EN ECB -PUBLIC  
OPINION OF THE EUROPEAN CENTRAL BANK  
of 6 April 2018  
on amendments to the Law on Hrvatska Narodna Banka  and to the  
Law on the State Audit Office  
(CON/201 8/17) 
 
Introduction and legal basis  
On 23 January 2018 the European Central Bank (ECB) received a request on behalf of the Speaker  of 
Hrvatski Sabor  (the Croatian Parliament ) for an opinion on two draft laws proposed to it by a member of 
the Croatian Parliament  comprising (i) a draft law amending the Law on Hrvatska n arodna banka (the 
‘draft law’) and (ii) a draft law amending the Law on the State Audit Office ( the ‘draft law on the State 
Audit Office’)  (hereinafter  referred to collectively as the ‘draft laws’ ). 
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 laws relate to Hrvatska narodna banka (HNB). In accordance w ith the first sentence 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  laws 
1.1 State Audit Office’s audit of HNB  
1.1.1  The draft law  on the State Audit Office provides that Državni ured za Reviziju (the State Audit 
Office) shall audit HNB , which  is a new task of the State Audit Office. In this respect, the draft law 
on the State Audit Office provides  that an audit of HNB’s annual financial statements and the 
legality of the overall operations of HNB be performed at least once a year by the State Audit Office 
in accordance with the l aw governing financial statement audits, International Audit Standards, 
International Accounting Standards for regular beneficiaries of the Croatian state budget and those 
eligible to become beneficiaries of the Croatian state budget .  
1.1.2  The draft law provides  that the  State Audit Office wi ll audit the effectiveness  of HNB’s  business 
operations in accordance with the regulations governing the procedures  of the State Audit Office 
and the provisions of the Law on Hrvatska narodna banka (hereinafter ‘the Law on HNB ’). The draft 
law sets out that t his audit shall include the following items which are stated to be related to the 
balance sheet of HNB : (i) HNB ’s receivables  in relation to loans extended and investments in 
securities denominated in Croatian Kuna (HRK) or foreign currencies ; (ii) HNB ’s receivables  in 
relation to foreign currency time deposits and securities with foreign banks ; (iii) HNB’s liabilities in 
                                                 
