Opinion of the European Central Bank of 24 January 2002 at the request of the Netherlands Ministry of Finance  on a draft act amending the 1977 Sanctions Act (CON/2002/5)
Date: 2002-01-24
Institutions: European Central Bank
Subjects: Netherlands, administrative sanction, fight against crime, financial stability, financial supervision, national law, terrorism

EN

OPINION OF THE EUROPEAN CENTRAL BANK

of 24 January 2002

at the request of the Netherlands Ministry of Finance

on a draft act amending the 1977 Sanctions Act

(CON/2002/5)

1.

On  4  January  2002  the  European  Central  Bank  (ECB)  received  a  request  from  the  Netherlands

Ministry  of  Finance  for  an  opinion  on  a  draft  act  amending  the  1977  Sanctions  Act  (hereinafter

referred to as “the draft act”).

2. 

The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing

the European Community (hereinafter referred to as the "Treaty") and the third and sixth indents of

Article 2(1) of Council Decision 98/415/EC of 29 June 1998 on the consultation of the European

Central Bank by national authorities regarding draft legislative provisions1, as the draft act contains

provisions concerning a national central bank. Furthermore, the draft act may have an influence on

the  stability  of  financial  institutions  and  markets.  In  accordance  with  the  first  sentence  of

Article 17.5 of the Rules of Procedure of the European Central Bank, this opinion has been adopted
by the Governing Council of the ECB. 

3. 

The  objectives  of  the  draft  act  are  to  amend  the  1977  Sanctions  Act  with  a  view  to  the

implementation  of  treaties,  international  decisions,  recommendations  and  agreements  aiming  to

fight terrorism and to extending the powers of supervision of compliance with financial sanctions.

The  new  regime  creates  a  framework  for  the  sanctioning  of  persons  as  well  as  countries  and  a

specific supervisory regime to oversee the compliance by financial institutions with such financial

sanctions. The draft act does not aim to implement specific international or EU legislation, but to

provide a basis for more efficient implementation of sanctions in the future. In order to achieve this

goal, the scope of application and the supervision instruments provided for in the Sanctions Act are

to  be  updated.  The  existing  supervisory  structures  will  be  broadened  by  ministerial  decree  to

include the supervision of compliance with new financial sanctions. 

4. 

The  ECB  would  like  to  recall  the  commitment  of  the  Eurosystem  to  contribute  to  the  adoption,

implementation  and  execution  of  measures  against  the  use  of  the  financial  system  for  terrorist

1 

OJ L 189, 3.7.1998, p. 42.

                                                     
activities, as expressed in the Governing Council's public statement of 1 October 2001. In order to

ensure that public trust in the integrity of the financial system is fully preserved, it is of the utmost

importance  that  financial  systems  do  not  work  to  the  benefit  of  persons  and  organisations

associated  with  terrorist  activities.  While  recognising  that  the  compliance  with  sanctions  by

financial institutions may in some situations involve practical difficulties, the ECB considers that

good  cooperation  between  financial  institutions  and  national  authorities  will  ensure  the

effectiveness of financial sanctions. Against this background, the ECB welcomes the objectives of

the  draft  act  of  combatting  the  financing  of  terrorism  more  efficiently,  whether  individuals,

organisations  or  governments  are  responsible  for  this,  and  of  supervising  appropriately  the

compliance by financial institutions with sanctions regimes.

5. 

The ECB notes that the measures proposed are not incompatible with the existing framework for

supervision.  Article  1(F)  of  the  draft  act  proposes  that  a  new  Article  10  be  added  to  the  1977

Sanctions  Act  that  will  refer  to  the  person  responsible  for  supervising  compliance  with  its

provisions, depending on the type of institution that must comply with sanctions regulations. This

is done by direct reference to the 1992 Act on the Supervision of the Credit System, which forms

the basis for the supervision of credit institutions in the Netherlands and places the responsibility

for such supervision with De Nederlandsche Bank. It is also noted that supervision of investment

institutions  falls  outside  the  scope  of  competence  of  De  Nederlandsche  Bank,  falling  as  it  does

within  the  responsibilities  of  the  Securities  Board  of  the  Netherlands.  The  Covenant  that  has

recently been signed by these two supervisory bodies ensures that the supervision of the financial

sector as a whole will be effective2. 

6.

The  ECB  confirms  that  it  has  no  objection  to  the  competent  national  authorities  making  this

opinion publicly available at their discretion.

Done at Frankfurt am Main on 24 January 2002.

The President of the ECB

[signed]

Willem F. DUISENBERG

2 

Covenant  between  the  Securities  Board  of  the  Netherlands  and  De  Nederlandsche  Bank  on  the  coordination  of
supervision, Amsterdam, 22 October 2001.

2