Council Regulation (EC) No 2532/98 of 23 November 1998 concerning the powers of the European Central Bank to impose sanctions
Date: 1998-11-23
Institutions: Council of the European Union
Subjects: European Central Bank, fine, infringement of EU law, type of business

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Official Journal of the European Communities

27. 11. 98

COUNCIL REGULATION (EC) No 2532/98

of 23 November 1998

concerning the powers of the European Central Bank to impose sanctions

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community (hereinafter referred to as the ‘Treaty') and in
particular to Article 108a(3) thereof and to Article 34.3 of
the Protocol
the European
(No 3) on the Statute of
System of Central Banks and of the European Central
Bank (hereinafter referred to as the ‘Statute'),

Having regard to the recommendation of the European
Central Bank (hereinafter referred to as the ‘ECB') (1),

Having regard to the opinion of the European Parlia-
ment (2),

Having regard to the opinion of the Commission (3),

Acting in accordance with the procedure laid down in
Article 106(6) of the Treaty and in Article 42 of the
Statute, and under the conditions set out
in Article
109k(5) of the Treaty and paragraph 7 of the Protocol (No
11 ) on certain provisions relating to the United Kingdom
of Great Britain and Northern Ireland,

(1) Whereas this Regulation, according to Article 34.3 of
the Statute, in conjunction with Article 43.1 of the
Statute, paragraph 8 of Protocol No 11 and para-
graph 2 of the Protocol (No 12) on certain provisions
relating to Denmark, is not to confer any rights or
impose
any obligations on a non-participating
Member State;

(2) Whereas Article 34.3 of

the Statute requires the
Council to specify the limits and conditions under
which the ECB is entitled to impose fines or periodic
penalty payments on undertakings for
failure to
comply with obligations under its regulations and
decisions;

(3) Whereas infringements of

the obligations arising
from ECB regulations and decisions can arise in
various fields of competence of the ECB;

(4) Whereas it

in order

is appropriate,

to ensure a
uniform approach towards the imposition of sanc-
tions in the various fields of competence of the ECB,
that all general and procedural provisions for the
imposition of such sanctions are contained in a single

Council Regulation; whereas other Council Regula-
tions provide for specific sanctions in specific fields
and refer to this Regulation for the principles and
procedures relating to the imposition of such sanc-
tions;

(5) Whereas, in order to provide an effective regime for
the administration of sanctions, this Regulation must
allow the ECB a certain discretion, both in relation to
the relevant procedures and to their implementation
within the limits and conditions laid down in this
Regulation;

(6) Whereas the European System of Central Banks
(hereinafter referred to as the ‘ESCB') and the ECB
have been entrusted with the task of preparing for
their full operation in the third stage of Economic
and Monetary Union (hereinafter referred to as ‘Stage
Three'); whereas timely preparation is essential
to
enable the ESCB to fulfil its tasks in Stage Three;
whereas an essential element of preparation is the
adoption, ahead of Stage Three, of the regime for the
imposition of sanctions on undertakings failing to
comply with obligations imposed upon them by ECB
regulations and decisions; whereas it is desirable to
inform market participants as soon as possible of the
detailed provisions the ECB may deem necessary to
adopt for the imposition of sanctions; whereas it is
therefore necessary to provide the ECB from the date
of entry into force of this Regulation with a regula-
tory power;

(7) Whereas the provisions of this Regulation can only
be effectively applied if participating Member States
adopt the necessary measures with a view to ensuring
that their authorities have the powers to assist and
collaborate fully with the ECB in the implementation
of the infringement procedure as required by this
Regulation,
the
Treaty;

in accordance with Article 5 of

(8) Whereas the ECB is to have recourse to the national
central banks to carry out the tasks of the ESCB to
the extent deemed possible and appropriate;

(1) OJ C 246, 6. 8. 1998, p. 9.
(2) OJ C 328, 26. 10. 1998.
(3) Opinion delivered on 8 October 1998 (not yet published in

the Official Journal).

(9) Whereas decisions under this Regulation imposing
pecuniary obligations are to be enforceable in accord-
ance with Article 192 of the Treaty,

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HAS ADOPTED THIS REGULATION:

Article 1

Definitions

For the purposes of this Regulation:

1.

2.

3.

4.

5.

6.

