Recommendation of the European Central Bank of 1 March 2001 for a Council regulation concerning an amendment to Council Regulation (EC) No 2531/98 of 23 November 1998 concerning the application of minimum reserves by the European Central Bank (ECB/2001/2)
Date: 2001-03-01
Institutions: European Central Bank
Subjects: European Central Bank, European System of Central Banks, central bank, financial institution, financial legislation, foreign-exchange reserves

C 89/4

EN

Official Journal of the European Communities

20.3.2001

EUROPEAN CENTRAL BANK

RECOMMENDATION OF THE EUROPEAN CENTRAL BANK

of 1 March 2001

for a Council regulation concerning an amendment to Council Regulation (EC) No 2531/98 of 23
November 1998 concerning the application of minimum reserves by the European Central Bank

(ECB/2001/2)

(2001/C 89/05)

EXPLANATORY MEMORANDUM

I. Introduction

Article 123(1) of
the Treaty establishing the European
Community (hereinafter referred to as the (cid:145)Treaty(cid:146)) requires
the Council of the European Union (hereinafter referred to as
the (cid:145)Council(cid:146)), as soon as it has confirmed which Member States
fulfil the necessary conditions for the adoption of a single
currency, to adopt the complementary legislation referred to
in Article 107(6) of the Treaty and Article 42 (1) of the Statute
of the European System of Central Banks and of the European
Central Bank (hereinafter referred to as the (cid:145)statute(cid:146)). A special
procedure is foreseen within the Treaty for the adoption of the
provisions referred to in Article 107(6): the Council shall adopt
them either on a proposal
from the Commission or on a
recommendation from the European Central Bank (ECB). To
avoid any duplication of effort before the start of stage III of
the European Monetary
economic and monetary union,
the ECB would
Institute and the Commission agreed that
prepare a recommendation for a Council
regulation in
accordance with Article 19.2 of the statute. On 7 July 1998,
the ECB submitted to the Council Recommendation 98/C
246/06 for
the
application of minimum reserves by the European Central
Bank (2). On 23 November 1998, the Council adopted Regu-
application of
lation (EC) No 2531/98 concerning the
minimum reserves by the European Central Bank (3). It would
be consistent to apply the same procedure to introduce the
proposed amendments to Regulation (EC) No 2531/98.

regulation (EC)

concerning

a Council

The first sentence of Article 7(2) of Regulation (EC) No
that whenever a sanction is
2531/98 stipulates in general
imposed in accordance with Article 7(1), the principles and
procedures set out in Council Regulation (EC) No 2532/98
the
of 23 November 1998 concerning the powers of

(1) Article 42 of the statute states:

(cid:145)In accordance with Article 107(6) of this Treaty, immediately after
the decision on the date for the beginning of the third stage, the
Council, acting by a qualified majority either on a proposal from
the Commission and after consulting the European Parliament and
the ECB or on a recommendation from the ECB and after
consulting the European Parliament and the Commission, shall
adopt the provisions referred to in Articles 4, 5.4, 19.2, 20, 28.1,
29.2, 30.4 and 34.3 of this statute(cid:146).

(2) OJ C 246, 6.8.1998, p. 6.
(3) OJ L 318, 27.11.1998, p. 1.

European Central Bank to impose sanctions (4) shall apply.
However, the second sentence of Article 7(2) of Regulation
In
(EC) No 2531/98 has provided for
particular,
it stipulates that the period referred to in Article
3(7) of Regulation (EC) No 2532/98 shall be reduced.

some deviations.

the request,

Article 3(7) of Regulation (EC) No 2532/98 stipulates that: (cid:145)If
no decision has been taken by the Governing Council of the
ECB within two months of
the undertaking
concerned may request a judicial review of the decision of
the Executive Board in accordance with the Treaty(cid:146). Article
7(2) of Regulation (EC) No 2531/98 has reduced this period
to 15 days by stating that: (cid:145)Whenever a sanction is imposed in
accordance with paragraph 1, the principles and procedures set
in Regulation (EC) No 2532/98 shall apply. However,
out
Article 2(1) and (3) and Article 3(1), (2), (3) and (4) of that
Regulation shall not be applicable, and the periods referred
to in Article 3(6), (7) and (8) thereof shall be reduced to
fifteen days(cid:146).

