EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 14 February  2018   
on conferring new tasks relating to interchange fees for card -based payment transactions  
to the Central Bank of Cyprus  
(CON/20 18/10) 
 
Introduction and legal basis  
On 15 January 2018 the European Central Bank (ECB) received a request from the Ministry of Finance of 
the Republic of Cyprus for an opinion on a draft law on interchange fees for card- based payment 
transactions (hereinafter the ‘draft law’ ). 
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third indent  of Article  2(1) of Council Decision 98/415/EC1, as 
the draft law  relates to the Central Bank of Cyprus (CBC) . In accordance with the first sentenc e of 
Article  17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted 
this opinion.  
 
1. Purpose of the draft law  
1.1 The purpose of the draft law is to effectively implement Articles 3(2), 13, 14 and 15 of Regulation 
(EU) 2015/7512 into the Cypriot  legal order by designating the CBC  and the Commission for  the 
Protection of Competition of the Republic of Cyprus (hereinafter the ‘Competition Commission’) as 
the competent authorities for the purposes of  Regulation (EU) 2015/751 . According to the draft law, 
the two authorities will be jointly responsible to ensure the enforcement of the provisions of  
Regulation (EU) 2015/751 and of the draft law, except where responsibility is expressly assigned 
otherwise.   
1.2 In relation to the enfor cement of Articles 3 , 4, 5 and 7 of Regulation (EU) 2015/751, which govern 
the interchange fee caps that should be imposed by payment service providers in consumer credit 
and debit card transactions, and the requirement to keep payment card schemes  separat e from 
processing entities, the CBC is required to set up and manage a procedure for the regular 
collection of information and records from all payment services providers and, where appropriate, 
from all card payment schemes . In addition, where the CBC considers, in the light of the 
information and records that it may receive from any payment service provider or card payment 
                                                 
1  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft  legislative provisions ( OJ L 189, 3.7.1998, p. 42) . 
2  Regulation (EU) 2015/751 of the European Parliament and of the Council of 29 April 2015 on interchange fees for 
card- based payment transactions (OJ L 123, 19.5.2015, p. 1 ). 
ECB -PUBLIC  
2 scheme, that competition issues arise, it is required to transmit the relevant information to the 
Competition Commission which may fur ther investigate the matter and proceed with enforcement 
and administrative sanctions and/or measures.   
1.3 The Competition Commission is designated as the exclusive competent authority for the 
enforcement of Articles 6, 8, 9, 10, 11 and 12 of the Regulation (EU) 2015/751 and the Financial 
Ombudsman of the Republic of Cyprus is entrusted with responsibility for out -of-court resolution of 
disputes that may arise under Regulation (EU) 2015/751.  
1.4 Furthermore, f or the purposes of enforcing Regulation (EU) 2015/751,  and in particular Article 13 
which requires competent authorities to effectively monitor compliance with Regulation 
(EU) 2015/751, both authorities  are vested with a number of power s, including  the power to collect 
information, documents  and records  from a ny supervised entity , to carry out on- site investigations  
and to cooperate with the competent authorities of other Member States.  In line with Article 14 of 
Regulation (EU) 2015/751, the competent authorities are also empowered to impose administrative 
sanctions in cases  of infringement of the provisions of the draft law and/or Regulation 
(EU) 2015/751, and to take any necessary measures  in order  to ensure the enforcement of the 
draft law and Regulation (EU) 2015/751.  Any decision to impos e an administrativ e sanction or to 
take other measures  in the case of an infringement should be published by each competent 
authority on its website. The draft law further enables the competent authorities to determine the 
fees for the performance of their duties and to iss ue any relevant directives and guidelines.  
1.5 As far as cooperation between the two authorities is concerned,  notwithstanding the more detailed 
provisions as  regards enforcement of Articles 3, 4,  5 and 7 of Regulation (EU) 2015/751  as 
described in paragraph 1.2 above,  the draft law provides that the competent authorities  will enter 
into a memorandum of cooperation and will take all necessary measures to regulate cooperation 
between them . The draft law also grants the competent authorities the right to exchang e 
information with each other for the purposes of the draft law .  
1.6 Finally, the draft law limit s the liability of the competent authorities and their employees, including, 
in addition to the CBC,  the Governor of the CBC, the board of directors of the CBC an d any person 
who is an advisor or officer of the CBC, in relation to an action, application or other legal 
proceedings for damages for  any act or omission that took place during the performance of their 
duties and the exercise of their powers pursuant to t he draft law and/or Regulation (EU) 2015/751, 
except where the act or omission was not committed in good faith or was the result of gross 
negligence.  
 