‘participating Member State' shall mean a Member
State which has adopted the single currency in accord-
ance with the Treaty;

‘national central bank' shall mean the central bank of a
participating Member State;

shall mean those natural or

‘undertakings'
legal
persons, private or public, with the exception of public
persons in the exercise of their public powers, in a
participating Member State, which are the subject of
obligations arising from ECB regulations and de-
cisions, and shall include branches or other permanent
establishments located in a participating Member State,
the head office or registered office of which is outside a
participating Member State;

‘infringement' shall mean any failure by an under-
taking to fulfil an obligation arising from ECB regula-
tions or decisions;

‘fine' shall mean a single amount of money which an
undertaking is obliged to pay as a sanction;

‘periodic penalty payments' shall mean amounts of
money which, in the case of a continued infringement,
an undertaking is obliged to pay as a sanction, which
shall be calculated for each day of continued infringe-
ment following the notification of the undertaking of a
decision, in accordance with the second subparagraph
of Article 3(1), requiring the termination of such an
infringement;

7.

‘sanctions'
shall mean fines and periodic penalty
payments imposed as a consequence of an infringe-
ment.

Article 2

Sanctions

1.
The limits within which the ECB may impose fines
and periodic penalty payments on undertakings, unless
otherwise provided for in specific Council Regulations,
shall be the following:

(a)

fines: the upper limit shall be EUR 500 000; and

(b) periodic penalty payments: the upper limit shall be
EUR 10 000 per day of infringement. Periodic penalty
payments may be imposed in respect of a maximum
period of six months following the notification of the
undertaking of the decision in accordance with Article
3(1).

2.
In determining whether to impose a sanction and in
determining the appropriate sanction, the ECB shall be
guided by the principle of proportionality.

The ECB shall take into consideration, where rele-

3.
vant, the circumstances of the specific case, such as:

(a) on the one hand, the good faith and the degree of
openness of the undertaking in the interpretation and
fulfilment of the obligation arising from an ECB regu-
lation or decision as well as the degree of diligence
and cooperation shown by the undertaking or, on the
other, any evidence of wilful deceit on the part of
officials of the undertaking;

(b) the seriousness of the effects of the infringement;

(c) the repetition, frequency or duration of the infringe-

ment by that undertaking;

(d) the profits obtained by the undertaking by reason of

the infringement;

(e) the economic size of the undertaking; and

(f) prior sanctions imposed by other authorities on the
same undertaking and based on the same facts.

4. Whenever the infringement consists of a failure to
perform a duty, the application of a sanction shall not
exempt the undertaking from its performance, unless the
decision adopted in accordance with Article 3(4) explicitly
states the contrary.

Article 3

Procedural rules

The decision on whether or not

1.
to initiate an
infringement procedure shall be taken by the Executive
Board of the ECB, acting on its own initiative or on the
basis of a motion to that effect addressed to it by the
national central bank of the Member State in whose juris-
diction the alleged infringement has occurred. The same
decision may also be taken, on its own initiative or on the
basis of a motion to that effect addressed to it by the ECB,
by the national central bank of the Member State in
whose jurisdiction the alleged infringement has occurred.

the decision to initiate an
Written notification of
infringement procedure shall be given to the undertaking
concerned, to the relevant supervisory authority and to
the national central bank of the Member State in whose
jurisdiction the alleged infringement has occurred or to
the ECB. The notification shall disclose the details of the
allegations against the undertaking and the evidence on
which such allegations are founded. Where appropriate,
the decision shall require the termination of the alleged
infringement and shall give notice to the undertaking
concerned that periodic penalty payments may be
imposed.

2.
The decision referred to in paragraph 1 may require
the undertaking to submit to an infringement procedure.
In carrying out the infringement procedure, the ECB or
the national central bank, as the case may be, shall have
the right to:

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(a) require the submission of documents;

(b) examine the books and records of the undertaking;

(c) take copies or extracts from such books and records;

and

(d) obtain written or oral explanations.

the conduct of

When an undertaking obstructs
the
infringement procedure, the participating Member State
where the relevant premises are located shall afford the
including ensuring access by the
necessary assistance,
ECB or the national central bank to the premises of the
undertaking, so that the aforementioned rights can be
exercised.

3.
The undertaking concerned shall have the right to be
heard by the ECB or the national central bank, as the case
may be. The undertaking shall be given no fewer than
thirty days to present its defence.