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).  
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2 respect of foreign currency loans taken out with foreign commercial and central banks and with 
international financial institutions ; (iv) an audit of the financial and day -to-day operations of H NB 
according to International Standards on Auditing, Internati onal Accounting Standards, and 
International Financial Reporting Standards ; (v) the calculation of income and costs of HNB, the 
production of the profit and loss account, the allocation of profit to the reserves of HNB, the share 
capital of HNB , and the cr editing of excess profit to the Croatian treasury; ( vi) the review of the 
methodology for setting foreign currency exchange rates; ( vii) transactions involving physical cash 
and securities at HNB’s depositories, Croatian banks, Financijska agencija (Fina, the Financial 
Agency ) and Hrvatski novčarski zavod  (the Croatian Monetary Institute) , including H NB’s policy for 
the manufacture of banknotes and the total production cost of banknotes;  (viii) procurement at 
HNB; ( ix) investments of HNB , including buildings  and business premises; ( x) the supervision of 
banks by HNB , including the lawfulness and frequency of supervision of large and small banks by 
HNB; (xi) domestic and foreign payment  system s at HNB , including Hrvatski sustav velikih plaćanja  
(HSVP, the Croatian Large Value Payment System ); Nacionalni klirinški sustav ( NKS, the National 
Clearing System ), HNB as part of the TARGET2 (the Trans -European Automated Real -time Gross 
Settlement Express Transfer S ystem) and EuroNCS ( the E uro National Clearing System ), which 
are used to process Single European Payment Area  (SEPA) payments in euro; (xii) HNB statistics ; 
and (xiii) the employment policy of HNB  and its lawfulness. The draft law further specif ies that the 
State Audit Office may assess other transactions and procedures  that it considers relevant for the 
purposes of producing a report concerning the operations of H NB, and that HNB will publish its 
audit reports . 
1.1.3  The draft law  provides  that as part of this audit the State Audit Office shall not assess activities 
relating to the implementation of the goals and the discharge of duties established under the 
Treaty, the Statute of the European System of Central Banks and of the ECB  (hereinafter the 
‘Statute of the ESCB ’), and the Law on HNB.  
1.1.4 The draft law provides that HNB must  present  to an authorised state auditor for review the 
confidential information referred to in Article 37 of the Statute of the ESCB , in accordance with the 
audit rules  of the European System of Central Banks (ESCB) . The data contained in such 
documents, papers, reports, records, and other such information may not be used to draft the audit  
report. T he State Audit Office must  ensure that the confidentiality of this  information and 
documents is kept to the same extent as that which HNB appl ies for professional secrets.  
1.1.5 The draft law  spec ifies that, without prejudice to the regulations governing the procedures  of the 
State Audit Office, the State Audit Office may not propose th e dismissal of member s of Savjet 
Hrvatske narodne banke (the HNB Council ) nor order any action that might call into question the 
principle of  the institutional, functional, personal, and financial independence of the HNB .  
1.1.6 The draft law on the State Audit Office provides  that, in addition to the State Audit Office, audits of 
the HNB’s annual financial statements may also be performed by independent external auditors 
selected by Odbor za financije i državni proračun Hrvatskog sabora (the Finance and Central 
Budget Committee of the Croatian Parliament ). The audit performed by the State Audit Office will 
be entirely separate from audits performed by independent external auditors selected in 
accordance with the Law on HNB.   
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3 1.1.7  The draft law on State Audit Office provides  that the HNB may disclose to the public the financial 
statements of its operations as well as other reports on issues within the framework of its statutory 
mandate that are of public interest in Croatia.  
1.2 HNB ’s reporting obligations in relation to  the Croatian Parliament  
The draft law requires  HNB  to submit to the Croatian Parliament  semi -annual information about the 
financial condition, the level of price stability  achieved and the implementation of monetary policy  
for the first six months of the current year by 30 September, and for the second six months by 30 
March of the following year , and to submit to the Croatian Parliament a  regular annual  report on its 
activities  and business operations  by 1 June of every  year. The Croatian Parliament  shall take a 
position by voting on all such reports . 
1.3  Appointment of the members of the HNB Council  
1.3.1  The draft law  provides  that the HNB Council  will comprise a total of nine members, five that will be 
HNB employees, including  the Governor and up to four Vice- Governors , and four that will be 
external members . The Governor will be the chair of the HNB Council.  The Governor will, at the 
beginning of his term, appoint a Deputy Governor from amongst  the Vice- Governors  who will 
deputise for him in the event of his being unable to fulfil his duties .  
1.3.2  The draft law pro vides that the members of the HNB Council  (i.e. the Governor, two to four Vice-
Governors, and the external members ), will be appointed by the Croatian Parliament on the 
proposal of its Odbor za izbor, imenovanja i upravne poslove (Elections , Appointment s and 
Administration Committee)  at least three months before the expiry of the term of office for which 
they are appointed. The Committee will take into account the opinion of Odbor za financije i državni 
proračun (the Finance and State Budget Committee) . The draft law further provides  that the 
Governor will be appointed by the Croatian Parliament on the proposal of the President of Croatia, 
and that the two to four Vice- Governors will be selected and appointed by the Croatian Parliament 
at the proposal of the President of Croatia after  the Finance and State Budget Committee 
expresses its opinion.  
1.3.3  The draft law provides  that a candidate for Governor or Vice -Governor must  meet the following 
requirements : (1) be a Croatian citizen; (2) have no criminal record and not be under investi gation; 
(3) be entirely physically and mentally fit to discharge the duties of Governor; (4) hold a university 
degree in economics and have banking and financial expertise and the professional skills to 
discharge the duties of Governor; ( 5) have organisational and management skills and a strong 
sense of teamwork; ( 6) have at least ten years  of experience in banking or business finance in 
banks and/or state and/or academic institutions;  and (7) have a clear vision of the development of 
the Croatian monetary and financial system and be well informed about the situation in the 
Croatian banking sector .  
1.3.4  The draft law provides  that a candidate for HNB Governor  or Vice -Governor  shall present to the 
Finance and State Budget Committee of the Croatian Parliament the proposed HNB work 
programme for the next term for which the candidate has applied. After consultations and 
presentations by and of the candidate, the members of the Finance and State Budget Committee 
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4 will vote to express their view on the skills and expertise of the candidates for Governor  or Vice -
Governor .  
1.3.5  The draft law  provides  that the Governor and Vice- Governors will be employed at the HNB on a 
full-time basis for an indefinite period.  
1.3.6  The draft law provides  that the external members of the HNB Council will be elected from among 
various segments of Croatian business and social life (industry, employers, academia, consumer 
protection associations, etc.) with professional experience in the field of economy and finance.  
1.3.7  The draft law provides  that the members of the HNB Council will be appointed for a term of six 
years  with only one possibility of reselection. No  member of the HNB Council may serve more than 
two terms as member of the Council . In the event that  any member of the HNB Council departs 
before the end of his/her term, a new member will be selected for the remainder of the departing 
member’s term  only.  
1.4 Employees of HNB  
The draft law provides  that employment with the HNB, the conclusion of employment contracts, 
and the appointment of employees to management posts with special powers and responsibilities 
will be the responsibility of the HNB Governor after a  public competition procedure has been 
completed.  Employees in all management posts at the HNB  will be subject to reselection at four -
year intervals after an internal competition procedure has been completed. Only Croatian citizens 
may be HNB employees.  
1.5  Secondary market purchases of public sector securities by HNB  
The draft law authoris es the HNB, in specific situations  and with the aim to achieve financial 
stability and other aims of monetary credit policy, to repurchase in the secondary market, directly 
from credit institutions, sec urities issued by Croatia or a local self -government unit.  
1.6 Foreign currency operations of HNB  
The draft law  provides  that HNB will monitor, devise, apply, and supervise regulatory measures in 
the area of foreign currency operations of credit institutions and authorised ‘ bureaux de change’  
and will perform and regulate foreign currency operations domestically and in relationships with 
foreign countries under the provisions of the Law on HNB and the law regulating foreign exchange 
in Croatia. In this  respect , the HNB ’s foreign exchange operations include: (1) the implementation 
of domestic foreign exchange policy ; (2) foreign exchange market activities, the setting of foreign 
exchange rates and the exchange rate of the domestic currency, and the publication of the 
domestic currency exchange rate each day;  (3) international payment traffic services ; (4) the 
management of Croatia’s foreign liquidity reserves;  (5) credit relationships with foreign countries , 
including the policy for borrowing from and lending to foreign countries, foreign currency debt 
management, the purchase and sale of foreign currency debts and claims  and swap arrangements;  
(6) relations with international financial institutions ( the International Monetary Fund, the World 
Bank, the ECB, the Bank for International Settlements and development banks);  (7) relations with 
the European Union and the bodies and organisations of the European Union;  (8) HNB’s bilateral 
arrangements with foreign countries;  (9) correspondent and current account relationships with 
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5 foreign banks and financial institutions;  (10) c ontrol over part of the foreign exchange operations of  
credit institutions;  and (11) management of HNB’s risks in international relations.  
1.7  Capital , reserves and allocation of profits and l osses of HNB  
1.7.1  The draft law clarifies that the share capital of HNB , which is required to amount to 
HRK  2,500,000,000,  has been paid up by Croatia.  
1.7.2  The draft law provides  that HNB’s general reserves may not exceed twice the amount of the HNB’s  
share capital.  The amount of the specific reserves established by HNB to cover identifi ed losses  
may not exceed the amount of HNB’s share capital.  
1.7.3  In relation to the appropriation of HNB’s profit and the coverage of losses , the draft law  provides  
that HNB’s operating profit shall be allocated to general and specific reserves and to the Croatian  
Treasury. T he allocation of operating profit to general and specific reserves shall not exceed the 
stipulated level of general and specific reserves established by the HNB Counci l. The residual profit 
following allocation to general and specific reserves sha ll constitute extraordinary revenue of the 
Croatian Treasury. HNB shall cover any operating losses using general reserv es, in the first 
instance. A ny operating losses of HNB that cannot be covered from general reserves will be 
covered by first using speci fic reserves, then using share capital, and finally  by the Croatian 
Treasury. HNB will transfer the residual operating profit to the Treasur y within eight days from the 
date on which the annual financial statements and operational report for the previous year are 
delivered to the Croatian Parliament. HNB may establish a special operating fund for the purpose 
of acquiring property and rights constituting tangible fixed assets or  fixed asset investments or both 
and for the purpose of  establish ing specialised financial organisations.  
1.8 Certain p owers of the HNB over credit institutions  
1.8.1 The draft law  provides  that a credit institution shall be deemed insolvent if it fails in a timely manner 
to settle and/or fulfil its statutory and/or contractual obligations domestically and/or abroad and 
these obligation s are not settled on its behalf  under a guarantee. HNB may stipulate more detailed 
criteria for determining the insolvency of credit institutions.  
1.8.2  The draft law  prohibit s an insolvent credit institution  from making  payments from its accounts , 
approving credits, giving guarantees or assuming new financial obligations , and payment service 
providers  are prohibited from executing payment orders for an insolvent credit institution, except in 
respect of  citizens’ savings and current accounts in domestic and foreign currency . If, as part of the  
supervision or investigation of a cre dit institution,  it is shown that a credit institution has  breached 
certain provisions of the Law on HNB, HNB may declare that credit institution insolvent and adopt 
measures in relation to that credit institution and specific members of its  executive board. 
Measures  which may be taken in relation to an insolvent credit institution or a credit institution 
breaching the provisions of the Law on Credit Institutions2 include (1)  the suspensi on of lending for 
15 to 60 days; (2) t he suspension of payments to foreign countries  for 15 to 60 days , except in 
relation to mature foreign credits and obligations to foreign countries under conventions, 
guarantees and issued lett ers of credit; (3) a  restriction on borrowing from foreign coun tries for 30  
                                                 