2. General observations  
2.1 In this opinion,  the ECB will only assess those provisions of the draft law that may impact on the 
role and tasks of the CBC as a national central bank  (NCB) , national supervisory authority , member 
of the Eurosystem and the European System of Central Banks (ESCB). Consequently, this opinion 
will not address the question of whether the draft law, if adopted as proposed, would represent an 
effective means of implementing Regulation (EU) 2015/751 in Cyprus.  
ECB -PUBLIC  
3 2.2 The ECB understands that the draft law does not intend to confer competition- related tasks on the 
CBC as these tasks are intended to be conferred on the Competition Commission. The ECB 
welcomes this, and invites the Ministry of Finance , for the avoidance of doubt, to make it explicitly 
clear that the CBC has not been conferred competition -related tasks  under the draft law . 
 
3. New tasks of the CBC  
3.1 The draft law expands the current supervisory functions  of the CBC , by granting it the responsibility 
of supervising interchange fees in respect of payment service providers and payment card 
schemes and other technical and business requirements relating to card -based payment 
transactions. It should be noted that the CBC is already the competent authority for supervising 
payment service providers  pursuant to Law 128(I)/2009 on payment services3. It should also be 
noted that the CBC  has been granted responsibility for  tasks related to consumer  protection, as it 
has been designated as the competent authority responsible for the application and enforcement of 
the rules implementing Directive 2014/92/EU4, and as one of the competent authorities , together 
with the Consumer Protection Service of the Republic of Cyprus, responsible for the application 
and enforcement of the rules implementing Directive 2014/17/EU5. However, t he tasks attributed to 
the CBC under the draft law  appear to go beyond the scop e of its  current tasks. Thus, the conferral 
upon the CBC under the draft law of the power to monitor and ensure compliance of payment 
service providers, payment card schemes and payees with their obligations under Regulation 
(EU) 2015/751, and to impose administrative sanctions in cases  of infringement , are considered to 
be new tasks of the CBC.  
3.2 The ECB underlines that a proposed conferral of tasks on an  NCB  in the ESCB must be assessed 
against the prohibition on monetary financing under Article 123 of the Treaty. For the purposes of 
that prohibition, Article 1(1)(b)(ii) of Council Regulation (EC) No 3603/936 defines ‘other type of 
credit facility’, inter alia, as ‘any financing of the public sector’s obligations vis -à-vis third parties’.  
Ensuring that Member States implement a sound budgetary policy is one of the key objectives of 
the monetary financing prohibition, which may not be circumvented7. Therefore, the task of 
financing measures, which are normally the responsibility of the Member States, and whic h are 
financed from their budgetary sources rather than by the NCBs, must not be entrusted to NCBs. To 
decide what constitutes financing of the public sector’s obligations vis -à-vis third parties, which can 
be translated as the provision of central bank fi nancing outside the scope of central bank tasks, it is 
necessary to carry out, on a case- by-case basis, an assessment of whether the task to be 
                                                 