The experience of the ECB in handling a request of review by
the Governing Council of a decision of the Executive Board to
impose a sanction for non-compliance with the obligation to
hold the required level of minimum reserves has proved that
the reduced period of 15 days does not provide for sufficient
time for the Governing Council (i) to assess the complexity of
the case in a comprehensive manner; (ii) to comply with the
procedural
requirements which derive from the right of
defence of the undertakings; and (iii) to satisfy the procedural
requirements for the Governing Council to take a decision.
it would be impossible for
Only due to these requirements,
to take a decision and this would
the Governing Council
entitle, after the expiry of the 15-day period, an undertaking
to directly lodge a request for judicial review by the European
Court of
the Governing Council having
delivered a decision on the request for review.

Justice without

To prevent such situations, which may render the review
procedure ineffective, the ECB should like to kindly request
the Council to extend the 15-day time limit for the review of
sanctions in the field of minimum reserves, in order to ensure
a proper functioning of the review procedure.

(4) OJ L 318, 27.11.1998, p. 4.

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It is therefore proposed to revert back to the normal two
months period by deleting the reference made to Article 3(7)
of Regulation (EC) No 2532/98 in Article 7(2) of Regulation
(EC) No 2531/98, as follows: (cid:145)Whenever a sanction is imposed
in accordance with paragraph 1, the principles and procedures
set out in Regulation (EC) No 2532/98 shall apply. However,
Article 2(1) and (3) and Article 3(1), (2), (3) and (4) of that
Regulation shall not be applicable, and the periods referred to
in Article 3(6) and (8) thereof shall be reduced to 15 days(cid:146).

a decision in response to a request for review of a sanction
decided by the Executive Board of the ECB. As a result, the
normal period of two months which is stated in Regulation
(EC) No 2532/98 would also apply in the
cases of
non-compliance with the obligation to hold the required
amount of minimum reserves.

II. Comments on the articles

Article 1 (cid:151) Amendment

This article proposes to delete the current reference to the
reduced period for the Governing Council of the ECB to take

Article 2 (cid:151) Final provisions

This Regulation shall enter into force on the day of its publi-
cation in the Official Journal of the European Communities and
shall apply to requests made after the date of publication.

SUGGESTED AMENDMENT TO COUNCIL REGULATION (EC) No 2531/98 CONCERNING THE APPLICATION
OF MINIMUM RESERVES BY THE EUROPEAN CENTRAL BANK

(cid:145)THE COUNCIL OF THE EUROPEAN UNION,

principles and procedures relating to the imposition of
sanctions.

Having regard to the Statute of the European System of Central
Banks and of the European Central Bank (hereinafter referred
to as the (cid:147)statute(cid:148)) and in particular to Article 19.2 thereof,

Having regard to the recommendation of the European Central
Bank (ECB),

Having regard to the opinion of the European Parliament,

Having regard to the opinion of the Commission,

Acting in accordance with the procedure laid down in Article
107(6) of the Treaty establishing the European Community and
in Article 42 of the statute and under the conditions set out in
Article 43.1 of the statute, paragraph 8 of the protocol on
certain provisions relating to the United Kingdom of Great
Britain and Northern Ireland and paragraph 2 of
the
protocol on certain provisions relating to Denmark,

Whereas:

(1) The Council adopted on 23 November 1998 Regulation
(EC) No 2531/98 concerning the application of minimum
reserves by the European Central Bank (1).

(2) Specific sanctions and procedures are set out in Regulation
(EC) No 2531/98, providing for a simplified procedure for
the imposition of sanctions in the event of certain kinds of
infringements but referring to Council Regulation (EC) No
2532/98 of 23 November 1998 concerning the powers of
the European Central Bank to impose sanctions (2) for the

(3) The experience with the review procedure laid down in
Article 3(7) of Regulation (EC) No 2532/98 and simplified
by Article 7(2) of Regulation (EC) No 2531/98 has proved
that the reduced period of 15 days does not provide for
sufficient time for the Governing Council to take a proper
decision.

(4) In order to provide for an effective review procedure, the
period for the Governing Council to take a decision has to
be extended to two months,

HAS ADOPTED THIS REGULATION:

Article 1

Amendment

In Article 7(2) of Regulation (EC) No 2531/98, the reference to
Article 3(7) of Regulation (EC) No 2532/98 shall be deleted.

Article 2

Final provisions

This regulation shall enter into force on the day of its publi-
cation in the Official Journal of the European Communities.

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The provisions of this regulation shall apply to requests which
are made after the date of publication of this Regulation. To
this purpose, the date on which the request is received by the
ECB is relevant.

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

This recommendation is addressed to the Council of
European Union.

the

This recommendation shall be published in the Official Journal
of the European Communities.

Done at Frankfurt am Main on 1 March 2001.

(1) OJ L 318, 27.11.1998, p. 1.
(2) OJ L 318, 27.11.1998, p. 4.(cid:146)

The President of the ECB

Willem F. DUISENBERG