2  Zakon o kreditnim institucijama ( Narodne novine no 159/13, 19/15 and 102/15).  
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6 to 60 days; and (4 ) the suspension of securities purchases and lending for 10  to 30 days.  The HNB 
Governor will decide upon and impose such measures and the duration of their application . 
1.9 Obligation to denominate and pay all monetary obligations in Cr oatia in Kuna  
1.9.1  The draft law provides  that all contractual monetary  obligations in Croatia shall, unless otherwise 
provided by law, be denominate d, and discharged by means of payment denominated,  in Kuna.  
1.9.2  The draft law provides  that c ontracting parties may eliminate the risk of a material change in the 
value of the currency in which a financial obligation is denominated after conclusion of the contract 
but before maturity of the financial obligation by concluding appropr iate protective monetary value 
clauses, in order  to protect themselves against the risk of a change in the value of financial 
obligations between conclusion and fulfilment of a contract for the discharge or payment of a 
financial obligation. A Croatian credit institution may agree with a borrower to use a floating interest 
rate clause or a protective monetary value clause ; the simultaneous inclusion of both a protective 
clause and a floating interest rate is prohibited . Protective monetary or foreign currency clauses 
may only be used if the financial obl igation whose value is being ensured is linked to the floa ting 
value of a global currency  and the credit institution has a sufficient amount of this currency on 
deposit or sources of funding in this currency on the credit side of its balance sheet throughout the 
term of the contract.  
1.9.3  The draft law provides  that w here a credit institution intends to approve a credit for clients in 
domestic currency and link the credit to the exchange rate of another currency, it must first obtain 
the opinion of the HNB and Vijeće za financijsku stablinost  (the Financial Stability C ouncil ). 
 
2. General observations  
2.1 Although Member States wit h a derogation, including Croatia, do not yet participate in the third 
stage of economic and monetary union, they have a legal duty to adapt their national legislation 
including the statutes of their national central banks (NCBs) to ensure compatibility with the Treaty 
and the Statute of the ESCB3. Any legislative reform in any such Member State should aim to 
gradually achieve consistency with Eurosystem standards4. 
2.2 The ECB would like to r ecall that it has previously  issued Opinions  CON/2016/33 and 
CON/2016/52 in response to legislative consultations from the Croatian authorities on legislative 
initiatives concerning certain matters addressed in this opinion, including the State Audit  Office’s 
audit of HNB, HNB’s reporting obligations in relation to the Croatian Parliament  and the reduction 
of the number of terms of office of HNB’s Governor and the other members of HNB’s Council .  
 
                                                 
3 Articl e 131 of the Treaty.  
4 See paragraph 3.4 of ECB Opinion CON/2008/34, paragraph 2.1 of ECB Opinion CON/2017/17. All ECB opinions 
are published on the ECB website at www.ecb.europa.eu.   
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7 3. Specific observations  
3.1  State Audit Office’s audit of HNB  
3.1.1 As previously noted by the ECB5, the principle of institutional independence referred to in 
Article  130 of the Treaty and Article 7 of the Statute of the ESCB refers the exercise of central bank 
powers and the performance of the tasks and duties conferred on central banks not being subject 
to external instructions or government influence. In part icular, where a NCB's  operations are 
subject to the control of a st ate audit office or similar body charged with controlling the use of public 
finances, the scope of the control (a) should be clearly defined by the legal framework; (b) should 
be without prejudice to the activities of the NCB’s independent external auditor s to examine all 
books and accounts of the NCB6 and, further, in line with the principle of institutional 
independence;  (c) should comply with the prohibition on giving instructions to an NCB and its 
decision -making bodies; and (d) should not interfere wit h the NCB’s ESCB -related tasks7. The 
state audit should be conducted on a non- political, independent and purely professional basis8. 
The draft law s fail to satisfy these requirements  and safeguards in a number of respects.  
3.1.2  First, the draft law s exclude  from the scope of the audit activities related to the reali sation of goals 
and the execution of tasks established by the Treaty, the Statute of the ESCB and the Law on 
HNB9. However, i n other  more specific  provisions10, the draft law s broaden the scope of the audit 
to include almost all tasks of HNB . The exclusion from the scope of the audit of HNB’s activities of 
the implementation of goals and the discharge of duties  under the Law on HNB would seem, 
literally read, to have the consequence of  excluding all of HNB’s activities pursuant to the Law on 
HNB from the scope of the State Audit Office’s audit. Since this does not appear to be consistent 
with the manifest intention of the draft law s, and more importantly with a number of the draft laws’  
provisions as indicated above,  the coexistence of such provisions which on the one hand exclude 
most of HNB’s activities from the scope of the draft laws and on the other hand which include them 
casts legal doubt on the precise scope of the audit by the State Audit  Office . Moreover, the 
proposed assessment of ‘other transactions and procedures  that it considers relevant ’11 grants 
undefined,  , powers  to the State Audit Office in respect of  its choice as to what it  deems relevant for 
the preparation of its report on HNB’s business operations.  Therefore, the scope of the State Audit 
Office’s control of HNB’s operations is not clearly defined by the draft laws.  
3.1.3 Second, the draft laws explicitly state that the audits of the State Audit Office and of HNB’s  external 
auditors will be completely separate12. The draft law s further state  that the audit of business 
operations by the State Audit Office will imply the verification of, inter alia , financial and day -to-day 
operations of the HNB according to International Standards on Auditing, International Accounting 
                                                 
5 See paragraph 2.1.1 of Opinion CON/2016/33 and paragraph 3.1.1 of Opinion CON/2016/52.  
6 See Article 61 of the Law on HNB for the activities of the independent external auditors of the NCBs.  
7 See the ECB’s Convergence Report, June 2016, p. 26- 27 and Opinions CON/2011/9,  CON/201 1/53 and 
CON/2015/57.  
8 See the ECB’s Convergence Report, June 2016, p. 26- 27. 
9 See Article 1 of the draft law adding Article 61.a (3) of the Law on H NB.  
10 See Article 1 of the draft law adding Article 61.a (2) of the Law on H NB. 
11 See Article 1 of the draft law adding Article 61.a (2) (4.8) of the Law on H NB. 
12 See Article 1 of the draft law adding Article 61.c (2) of the Law on H NB. 
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8 Standards, and International Financial Reporting Standards . In this respect, the task of evaluating 
HNB’s financial statements already  belongs to the independent external auditors13. Also, the  State 
Audit Office’s audit is stated to include the HNB’s balance sheet14, which is an integral part of the 
HNB’s financial statements, which are already subject to the audit of the HNB’s external auditors15. 
The draft law s should be adapted so that the scope of audit of the State Audit Office does not 
overlap with the audit of the external auditors who, given their independence and expertise, are 
better placed than a State body to audit the financial statements of an NCB. In addition, a  
duplication of opinions regarding HNB’s financial statements  may negatively affect the credibility of 
HNB’s accounts.  Furthermore, International Accounting Standards  and International Financial 
Reporting Standards  are applicable to the preparation of financial statements, not to their auditing . 
In addition , the draft law on the State Audit Office states that audits of the HNB’s annual financial 
statements may also be performed by independent external auditors16, ind icating that this is  
optional rather than mandatory . This is not consistent with the Law on the HNB  which  requires the 
prepared financial statements and the overall operation of HNB  to be audited by independent 
external auditors in accordance with audit regulations and the International Auditing Standards17. 
In conclusion, the scope of the State Audit Office’s control of HNB’s operations, as proposed by the 
draft laws, is not without prejudice to the activities of HNB’s independent external auditors to 
examine all HNB’s books and accounts.  
3.1.4 Third , as already noted in its O pinion CON/2016/33, the ECB understands that the audit performed 
by the State Audit Office is generally governed by the provisions of the current Law on the State 
Audit Office. Its provisions stipulate that an audit includes a procedure for examining the auditee’s 
financial transactions in terms of the legal use of funds and for assessing the effectiveness and 
efficiency of the auditee’s operations and how effectively the auditee’s general objectives were met 
or how effectively the objectives of the auditee’s individual financial transactions, programmes and 
projects were met. Furthermore, the auditee must comply with audit findings and notify the State 
Audit Office of the actions taken in response to the audit findings18. It follows that the State Audit 
Office would be empowered to assess whether HNB meets its general objectives, including its 
primary objectiv e of maintaining price stability. These provisions of the Law on the State Audit 
Office in conjunction with the relevant provisions of the draft law s are not in line with the principle of 
central bank independence referred to in Article 130 of the Treaty a nd Article 7 of the Statute of the 
ESCB. In this respect it is noted that the draft laws provide that the State Audit Office may not order 
any action that might call into question the principle of the institutional, functional, personal, and 
financial inde pendence of the HNB. The ECB understands that this provision is designed to ensure 
that the scope of control of the State Audit Office is intended to comply with the prohibition on 
giving instructions to the HNB. For the sake of legal certainty, it is sugg ested that the draft laws be 
                                                 
13 See Article 61 of the Law on HNB.  
14 See Article 1 of the draft law adding Article 61.a (2) of the Law on HNB.  
15 See Article 61 of the Law on HNB.  
16  See Article 1 of the Law on the amendments to the Law on the State Audit Office.  
17  See Article 61 of the Law on HNB.  
18  See Article 14 of the Law on the State Audit Office.  
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9 adapted to clarify that the above- referenced provisions of the Law on the State Audit Office would 
not apply to audits of the HNB.  
3.1.5 Fourth, the scope of the State Audit Office’s control of HNB’s operations  should not interfere with 
the HNB’s ESCB- related tasks. As noted in paragraph 3.1.2 , it is legally uncertain whether the 
HNB’s ESCB- related tasks are excluded from the scope of the State Audit Office’s audit of 
business operations. Moreover, although the provisions of the draft law purport to prohibit the State 
Audit Office from evaluat ing the activities referring to the reali sation of ESCB- related goals and the 
execution of ESCB- related tasks and from making audit findings re lating  to HNB’s ESCB- related 
tasks , the draft law  specifically provide s that the HNB must give  to the authorized state auditor an 
insight into confidential data referred to in Article 37 of the Statute of the ESCB  for the purposes of 
the audit,  in accordance with ESCB rules19. This seems to imply that the State Audit Office would 
have the right to examine HNB’s ESCB -related activities  but not to evaluat e and make audit 
findings  in respect of the m. It is difficult to understand what purpose would be served by such 
examinations by the State Audit Office in circumstances where the State Audit Office would be 
unable to make any evaluations or findings as a result of such examinations. T he ECB would 
therefore recommend the exclusion of HNB’s ESCB -related tasks from the scope of the State Audit 
Office’s audit of business operations, since this should clearly ensure that the audit would not 
interfere with HNB’s ESCB -related tasks.   
Moreover, Article 37 of the Statute of the ESCB requires the members of the governing bodies and 
the staff of NCBs, even after their duties have ceased, not to disclose information of the kind 
covered by the obligation of professional secrecy. The primacy of Union law and the rules adopted 
thereu nder mean that national laws on access by third parties (such as the State Audit Office) to 
documents may not lead to infringements of the ESCB’s confidentiality regime. The access of a 
state audit office to an NCB’s information and documents must be limit ed and must be without 
prejudice to the ESCB’s confidentiality regime to which the members of NCBs’ decision- making 
bodies and staff are subject20. Hence, access by the State Audit Office to HNB’s confidential 
information must be limited to that which is st rictly necessary for the performance of the state 
auditor’s tasks. Such access must also be without prejudice both to HNB’s independence and to 
the ESCB confidentiality regime, to which the members of the HNB’s decision- making bodies and 
staff are subject.  In this respect the ECB welcomes the provision21 that the State Audit Office must 
safeguard the confidentiality of information and documents disclosed by HNB to the same extent as 
the professional secrecy provisions applied by HNB22. 
3.1.6 Fifth, under the draft laws the audit performed by the State Audit Office is stated to include the 
audit of the HNB as part of the TARGET 2 payment system operated by the Eurosystem . This is 
inconsistent with the provision of the draft law s, which provide that the State Audit Office will not 
assess activities relating to the implementation of goals and the discharge of duties established 
                                                 
19  See Article 1 of the draft law adding Article 61.b(1) and (2) of the Law HNB.  
20  See the ECB’s Convergence Report, June 2016, p. 26 . 
21  See Article 1 of the draft law adding Article 61.b(3) of the Law HNB.  
22  See the ECB’s Convergence Report, June 2016, Chapter 7.5.3.  
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10 under the Treaty , the S tatute of the ESCB and the Law on HNB .23 The TARGET2 payment system 
is established pursuant to an ECB Guideline adopted pursuant to the first and fourth indents of 
Article 127(2) of the Treaty,24 and has been identified, pursuant to Decision ECB/2014/35 of the 
European Central Bank25, as a systemically important payment system (SIPS) overseen by the 
ECB as c ompetent authority under Regulation (EU) No 795/2014 (ECB/2014/28)26. Therefore, it is 
suggested to delete the reference to the State Audit Office’s audit of TARGET2,  since TARGET2 is 
operated on behalf of  the Eurosystem and the scope of control of the Stat e Audit Office should not  
interfere with HNB’s ESCB -related tasks .  
3.1.7 Sixth, the scope of the HNB audit is stated to include the  NKS and the EuroNCS . The ECB 
understands that these systems are not within HNB’s competence nor operated by HNB . 
3.1.8 Seventh , regarding the proposed audit of HNB’s employment policy, the ECB notes that the 
concept of financial independence should be assessed from the perspective of whether any third 
party is able to exercise either direct or indirect influence not only over an NCB’s tasks but also 
over its ability to fulfil its mandate, both operationally in terms of manpower, and financially in terms 
of appropriate financial resources. Member States may not impair an NCB’s ability to employ and 
retain the qualified staff  necessary for the NCB to perform independently the tasks conferred on it 
by the Treaty and the Statute of the ESCB . Also, an NCB may not be put into a position where it 
has limited control or no control over its staff, or where the government of a Member State can 
influence its policy on staff matters27. 
3.1.9 Finally, regarding the provision in the draft law relating to the S tate Audit Office’s audit of the 
financial and day -to-day operation of HNB, reference is made, inter alia , to the review of  the 
appropriateness of the application of international risk assessment standards published by the 
Basel Committee on Banking Supervision (BASEL)  and the establishment of risk reserves. It is not  
clear why the draft l aw refers to BASEL standards as  these s tandards do not apply to central 
banks.  
3.2  HNB reporting obligations in relation to  the Croatian Parliament  
3.2.1 As regards the HNB’s proposed reporting obligations  to the Croatian Parliament, as previously 
noted by t he EC B28, and in line with the principle of institutional independence under Article 130 of 
the Treaty and Article 7 of the Statute of the ESCB, the NCBs and the members of their decision-
making bodies are prohibited from seeking or taking instructions from Union instit utions, bodies or 
agencies, from any government of a Member State or from any other body. In addition, the 
governments of the Member States are prohibited from seeking to influence the members of the 
                                                 
23  See Article 1 of the draft law adding Article 61.a (3) of the Law HNB.  
24  Guideline ECB/2012/27 of the European Central Bank of 5 December 2012 on a Trans -European Automated Rea-
time Gross settlement Express Transfer system (TARGET2) (rec ast) (ECB/2012/27) (OJ L 30, 30.1.2013, p. 1).  
25  Decision ECB/2014/35 of the European Central Bank of 13 August 2014 on the identification of TARGET2 as a 
systemically important payment system pursuant to Regulation (EU) No 795/2014 on oversight requirements for 
systemically important payment systems (OJ L 245, 20.8.2014, p. 5).  
26  Regulation ECB/2014/28 of the European Central Bank (EU) No 795/2014 of 3 July 2014 on oversight requirements 
for systemically important payment systems (OJ L 217, 23.7.2014, p.  16). 
27  See ECB’s Convergence Report, June 2016, p. 27.  
28  See paragraphs 2.2.2 and 2,2,3 of Opinion CON/2016/33 and paragraphs 3.2.3 and 3.2.4 of Opinion CON/2016/52.  
ECB -PUBLIC  
11 NCBs’ decision -making bodies whose decisions may affect the fulfilment of the NCBs’ ESCB -
related tasks.  
3.2.2 While t he explanatory memorandum emphasises that the independence enjoyed by the members 
of the HNB bodies in charge of decision- making must  not be brought into question during the 
discussion on HNB’s annual report and semi -annual information in the Croatian Parliament, and 
that the special status of Governors  must  be respected in terms of their membership in the ECB 
General Council , and that the Croatian Parliament must  respect the confidentiality requirements 
flowing from the Statute of the ESCB , the ECB understands that the contents of the explanatory 
memorandum have no legal standing in Croatian law, but constitute mere statements as to the 
authors’ intentions, without providing any statutory or legal guarantees. In addition, these intentions 
are not reflected in the provisions of the draft law.  
3.2.3 The draft law  does  not explicitly clarify the precise implications of the Croatian Parliament’s taking a 
position on the HNB’s annual report and semi -annual information regarding HNB’s financial 
condition, the level of price stability achieved and monetary policy implementation.  The rights of 
third parties to approve, suspend, annul or defer an NCB’s decisions are incompatible with the 
Treaty and the Statute of the ESCB as far as ESCB -related tasks are concerned29. Therefore, the 
Croatian Parliament’s competence to take a position on the HNB’s annual report on its activities 
and semi -annual information regarding HNB’s financial condition, the level of price stability 
achieved and monetary policy implementation  would affect HNB’s  institutional independence, as it 
goes beyond the transparency and accountabil ity obligation of a NCB  towards a national 
parliament . As regards  the compatibility of a dialogue between NCBs and third parties with central 
bank independence,  the ECB refers to ECB Opinion CON/2016/33 and ECB Opinion 
CON/2016/5230, which clarif y that such a dialogue is welcome and compatible with central bank 
independe nce provided that ( 1) this does not result in interference with the independence of the 
members of the NCB’s decision- making bodies; ( 2) the special status of G overnors in their capacity 
as members of the ECB’s General Council is fully respected; and ( 3) confidentiality requirements 
resulting from the Statute of the ESCB are observed. A ‘position’ of the Croatian Parliament on the 
aforementioned annual report and semi -annual information seem s to imply that the Croatian 
Parliament could give direct or indirect instructions to the HNB and its decision- making bodies and 
members, for example as regards amending HNB’s annual report or challenging HNB’s 
assessment regarding price stability and the implementation of monetary policy. Any right of the 
Croatian Parliament to approve, suspend, annul or defer HNB’s decisions would be contrary to 
HNB’s institutional independence under the Treaty and the Statute of the ESCB31.  
                                                 