3   Ο περί Υπηρεσιών Πληρωμ ών Νόμος του 2009 (Ν. 128(I)/2009).  
4  Directive 2014/92/EU of the European Parliament and of the Council of 23 July 2014 on the comparability of fees 
related to payment accounts, payment account switching and access to payment accounts with basic feat ures (OJ 
L 257, 28.8.2014, p. 214).  
5  Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for 
consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and 
Regulation (EU) No 1093/2010 (OJ L 60, 28.2.2014, p. 34).  
6  Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the 
prohibitions referred to in Articles 104 and 104b(1) of the Treaty (OJ L 332, 31.12.1993, p. 1).  
7  Article 123 of the Treaty also serves the objective of maintaining price stability and reinforces central bank 
independence.  
ECB -PUBLIC  
4 undertaken by an NCB is a central bank task or a government task, i.e. a task within the 
responsibility of the Member States. In other words, adequate safeguards must be in place to 
ensure that circumventions of the objective of the monetary financing prohibition of maintaining a 
sound budgetary policy of Member States do not take place.  
3.3 As part of its discretion in  the exercise of its duty, on the basis of Article 271(d) of the Treaty and 
Article 35.6 of the Statute of the European System of Central Banks and of the European Central 
Bank (hereinafter the ‘Statute of the ESCB’), to ensure that NCBs honour the obligat ions laid down 
by the Treaty, the Governing Council has endorsed safeguards of that kind in the form of criteria for 
determining what may be seen as falling within the scope of a public sector’s obligation within the 
meaning of Article 1(1)(b)(ii) of Regul ation (EC) No 3603/93 or, in other words, what constitutes a 
government task as follows:  
First, central bank tasks are in particular those tasks that are related to the tasks that have been 
conferred upon the ECB and the NCBs by the Treaty and the Statute of the ESCB. These tasks are 
mainly defined in Article 127(2), (5) and (6) and Article 128(1) of the Treaty, as well as Article 22 
and Article 25.1 of the Statute of the ESCB.  
Second, as Article 14.4 of the Statute of the ESCB allows NCBs to perform ‘other functions’, new 
tasks, i.e. tasks that are not related to tasks that have been conferred upon the ECB and the NCBs, 
are not precluded per se. However, new tasks that are undertaken by an NCB and which are 
atypical of NCB tasks or which are clearly discharged on behalf of and in the exclusive interest of 
the government or of other public sector entities should be considered government tasks.  
Third, an important criterion for qualifying a new task as atypical of an NCB task or as being clearly 
discharged on behalf of and in the exclusive interest of the government or other public sector 
entities is the impact of the task on the institutional, financial and personal independence of that 
NCB.  
In particular, the following aspects should be taken into account :  
(a) whether the performance of the new task creates conflicts of interest with existing central 
bank tasks which are not adequately addressed and does not necessarily complement those 
existing central bank tasks. If a conflict of interest arises between exi sting and new tasks, 
sufficient safeguards to mitigate that conflict should be in place. The complementarity 
between a new task and the existing central bank tasks should not be interpreted broadly, so 
as to lead to the creation of an indefinite chain of ancillary tasks. Such complementarity 
should be examined also in relation to the financing of those tasks;  
(b) whether without new financial resources the performance of the new task is disproportionate 
to the NCB’s financial or organisational capacity and may have a negative impact on the 
capacity to perform properly the existing central bank tasks;  
(c) whether the performance of the new task fits into the institutional set -up of the NCB in the 
light of central bank independence and accountability considerations;  
(d) whether the performance of the new task harbours substantial financial risks;  
(e) whether the performance of the new task exposes the members of the NCB decision- making 
bodies to political risks which are disproportionate and may also have an impact on their 
ECB -PUBLIC  
5 personal independence and, in particular, on the guarantee of term of office set out in 
Article  14.2 of the Statute of the ESCB.  
3.4 On the basis of the criteria set out above, the following paragraphs assess whether the new tasks 
of the CBC  are in line with the monetary financing prohibition.  
3.4.1  Tasks related to the tasks conferred upon the ECB and the NCBs by the Treaty and the Statute of 
the ESCB  
The tasks conferred on the CBC in relation to ensuring enforcement of interchange fee caps 
between the issuing and the acquiring banks of card- based payment instruments as well as 
compliance with the requirements of Regulation (EU) 2015/751  by payment service providers, card 
payment schemes and payees , are not among the central banking tasks listed in Article 127(2) and 
(5) of the Treaty , or otherwise conferred upon the NCBs by the Statute of the ESCB . Furthermore , 
these tasks appear to go beyond the scope of the CBC’s existing tasks as supervisory authority of 
payment service providers .  
At the same time,  the new tasks, n otwithstanding their consumer protection  dimension,  are similar 
to CBC’s  existing tasks  and appear to  complement them given that the CBC is already responsible 
for authorising, supervising and withdrawing the authorisation of payment institutions providing 
payment services8, with the ultimate objective of safeguarding the smooth and efficient functioning 
of the payment systems.  In this sense, CBC’s  new tasks can be regarded as related to the task 
conferred upon the ESCB in the fourth indent of Article 127( 2) of the Treaty, as well as in the fourth 
indent of Article 3.1 of the Statute, based on the understanding that these tasks are ancillary to the 
promotion of the smooth operation of payment systems9. In addition, the consumer protection 
objectives of Regulation (EU) 2015/751 are closely interrelated with the objective of safeguarding 
the smooth functioning of payment systems. Taking this into account , the tasks to be conferred on 
the CBC  can be seen as  ultimately reinforc ing the smooth operation of payment  systems.   
3.4.2  Tasks which are atypical of NCB tasks  
Regulation (EU) 2015/751  grants Member States a wide discretionary power in determining the 
competent authorities which are responsible for monitoring compliance with its provisions, provided 
that the designated authorities have adequate resources for the performance of the duties 
assigned to them. A number of Member States10 have already designated their NCBs as the sole 
competent authorities to ensure compliance with the provisions of Regulation (EU) 2015/75 1, while 
                                                 