4.
The Executive Board of the ECB shall, as soon as
possible after receiving a submission from the national
central bank which initiates the infringement procedure
or after having consulted the national central bank of the
Member State in whose jurisdiction the alleged infringe-
ment has occurred, adopt a reasoned decision as to
whether an undertaking has committed an infringement
together with the sanction, if any, to be imposed.

5.
The undertaking concerned shall be notified in
writing of the decision and shall be informed of its right
of review. Notification of the decision shall also be given
to relevant supervisory authorities and to the national
central bank of the Member State in whose jurisdiction
the infringement has occurred.

The undertaking concerned shall have the right to
6.
request a review of the decision of the Executive Board by
the Governing Council of the ECB. Such a request shall
be made within thirty days of the receipt of the noti-
fication of the decision and shall include all supporting
information and allegations. Such a request shall be
addressed in writing to the Governing Council of the
ECB.

7. A decision by the Governing Council of the ECB in
response to a request submitted under paragraph 6 shall
include the reasons for the decision and written noti-
fication thereof
shall be given to the undertaking
concerned, to the relevant supervisory authority of that
undertaking and to the national central bank of
the
Member State in whose jurisdiction the infringement
occurred. The notification shall inform the undertaking of
its right of judicial review. If no decision has been taken
by the Governing Council of the ECB within two months
of the request, the undertaking concerned may request a
judicial review of the decision of the Executive Board in
accordance with the Treaty.

8. No sanction shall be enforced against the under-
taking until the decision has become final through either:

(a)

the period of thirty days referred to in paragraph 6
the undertaking making a
having elapsed without
request for review to the Governing Council of the
ECB; or

(b) the Governing Council notifying the undertaking of
its decision, or the period referred to in paragraph 7
having elapsed without the Governing Council having
taken a decision.

The proceeds from sanctions imposed by the ECB

9.
shall belong to the ECB.

If an infringement

10.
relates exclusively to a task
entrusted to the ESCB under the Treaty and the Statute,
an infringement procedure may be initiated only on the
basis of this Regulation, irrespective of the existence of
any national law or regulation which may provide for a
separate procedure. If an infringement also relates to one
or more areas outside the competence of the ESCB, the
right to initiate an infringement procedure on the basis of
this Regulation shall be independent of any right of a
competent national authority to initiate separate pro-
cedures in relation to such areas outside the competence
of the ESCB. This provision shall be without prejudice to
the application of criminal law and to prudential super-
visory competencies in participating Member States.

11. An undertaking shall bear the costs of the infringe-
ment procedure if
it has
committed an infringement.

it has been decided that

Article 4

Time limits

1.
The right to take the decision to initiate an infringe-
ment procedure, as provided for in this Regulation, shall
expire one year after the existence of the alleged infringe-
ment first became known either to the ECB or to the
national central bank of the Member State in whose juris-
diction the alleged infringement occurred and, in any
case, five years after the infringement occurred or, in the
case of a continued infringement, five years after the
infringement was terminated.

2.
The right to take the decision to impose a sanction
in respect of an infringement, as provided for in this
Regulation, shall expire one year after the decision to
initiate the procedure as described in Article 3(1) was
taken.

3.
The right to start an enforcement procedure shall
expire six months after the decision has become enforce-
able pursuant to Article 3(8).

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Article 5

Judicial review

The Court of Justice of the European Communities shall
have unlimited jurisdiction within the meaning of Article
172 of
final decisions
whereby a sanction is imposed.

the Treaty over the review of

Article 6

Subject to the limits and conditions laid down in this
2.
Regulation, the ECB may adopt regulations to specify
further
the arrangements whereby sanctions may be
imposed in accordance with this Regulation as well as
guidelines to coordinate and harmonise the procedures in
relation to the conduct of the infringement procedure.

Article 7

Final provisions

General provisions and regulatory power

1.
In the event of a conflict between the provisions of
this Regulation and the provisions of other Council Regu-
lations enabling the ECB to impose sanctions, the provi-
sions of the latter shall prevail.

This Regulation shall enter into force on the day of its
publication in the Official Journal of the European
Communities.

Article 6(2) shall apply from the date of entry into force of
this Regulation. The remaining Articles shall apply from
1 January 1999.

This Regulation shall be binding in its entirety and directly applicable in all Member
States.

Done at Brussels, 23 November 1998.

For the Council

The President

R. EDLINGER