29  See ECB’s Convergence Report, June 2016, p. 22.  
30  See paragraph 2.2.3 of Opinion CON/2016/33, paragraph 3.2.4 of Opinion CON/2016/52.  
31  See paragraphs 3.5, 3.6 and 3.7 of Opinion CON/2008/31.  
ECB -PUBLIC  
12 3.3  Appointment of the members of the HNB Council  
3.3.1 The draft law states that, in the event any member of the HNB Council departs before the end of 
his/her term, a new member will be selected for the remainder of the departing member’s term 
only. Article 14.2 of the Statute of the ESCB provides that the ter m of office of a governor of a 
national central bank shall be no less than five years.  Personal independence would be 
jeopardised if the same rules for the security of tenure and grounds for dismissal of Governors did 
not also apply to other members of the decision -making bodies of NCBs involved in the 
performance of ESCB -related tasks32. Various provisions of the Treaty and of the Statute of the 
ESCB require comparable security of tenure. As consistently stated in the ECB’s convergence 
reports and opinions,  when an NCB’s statutes are amended, the amending law should safeguard 
the security of tenure of the Governor and of other members of decision- making bodies who are 
involved in the performance of ESCB -related tasks33. The ECB would recom mend that, in the ev ent 
any member of the HNB Council departs before the end of his/her term, a new member be selected 
for a term of at least five years, ins tead of the remainder of the departing member’s term only .  
3.3.2  The ECB takes note of  the proposed expansion of the HNB Council by up to nine members , four of 
whom will be external members drawn from various segments of Croatian business and social life, 
including industry, employers, academia, consumer protection associations, etc., with professional 
experience in the field of economy and finance.  The personal independence of the members of a 
NCB's decision- making bodies entails ensuring that no conflict of interest arises between the duties 
of members of NCB decision- making bodies involved in the performance of ESCB -related tasks in 
relation to their respective NCBs and any other functions which such members of decision- making 
bodies may have and which may jeopardise their personal independence. As a matter of principle, 
membership of a decision -making body involved in the performance of ESCB -related tasks is 
incompatible with the exercise of other functions that might create a conflict of interest. In 
particular, members of such decision- making bodies may not hold an office or have an interest that 
may influence their activities, whether through office in the executive or legislative branches of the 
state or in regional or local administrations, or through involvement in a business organisation. 
Particular care should be taken to prevent potential conflicts of interest on the part of non- executive 
members of decision- making bodies34.  
3.3.3 With respect to the provisions of the draft law that the members of the HNB Council will be 
appointed for a term of six years  with only one possibility of reselection, and that no member of the 
HNB Council may serve more than two terms  as member of the Council , the ECB recalls that, in 
view of the principle of central bank independence laid down in Article 130 of the Treaty and 
Article  7 of the Statute of the ESCB, Governors and other members of NCBs’ decision- making 
bodies involved in the performance of ESCB -related tasks may not be dismissed for reasons other 
than those mentioned in Article 14.2 of the Statute. Therefore, the c urrent members of HNB’s 
Council should be allowed to complete their current terms of office, irrespective of how many terms 
                                                 
32   See paragraph 2.2 of Opinion CON/2014/51.  
33  See ECB’s Convergence Report, June 2016, p. 23.  
34   See ECB’s Convergence Report, June 2016, pp. 24- 25. 
ECB -PUBLIC  
13 of office have already been served in the past, and the draft law should be adapted to explicitly 
guarantee the completion of their current terms. Moreover, the ECB understands, in accordance 
with the principles of the rule of law, legal safety, legal predictability and legal certainty under the 
Croatian Constitution, that the requirement that the members of the HNB Council may not ser ve 
more than two terms of office does not apply in respect of terms which were served before the date 
the draft law  comes  into effect35. This implies that the current and past members of the HNB 
Council would be able to serve two terms in the future, and that terms served in the past are not 
included and do not count towards the calculation of the limitation of two terms. The ECB 
welcomes this from the perspective of legal certainty36. 
3.3.4 The draft law would need to clarify , for the sake of legal certainty,  whether the Governor and the 
Vice-Governors would be appointed by the Croatian Parliament on the proposal of the Parliament’s 
Election, Appointment, and Administration Committee,  or on the proposal of the President of 
Croatia,  as currently both appointment procedures are envisaged by the draft law . 
3.3.5 It may be useful to reflect on how a candidate for Governor of HNB would be considered to meet 
the criterion of being entirely mentally fit to discharge the duties of Governor.  
3.3.6 The ECB notes that the appointment of the members of the HNB Council is already regulated in 
detail by the Law on HNB37. The ECB therefore understands that the intention of the draft law is to 
repeal the relevant provisions of the Law on HNB.  
3.4 Employees of HNB  
Regarding the proposed requirement that employees in all management posts at the HNB be 
subject to reselection at four -year intervals after an internal competition procedure has been 
completed, as noted above (see paragraph 3.1. 8), the concept of financial  independence should be 
assessed from the perspective of whether any third party is able to exercise either direct or indirect 
influence not only over an NCB’s tasks but also over its abi lity to fulfil its mandate, including  
operationally in terms of manpower. Member States may not impair an NCB’s ability to employ and 
retain the qualified staff necessary for the NCB to perform independently the tasks conferred on it 
by the Treaty and the Statute of the ESCB . Also, an NCB may  not be put into a position where it 
has limited control or no control over its staff, or where the government of a Member State can 
influence its policy on staff matters38. Against this backdrop, the ECB suggests that further 
consideration be given to the imposition of a requirement on HNB under the draft law  that all 
managerial posts at the HNB be subject to internal recruitment procedures  every four years , as this 
would appear to intrude on the HNB’s a bility to independently determine its own policy on st aff 
matters.  
3.5 Secondary Market Purchases of public sector securities by HNB  
Regarding the authorisation to HNB to repurchase public sector securities  in the secondary market  
directly from credit institutions, the ECB notes that, in accordance with the prohibition of monetary 
                                                 