8    Pursuant to Law 128(I)/2009 on payment services. See also paragraph 1.1 of Opinion CON/2009/36.  Under Law  
128(I)/2009 o n payment services , the CBC is also responsible for supervising the compliance of credit institutions 
and other payment service providers with the conduct of business rules under  Directive (EU) 2015/2366 of the 
European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending 
Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 
2007/64/EC (OJ L 337, 23.12.2015, p. 35),  such as the requirement to provide information to payment service users, 
the time limits for the execution of payment orders , etc. 
9  See paragraph 3.1.3 of Opinion CON/2016/19 and paragraph 2.4.1 of Opinion CON/2017/2.  
10   This is the case in Bulgaria (Article 122( 2) and Articles 124 and 139 of the Law on Payment Services and Payment 
Systems),  Hungary (Article 41(19) of the Act CXXXIX of 2013 on the Magyar Nemzeti Bank  and Act LXXXV of 
2009), Lithuania (Article 62 of Law No XII -2561 of 30 June 2016  on Payments ), Malta (Regulation 2 of Legal Not ice 
326 of 2015), Spain (Law 18/2014 of 15 October 2014), and Slovenia (based on the list of competent authorities 
available on the European Commission’s website  
http://ec.europa.eu/competition/sectors/financial_services/national_competent_authorities.pdf ).   
ECB -PUBLIC  
6 many other Member States11 have allocated these tasks between their NCBs and other public 
authorities with competences in the fields of competition and/or consumer protection. There are 
also Member States that have not assigned any of these tasks t o their NCBs . As the majority of the 
Member States have allocated at least some of the tasks relating to the application of Regulation 
(EU) 2015/751 to their NCBs , the new tasks conferred upon the CBC would thus not be regarded 
as atypical of NCB tasks .  
In addition, the ECB has consistently expressed the view that consumer protection tasks 
discharged by an NCB (and, in particular, by the CBC) may be regarded as central banking tasks 
provided that such tasks do not interfere with the performance of the NCB’ s ESCB -related tasks, 
and to the extent that those tasks complement existing supervisory powers and thus contribute to 
the soundness of the financial market and the preservation of confidence in the marketplace12. It 
therefore follows that the new tasks whi ch are conferred upon the CBC  by the draft law cannot be 
regarded as atypical of an NCB, nor as being discharged in the exclusive interest of the 
government.  
3.4.3  Extent to which performance of the new task creates conflicts of interest with existing central bank 
tasks 
The new task conferred upon the CBC by the draft law does not appear to create any conflicts of 
interest with other central bank tasks performed by the CBC.  As with other consumer protection 
tasks, sufficient mitigation measures must be put in pl ace to ensure that in the event of a conflict of 
interest supervisory considerations prevail13. 
3.4.4  Extent to which performance of the new task is disproportionate to the financial or organisational 
capacity of the CBC  
The principle of financial independence re quires that Member States do not put their NCBs in a 
position where they have insufficient financial resources to carry out their  national and their  ESCB-
related tasks, both from an operational and financial perspective. Furthermore, each NCB  
concerned should have additional financial and human resources at its disposal to ensure that the 
new tasks can be carried without impacting on the NCBs’ operational or financial capacity to 
perform its ESCB- related tasks14. It is noted that the draft law provides that each competent 
authority may set reasonable cost -oriented fees for the performance of its duties pursuant to the 
draft law and/or the Regulation (EU) 2015/751  and demand payment of such fees by the 
                                                 
11  This is the case in Belgium (Article XV.18/4 of the Code of Economic Law), Croatia (Article 4 paragraphs 1, 2, 5 and 
6, and Article 6 of the Law NN 50/2016 on Implementation of EU Regulations Governing Payment Systems), Ireland 
(Regulation 6 of Statutory Instrument No 550 of 2015 and of Statutory Instrument No 292 of 2016), Italy (Article 3 of 
legislative Decree No 218 of 15 December 2017 and Article 34- quater of the Law on payment services), Netherlands 
(Article 2(r) and Article 5 and Annex 2 of the Administrative Order  of 17 March 2017 amending the Administrative 
Order implementing EU Regulations on Financial Markets), Poland (Article 14 of the Law on Payment Services of 19 
August 2011 (Dz.U. 2017, item 2003)), Slovakia (Article 2(3) of Law 492/2009 Coll., Law 747/2004 Coll., Article 2b of 
Law No 291/2002 Coll., Article 36(1) of Law No 80/1997 Coll., Law No 514/2003 Coll., Article 90 of Law N o 492/2009 
Coll.), and the Czech Republic (based on the list of competent authorities available on the European Commission’s 
website http://ec.euro pa.eu/competition/sectors/financial_services/national_competent_authorities.pdf ).  
12    See paragraphs 3.2 and 4.4 of Opinion CON/2016/34 and paragraph 2.3.2 of Opinion CON/2017/3.  
13  See paragraph 3.1 of Opinion CON/2015/21.  
14  See paragraphs 2.1 and 2.2 of Opinion CON/2011/30.  
ECB -PUBLIC  
7 supervised entities15. Each competent authority is also ent itled to issue directives on the 
determination and payment of these fees16. The ECB notes that the CBC must  be in a position to 
avail itself of the necessary resources, including personnel, in view of the need to ensure that it  has 
the capacity to perform i ts ESCB- related tasks and that existing supervisory functions are not 
affected by these new tasks17.  
3.4.5  Extent to which performance of the new task fits into the institutional set -up of the CBC, in the light 
of central bank independence and accountability considerations  
Given the complementarity of the new tasks with the CBC’s existing functions, in particular in the 
field of supervision of payment institutions  and other payment service providers , the performance of 
the new tasks does not appear to be problematic as regards  the institutional set -up of the CBC  or 
raise accountability or personal and institutional independence concerns.  
3.4.6  Extent to which the performance of tasks harbours substantial financial risks  
The draft law provides that the CBC, the Governor  of the CBC, the board of directors of the CBC 
and any person who is an advisor or officer of the CBC,  will not be liable in the event of  an action, 
application or other legal proceedings for damages in relation to any act or omission that took place 
durin g the performance of their duties and the exercise of their powers and responsibilities 
pursuant to the draft law and/or Regulation (EU) 2015/751, except where the act or omission was 
not committed in good faith or was the result of gross negligence18. The performance of the new 
tasks would not, therefore, appear to harbour undue financial risks for the CBC.  
3.4.7  Extent to which performance of the new task exposes members of the decision -making bodies of 
the CBC to disproportionate political risks and impacts on their personal independence  
The performance of the new tasks conferred under the draft law does not appear to expos e the 
decision -making bodies of the CBC to any disproportionate political risk or to impact their personal 
independence.  
3.4.8  Conclusion  
The new tasks conferred upon the CBC can be regarded as  central banking tasks based on the 
understanding that they are complementary to the CBC’s existing tasks in the area of supervision 
of payment service providers and, ultimately, ancillary to the task of promoting the smooth 
operation of payment systems. This understanding is supported by the fact that t he consumer 
protection objectives of Regulation (EU) 2015/751 are closely interrelated with the objective of 
promoting the smooth operation of payment systems. It is , however , important that the CBC can 
avail itself of the necessary  resources  for the performance of its  new tasks , so that the CBC’s  
                                                 
15  See Article 22(1) of the draft law.  
16  See Article 22(2) of the draft law.  
17  See paragraphs 2.1 and 2.2 of Opinion CON/2011/30.  
18  See Article 23 of the draft law.  
ECB -PUBLIC  
8 capacity to perform its ESCB -related tasks  and existing supervisory functions  is not affected.  
 
This opinion will b e published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 14 February 2018.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI