlandsche Bank, falling as it doeswithin the responsibilities of the Securities Board of the Netherlands. The Covenant that hasrecently been signed by these two supervisory bod ies ensures that the supervision of the financial
sector as a whole will be effective
2. 
6. The ECB confirms that it has no objection to  the competent national authorities making this
opinion publicly available at their discretion.
Done at Frankfurt am Main on 24 January 2002.
The President of the ECB
[signed]
Willem F. DUISENBERG
                                                     
2 Covenant between the Securities Board of the Netherlands and De Nederlandsche Bank on the coordination of
supervision, Amsterdam, 22 October 2001.