35  See the Decision of the Constitutional Court of the Republic of Croatia U -III-930/2015, 31 March 2015.  
36  See paragraph 2.3 of Opinion CON/2016/34 and paragraph 3.3 of Opinion CON/2016/52.  
37  See Articles 79, 80 and 82 of the Law on HNB.  
38  See ECB’s Convergence Report, June 2016, p. 27.  
ECB -PUBLIC  
14 financing under Article 123 of the Treaty39, the purchase directly by the HNB of debt instruments 
from central governments, regional, local or other public authorities, other bodies governed by 
public law or public undertakings by Member States shall be prohibited.  As noted in the recitals to 
Council Regulation (EC) No 3603/9340 Member States must take appropriate measures to ensure 
that this prohibition is applied effectively and fully. In particular, purchases made on the secondary 
market must not be used to circumvent the objective of Article 123 of the Treaty41.   
3.6 Capital, reserves and allocation of profits and losses of HNB   
3.6.1 Even if an NCB is fully independent from a functional, institutional and personal point of v iew, its 
overall independence would be jeopardised if it could not autonomously avail itself of sufficient 
financial resources to fulfil its mandate (i.e. to perform the ESCB -related tasks required of it under 
the Treaty and the Statute  of the ESCB ). Member States may not put their NCBs in a position 
where they have insufficient financial resources and inadequate net equity42 to carry out their 
ESCB- related tasks .43 Financial independence requires that in performing its tasks an NCB can 
independently assess the ri sks involved and has the power to decide on any necessary 
precautions to take. An NCB is best placed to make these assessments and needs to have the 
necessary tools to evaluate the relevant circumstances and to make forecasts.  
3.6.2 The principle of financ ial independence requires an NCB to have sufficient means not only to 
perform its ESCB -related tas ks but also its national tasks, e.g. financing its administration and own 
operations44.  
3.6.3  Financial independence also implies that an NCB should always be sufficiently capitalised. In 
particular, any situation should be avoided whereby for a prolonged period of time an NCB’s net 
equity is below the level of its statutory capital or is even negat ive, including where losses beyond 
the level of capital and the other financial buffers, such as reserves  and general risk provisions,  are 
carried over. Any such situation may negatively impact on the NCB’s ability to perform its ESCB -
related tasks but als o its national tasks. Therefore, the event of an NCB’s net equity becoming less 
than its statutory capital or even negative would require that the respective Member State provides 
the NCB with an appropriate amount of capital at least up to the level of the statutory capital within 
a reasonable period of time so as to comply with the principle of financial independence45.  
3.6.4 With regard to profit allocation, an NCB’s statutes may prescribe how its profits are to be allocated. 
In the absence of such provi sions, decisions on the allocation of profits should be taken by the 
NCB’s decision- making bodies on professional grounds, and should not be subject to the discretion 
of third parties unless there is an express safeguard clause stating that this is without  prejudice to 
the financial means necessary for carrying out the NCB’s ESCB -related tasks as well as national 
                                                 
39   See also Article 78 of the Law on HNB.  
40   See Recital 7 of 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 T reaty (OJ L 332, 31.12.1993, p.  1). 
41  See Case C -62/14 Gauweiler and Others v. Deutscher Bundestag, paras. 93- 127, EU:C:2015:400.  
42  See paragraph 3.3 of Opinion CON/2014/24, paragraph 2.2 of O pinion CON/2014/27 and paragraph 3.1.1 of Opinion 
CON/2014/56.  
43  See ECB’s Convergence Report, June 2016, p. 25.  
44  See ECB’s Convergence Report, June 2016, pp. 25, 188 and paragraph 4.3 of Opinion CON/2009/85.  
45  See ECB’s Convergence Report, June 2016,  pp. 25- 26. 
ECB -PUBLIC  
15 tasks. Profits may be distributed to the State budget only after any accumulated losses from 
previous years have been covered46 and financial provi sions deemed necessary to safeguard the 
real value of the NCB’s capital and assets have been created47. Any amendment to the profit 
distribution rules of an NCB should only be initiated and decided in cooperation with the NCB, 
which is best placed to assess  its required level of reserve capital48. As regards financial provisions 
or buffers, NCBs must be free to independently create financial provisions to safeguard the real 
value of their capital and assets. Member States may also not hamper NCBs from building up their 
reserve capital to a level which is necessary for a member of the ESCB to fulfil its tasks49.  
3.6.5 Based on the foregoing , the proposed limitations on the quantity of HNB’s general reserves to twice 
the amount of HNB’s share capital and on the amount of HNB’s specific reserves to the amount of 
HNB’s share capital would be inconsistent with the principle of financial independence. HNB is best 
positioned to assess the risks involved in its operations and what financial precautions need to be 
taken to guard against these risks, including the establishment of the necessary level  of general 
and specific reserves  or other types  of financial buffers such as general risk provisions .  
3.6.6  In addition, the ECB welcomes that under the draft law losses of HNB would ultimately be covered 
by the Croatian T reasury. However, using share capital to cover losses that cannot be covered 
from general and specific reserves could lead to situations where by the net equity is below the 
level of HNB’s statutory capital , a situation which should be avoided  for a prolonged period of time. 
The reference to HNB’s share capital for covering losses should therefore be removed from the 
draft law.  
3.6.7  The ECB notes that when applying the rules of the draft law, the HNB would need to release, for 
the benefit of the State budget,  a considerable part of its existing  reserves.  The proposed statutory 
reduction of HNB's general reserves could also diminish its financial independence.  
3.6.8 Finally, in relation to the establishment of a special  operating fund to acquire property and rights 
constituting tangible fixed assets and/or fixed asset investments and to establish specialised 
financial organisations, it is not clear how the establishment of such fund would relate to the other 
provisions addressing capital, reserves and allocation of profits and losses of the HNB50. In any 
case, any such fund or specialized financial organization may not be utilized in such a manner as 
to breach HNB’s obligations with respect to the prohibition of monetary financing under Article 123 
of the Treaty51. 
3.7 Foreign Currency Operations of HNB  
3.7.1  The ECB notes that , under the Law on HNB , HNB’s tasks include the definition and implementation 
of monetary and foreign exchange policies and the holding and management of Croatia’s foreign 
                                                 
46 See paragraph 4.3 of Opinion CON/2009/85 and paragraph 2.2. of Opinion CON/2009/53.  
47  See ECB’s Convergence Report, June 2016, pp. 25, 27 and paragraph 3.3 of Opinion  CON/2009/26 and 
paragraph 2.1 of Opinion CON/2012/69.    
48  See paragraphs  3.6 and 4.2 of Opinion CON/2009/83 and paragraph 3.3 of Opinion CON/2009/53.  
49   See paragraph 4.2 of Opinion CON/2008/34, paragraph 2.3 of Opinion CON/2009/26 and paragraph 2.1 of Opinion 
CON/2012/69.  
50  See Article 1 of the draft law amending Article 57 of the Law on HNB.  
51  See paragraph 6.4 of the ECB’s Annual Report 2015.  
ECB -PUBLIC  
16 reserves. HNB enjoys various related c ompetences and powers to im plement monetary and foreign 
exchange policies, conduct open market operations, lay down monetary and foreign exchange 
policy measures and instruments, trade in foreign currency and foreign cash, manage foreign 
reserves, open accounts abroad, carry out all  types of banking and financial transactions with other 
central banks, credit and financial institutions outside Croatia,  and international institutions and 
organizations, and enter into payment and clearing agreements with foreign clearing institutions. 
The Law on HNB also contains provision s with respect to consultations and reporting by the 
Ministry of Finance with and to the HNB on the foreign borrowing transactions of Croatia52.  
3.7.2  As regards supervision over authorised foreign exchange offices, the  ECB notes that , under the 
Law on HNB , HNB’s tasks include the issuance and withdrawal of authorisations and approvals in 
accordance with the laws governing the operation of credit institutions, credit unions, payment 
institutions, electronic money institutions, payment systems, foreign exchange operations and the 
operation of authorised foreign exchange offices53. The ECB also understands that under the Law 
on foreign exchange54 Financijski inspektorat ( the Financial Inspectorate)  of Ministarstvo financija 
(the Ministry of Finance)  also has a role in the supervision of foreign exchange offices55.  
3.7.3  The ECB understands that setting foreign currency exchange rates and the exchange rate of the 
domestic currency, and publishing the currency exchange rate, is regulated by the Law on foreign 
exchange56.  
3.7.4  The ECB understands that all payments (whether domestic or to or from a foreign country) are 
regulated by the Law on payment systems57.  
3.7.5  Contrary to the provision of the draft law which provides that the foreign currency operations of 
HNB include, inter alia, HNB’s relations hip with the ECB, this relationship is already regulated by 
the provisions of the Statute of the ESCB  and cannot be regulated further by national laws .  
3.7.6  Against this backdrop, the ECB suggests that the Croatian legislator gives further consideration to 
the interaction of the provisions of the draft law regarding the foreign currency operations of the 
HNB and the relevant provisions of the Law on HNB, the Law on foreign exchange, the Law on 
payment systems and the Statute of the ESCB.  
3.8 Certain powers of HNB over credit institutions  
The ECB notes that under  the Law on HNB the tasks and powers of the HNB  Council include  to 
establish the insolvency of credit institutions and decide on submitting proposals for the initiation of 
bankruptcy proceedings against credit institutions or on the withdrawal of authorisations of credit 
institutions58. Furthermore, the HNB enjoys a range of powers as the competent supervisor of 
                                                 
52  See Articles 4, 9, 10, 16, 17, 18, 19, 20, 38 and 74 of the Law on HNB.  
53  See Article 4 of the Law on HNB.  
54  Zakon o deviznom poslovanju ( Narodne novine no 96/03, 140/05, 132/06, 150/08, 92/09, 133/09, 153/09, 145/10 
and 76/13).  
55  See Articles 55 and 58 of the Law on foreign exchange.  
56  See Article 42- 45 of the Law on foreign exchange.  
57  Zakon o platnom prometu ( Narodne novine No 133/09 and 136/12); s ee Article 1 and 43.  
58 See Article 42(9) of the Law on HNB.  
ECB -PUBLIC  
17 credit institutions under  the Law on credit institutions59 and the Law on resolution of credit 
institutions and investment companies60, including with respect to the potential unavailability of 
deposits . Certain consequences flowing from the inability of a credit institution to meet its 
obligations are also regulated by the Law on settlement finality in payment and financial 
instruments settlement systems61. The protection of citizens’ deposits held at savings and current 
accounts is also addressed by  the Law on deposit insurance62. Against this backdrop, the ECB 
suggests that the Croatian legislator gives further consideration to the interaction and considerable 
overlap of the provisions of the draft law regarding the proposed powers of the HNB over credit 
institutions and the relevant provisions of the Law on HNB, the Law on credit institutions63, the Law 
on resolution of credit institutions and investment companies64, the  Law on settlement finality in 
payment and financial instruments settlement systems and the Law on deposit insurance65.  
3.9  Obligation to denominate and pay all monetary obligations in Croatia in Kuna  
The ECB understands that the matter s addressed by the provisions of the draft law relating to the 
obligation to denominate and pay all monetary obligations in Croatia in Kuna, besides the Law on 
HNB, which defines that Kuna shall be legal tender in Croatia and that use of other currencies may 
be allowed for domestic payments by law66, are regulated by other l aws in Croatia, including the 
Law on civil obligations67, the Law on credit institutions68, the Decision on risk management69, the 
Law on consumer credit70, the Law on credit agreements for consumers relating to residential 
immovable property71, the Law on Foreign Exchange72 and the Law on Payment Systems73. 
Against this backdrop the ECB suggests that the Croatian legislator gives further consideration to 
                                                 
59  Zakon o kreditnim institucijama ( Narodne novine no 159/13, 19/15, 102/15 and 15/18).  
60  Zakon o sanaciji kreditnih institucija i investicijskih društava ( Narodne novine no 19/15).  
61  Zakon o konačnosti namire u platnim sustavima i sustavima za namiru financijskih instrumenata ( Narodne novine no 
51/12 and 44/16).  
62  Zakon o osiguranju depozita (( Narodne novine no 82/15).  
63  The Law on credit institutions transposes Directive 2013/36/EU of the European Parliament and the Council of 26 
June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and 
investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/E C (OJ L 176,  
27.06.2013, p. 338) and implements Regulation (EU) No 575/2013 of the European Parliament and the Council of 26 
June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 
648/2012 (OJ L 321, 30.11.2013, p. 6) .  
64  The Law on resolution of credit institutions and investment c ompanies transposes Directive 2014/59/EU of the 
European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of 
credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC,  
2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations  
(EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council (OJ L 173, 12.6.2014, p . 
190).  
65  The Law on deposit insurance transposes Directive 2014/49/EU of the European Parliament and of the Council of 16 
April 2014 on deposit guarantee schemes (OJ L 173/149, 12.06.2014).  
66   See Article 21 of the Law on HNB.  
67 Zakon o obveznim odnosima ( Narodne novine No 35/05, 41/08, 125/11 and 78/15); see Articles 21 and 22.  
68  See Articles 101, 302(6) and 303 of the Law on credit institutions.  
69   Decision on risk management, (Narodne novine No 1/2015 and 94/2016).  
70  Zakon o potrošačkom kreditiranju ( Narodne novine No 75/09, 112/12, 143/13, 147/13, 09/2015, 78/15, 102/15 and 
52/16); see Articles 4(4) and 5.  
71   Zakon o stambenom potrošačkom kreditiranju (Narodne novine No 101/2017); see Article 13(2) and 13(6).  
72  See Articles 15 and 17 of the Law on foreign exchange.  
73  See Article 13 of the Law on payment systems.  
ECB -PUBLIC  
18 the interaction of these provisions of the draft law  and the  relevant provisions  of the afore-
mentioned Laws . 
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 6 April  2018.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI