OPINION OF THE EUROPEAN CENTRAL BANK
at the request of the Italian Ministry of the Treasury, Budget and Economic Planning under
Articles 109f (6) and 109l (2) of the Treaty establishing the European Community (hereinafterreferred to as the Treaty), Article 5.3 of the Statute of the European Monetary Institute andCouncil Decision 93/717/EC of 22 November 1993 on a draft legislative decree implementingArticle 108 of the Treaty concerning the Ufficio Italiano dei Cambi (hereinafter referred to as
the Draft Legislative Decree)
(CON/98/35)
1. On 10 July 1998 the European Central Bank (hereinafter referred to as the ECB)  received a
request for an opinion from the Italian Ministry  of the Treasury, Budget and Economic Planning
on the Draft Legislative Decree. An explanatory note was also submitted to the ECB. Thisopinion is based on the English translation of the Draft Legislative Decree submitted to the ECBby the consulting authority.
2. In accordance with Article 109l (2) of the Treaty, the ECB has taken over the advisory functions
of the European Monetary Institute (hereinafter referred to as the EMI), which went intoliquidation upon the establishment of the ECB on 1 June 1998. The ECBs competence todeliver an opinion is based on Article 1.1, second indent, of the Council Decision (93/717/EC)of 22 November 1993 on the consultation of the EMI by the authorities of the Member States ondraft legislative provisions, as the Draft Legislative Decree contains provisions concerning thestatus and powers of the national central bank. In accordance with Articles 12.4 and 47.1,second indent, of the Statute of the European System of Central Banks and of the EuropeanCentral Bank (hereinafter referred to as the Statute), this Opinion has been adopted by theGoverning Council with the contribution of the General Council.
3. The ECB considers the Draft Legislative Decree to be another step towards ensuring full
compliance with the Treaty and the Statute. By cutting the remaining links between the Ufficio
Italiano dei Cambi (hereinafter referred to as the UIC) and the Italian Ministry of theTreasury, Budget and Economic Planning and by making it clear in its organisational structurethat the UIC is an instrumental entity of the Banca dItalia, the Draft Legislative Decreeeliminates from the Italian legal system those provisions which could be seen to jeopardise theindependence of the Banca dItalia when holding and managing the Italian official foreign
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reserves, where this independence is required by Article 107 of the Treaty. However, the ECB
regrets the fact that the obligation to implement Article 108 in respect of the UIC was notfulfilled by the date of the establishment of the European System of Central Banks (hereinafterreferred to as the ESCB).
4. With regard to the new organisational structure of the UIC, the ECB welcomes the objective of
Article 2.1, which establishes the legal nature of the UIC as an instrumental entity of the BancadItalia to which the latter assigns implementation tasks. However, the wording of Article 2.1and its title in particular give the wrong impression that the UIC has a role and tasks of its ownwithin the ESCB. On the contrary, the general pr inciple is that the tasks assigned to the ESCB
by the Treaty and the Statute have to be fulfilled exclusively by the ECB and by the nationalcentral banks (hereinafter referred to as the N CBs). Even though the UIC is an entity entirely
controlled by the Banca dItalia, it is the Banca dItalia which is responsible for fulfilling theobligations arising from the Treaty and the Statute or from guidelines and instructions issued bythe ECB. Therefore, the Draft Legislative Decree cannot directly assign the task ofimplementing ECB guidelines and instructions on the management of official foreign reservesto the UIC, since the Treaty assigns this task to the Banca dItalia. To better reflect thissituation, the ECB suggests that the reference to th e ESCB in the title of Article 2 be deleted (in
addition to the fact that the second and third paragraphs do not refer to ESCB tasks) and that thefirst paragraph be reworded. 
5. The ECB takes note of Article 3 of the Draft Legislative Decree, which gives the Governor of
the Banca dItalia the exclusive power to appoint the Board of Directors of the UIC and whichapplies to the members of the Board of Directors the same criteria as those which are applicableto the members of the Board of Directors of the Banca dItalia to protect their independencefrom external interference. However, the protection they enjoy against revocation, combinedwith their number, seems to conflict with the principle of instrumentality: in the event of adivergence of views between the Banca dItalia and the UIC, the former has no means by whichto impose its will on its instrumental entity. This outcome would render the assignment ofimplementing functions for the ESCB to the UIC unacceptable. The number of Board membersshould therefore be modified in order to grant the Banca dItalia effective control over itsinstrumental entity.
6. Moreover, the ECB recognises that it will normally be within the powers of the Banca dItalia to
comply with its obligations to the ECB through its instrumental entity. However, one exceptionto this general rule relates to the management of the ECBs own foreign reserves. The ECBcurrently proposes the appointment of the Banca dItalia (and all other participating NCBs) toact as its agent for the management of its foreign reserves. If the Banca dItalia wishes to
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request that this agency function be delegated to the UIC, the ECB will at least wish to review
the terms of the agreement between the Banca dItalia and the UIC as mentioned in Article 2.1.
7. Article 2.1 also needs to be reworded from the point of view of the collection of statistical
information. In fact, the reference to gathering data on foreign exchange for fact finding andstatistical purposes might cause difficulty in the euro area. A clear reference to balance ofpayments and international investment position statistics would clarify the concept and complywith the Treaty.
8. The ECB welcomes Article 4, which provides for the treatment of the Balance Sheet of the UIC
to be the same as that foreseen for the Balan ce Sheet of the Banca dItalia, in accordance with
Article 27 of the Statute, and for the Banca dItalia to be responsible for the profits and losses ofthe UIC. This financial regime makes it clear that  the UIC is in fact operating as an instrumental
entity of the Banca dItalia, which will even provide the Balance Sheet of the UIC as an annexto its Balance Sheet.
9. With regard to the functions that the UIC contin ues to perform, the ECB notes that such tasks,
which concern anti-money laundering measures, the combating of usury, and the transparencyand stability of financial intermediaries, are of limited scope in the spirit of Article 14.4. In thisrespect, the ECB understands that the highest supervision of the Ministry of the Treasury,Budget and Economic Planning (Article 2.2) consists only in the right to receive periodicreports by the UIC (Article 2.2, last sentence) and excludes any right of the Ministry of theTreasury, Budget and Economic Planning to interfere in the activities of the UIC. This isconfirmed by Article 5.2, last part, of the Draft Legislative Decree.
10. The ECB confirms that it has no objection to th is Opinion being made public by the competent
Italian authorities at their discretion.
Done at Frankfurt am Main on 31 July 1998.
For the President of the ECB
(signed)
____________________
Christian Noyer
Vice-President