No C 159/4 Official Journal of the European Communities 26. 6. 89 
1.2. In addition, because of international commerce, 
the Commission proposes to add one measure—the 
troy ounce—for use throughout the Community. 
1.3. The road traffic signs included in the specific 
uses in point 2 of the Annex clearly do not pose any 
problem for other Member States. 
1.4. However, when milk is exported to other Mem­
ber States in pints (another of the units listed in point 2 
of the Annex), the approximate value of the pint should 
be indicated on the packaging. 
Equally, when land sales in the UK and Ireland are advertised outside these two countries, the approximate 
value of the acre should be indicated. 
1.5. Of the units of measurement listed in point 3 of 
the Annex, the fathom and the therm would appear to 
pose no problem because they are traditionally both 
national and international units. 
1.6. On the other hand, the SI (International System) 
equivalents of the pint and fluid ounce should be men­
tioned on exports. 
1.7. Finally, since the ounce is used only for goods 
sold loose from bulk, it is safe to assume that only local 
sales are involved. 
Done at Brussels, 26 April 1989. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE 
Opinion on the proposal for a Council Regulation (EEC) on guarantees issued by credit 
institutions or insurance undertakings (*) 
(89/C 159/03) 
On 24 January 1989 the Council, acting in pursuance of Article 100A of the EEC Treaty, 
asked the Economic and Social Committee for an Opinion on the abovementioned proposal. 
The Committee's Opinion was prepared by its Section for Industry, Commerce, Crafts and 
Services. The Section adopted its Opinion on 5 April 1989, on the basis of the report by Mr 
Meyer-Horn. 
The Committee adopted the Opinion set out below at its 265th plenary session (meeting of 
26 April 1989) by a unanimous vote. 
1. Introduction 
1.1. Under the proposed Regulation all public autho­
rities are to be obliged to accept guarantees from credit 
institutions or insurance undertakings licensed in an EC 
Member State. The public authorities will, therefore, no 
0) OJ No C 51, 28. 2. 1989, p. 6. longer have the discretion to assess the creditworthiness 
of such credit institutions or insurance undertakings. 
Rules which are not in accordance with this principle 
are to be abolished. The 1977 Regulation on Com­
munity transit, in particular, is to be amended to pro­
vide for the acceptance of joint and several guarantees 
from any licensed credit institution or authorized 
insurance undertaking in a Member State, rather than 
26. 6. 89 Official Journal of the European Communities No C 159/5 
only from approved guarantors in the Member State 
concerned. 
1.2. The principle referred to in point 1.1 above is 
to be implemented in the present draft Regulation even 
though (i) different prudential requirements are still 
applied in the Community in respect of credit insti­
tutions (e.g. in the field of solvency and capital and 
reserves) and insurance undertakings and (ii) responsi­
bility in this field is not vested solely in the supervisory 
authorities of the State in which the enterprise con­
cerned is registered. Public authorities are thus being 
obliged to accept guarantees without, at the same time, 
being informed of the prudential requirements applying 
to the guarantees from the different Member States. 
2. General comments 
2.1. The Committee is fundamentally in favour of 
the proposal put forward by the Commission to ensure, 
by means of draft Regulation COM(88) 805, that 
responsibility for assessing the creditworthiness of cre­
dit institutions and insurance undertakings henceforth 
rests exclusively with the supervisory authorities con­
cerned and is not left to public authorities in other 
Member States. 
Whilst fully accepting this principle, the Committee 
wonders whether the practical legal implications have 
been fully taken onboard in respect of the determination 
of the national law which is to be applied, or the court 
which is to have jurisdiction (see point 3.2). 
2.2. The Committee also approves the decision to 
opt for a Regulation, based on Article 100A of the EEC 
Treaty, which will directly regulate relations between 
guarantors and bodies in receipt of guarantees in all 
EC Member States. 
3. Comments on the individual provisions 
3.1. Under Article 1 the Regulation is directly addres­
sed to all 'public authorities'. The Commission points 
out in the explanatory memorandum (Article 1) that 
the term 'public authority' means any 'entity' for which 
a Member State (or the EC) could be held responsible. 
The Commission goes on to give examples of such 
entities, listing local authorities, social security insti­
tutions, law courts and diplomatic representations of 
these authorities in third countries. The Committee 
wonders whether the term 'public authorities' could 
not be construed to cover an even broader range. In 
the absence of a clearer definition of the term 'public 
authorities' in the Regulation, it is conceivable that 
Article 1 could also apply, for example, to notaries who 
attest documents and to certain public credit insti­
tutions. The Committee assumes that the Regulation 
will, at all events, apply to those bodies which could, 
in the absence of such a regulation, invoke their status as an authority or a sovereign body in order to entitle 
them to insist that guarantees be provided by credit 
institutions or insurance untertakings established in the 
Member State concerned. 
3.2. Article 1 sets out the obligation to accept 
guarantees from all credit institutions licensed under 
Directive 77/780/EEC or insurance undertakings autho­
rized under Directive 73/239/EEC, irrespective of the 
Member State in which they are established. It is, how­
ever, not stipulated in the draft Regulation itself which 
national law is to be applicable and which court is to 
have jurisdiction. It is no doubt assumed that the 
national law of the public authority accepting the 
guarantee is normally to apply, that the authority will 
stipulate that the national courts of its own country are 
to have jurisdiction and that the guarantee will be 
realized or enforced in accordance with the rules appli­
cable in that country. 
3.2.1. The question of legal jurisdiction is in fact 
dealt with by the Brussels implementing agreement of 
27 September 1968. There are, however, some areas of 
doubt. Has the agreement unreservedly come into effect 
in all Member States? What is the effect of the sub­
sequent amendment of the agreement by Article 3 of 
the agreement of 9 October 1978, which was concluded 
after the accession of the UK, Denmark and Ireland 
and which expressly excludes tax, customs and adminis­
trative matters? At what juncture is it likely that the 
agreement will be applied in Greece (which signed on 
25 October 1982) and Spain and Portugal (which have 
yet to sign the agreement) ? 
3.2.2. The national law to the applied would clearly 
be determined by the Rome agreement of 19 June 1980. 
This agreement, which codifies the private international 
law applied in all Member States, has, however, not 
yet been ratified. Would it then follow that, unless 
otherwise agreed, in the event of a guarantee being 
taken up, the law applicable would be that of the 
country of the guarantor? 
3.2.3. In view of the questions which arise in this 
context, measures should be taken to ensure that: 
— the obligation to accept guarantees set out in Article 
1 will not lead to a situation in which creditors are 
subject to the law of a different Member State to 
that in which the main liability arises, and 
— in the case of guarantees being provided from other 
EC Member States, creditors shall be entitled to 
stipulate that jurisdiction be granted to courts in 
their own countries and to have the guarantee 
enforced, where necessary, in the simplified form 
provided for by the Brussels agreement of 27 Sep­
tember 1968. 
3.3. The obligation to accept guarantees is based on 
the consideration that the prudential regulations, which 
exist in all Member States and are being approximated 
and further developed, will ensure that every credit 
institution and insurance undertaking will be subject to 
supervision in respect of the guarantees which it pro­
vides. It is argued in the explanatory memorandum that 
a credit institution or an insurance undertaking which 
No C 159/6 Official Journal of the European Communities 26. 6. 89 
has a licence under the harmonized Community systems 
has all reasons to respect the limits 'drawn up by their 
supervisory rules' because otherwise a withdrawal of 
the licence would appear necessary. The Committee 
questions whether this statement adequately provides 
the desired legal assurance. One of the essential require­
ments is that, in the case of guarantees provided by 
credit institutions and insurance undertakings, compar­
able prudential conditions must be complied with. This 
applies particularly in respect of the supervisory 
rules—which are to be aligned—governing, for exam­
ple, the need to hold adequate capital, solvency ratios 
and balances and the need to conform to the restrictions 
on 'large credits'. The Committee calls for the requisite 
legal assurance to be provided, particularly in the event 
of the present Regulation becoming directly applicable 
law very much sooner than the various outstanding 
Directives on the alignment of prudential rules govern­
ing credit institutions and insurance undertakings 
(scheduled for 1992). In connection with the need for 
parallelism in timing the enactment of laws, the Com­
mittee would draw attention to its Opinion (^ on the 
proposal for a second Directive on the co-ordination 
of the legal and administrative provisions governing 
(!) OJ No C 318, 12. 12. 1988, p. 42 (point 1.4.2). 
Done at Brussels, 26 April 1989. the taking-up and exercise of the activity of credit 
institutions. 
3.4. The purpose of Article 2 is to amend the wording 
of Regulation (EEQ No 222/77 on Community transit 
in order to authorize the acceptance of guarantees from 
guarantors approved in other Member States, in par­
ticular from credit institutions licensed in other Member 
States under Directive 77/780/EEC and insurance 
undertakings authorized in other Member States under 
Directive 73/239/EEC. The Committee wonders if the 
draft Regulation should not address more clearly 
decisions based on the discretion allowed administrat­
ive authorities by other Community rules relating to 
guarantees. The Commission states in the section of 
the explanatory memorandum dealing with Article 2 
(see point 3, page 6) that these rules do not require 
amendment as, in the case of guarantees provided by 
credit institutions and insurance undertakings, discre­
tion is 'limited' by Article 1 of the draft Regulation. 
Reference is also made in the sixth recital to a 'limi­
tation' of the discretion of public authorities. The Com­
mittee's premise is that there is absolutely no place 
for such discretion in the areas covered by the draft 
Regulation; discrimination against guarantors from 
other EC Member States would thereby be precluded, 
which is, after all, the object of the Regulation. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE