Opinion of the European Central Bank of 21 May 2008 at the request of Česká národní banka on a draft law on Česká národní banka (CON/2008/21)
Date: 2008-05-21
Institutions: European Central Bank
Subjects: Czechia, central bank, institutional reform, monetary integration, money, national law, statistics

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 21 May 2008  

at the request of Česká národní banka 

on a draft law on Česká národní banka 

(CON/2008/21) 

Introduction and legal basis 

On 6 March 2008 the European Central Bank (ECB) received a request from Česká národní banka (ČNB) 

for an opinion on a draft law on Česká národní banka (hereinafter the ‘draft law’). 

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

European  Community  and  the  first,  second,  third,  fourth  and  fifth  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 law relates to currency matters,  means of 

payment,  Česká  národní  banka,  the  collection,  compilation  and  distribution  of  monetary,  financial, 

banking,  payment  systems  and  balance  of  payment  statistics,  and  payment  and  settlement  systems.  In 

accordance  with  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 law 

The main purpose of the draft law, which is to take effect on the date of the adoption of the euro in the 

Czech Republic, is to bring national legislation on ČNB’s status, competences and activities in line with 

the  Treaty,  the  Statute  of  the  European  System  of  Central  Banks  and  of  the  European  Central  Bank 

(hereinafter the ‘ESCB Statute’) and other relevant Community legislation, in particular with regard to the 

legal integration of ČNB into the Eurosystem. Given the scope and number of changes required in this 

regard, the Czech authorities have decided that the proposed legislation should take the form of a new law 

on  ČNB.  In  the  meantime,  the  currently  applicable  law,  i.e.  Law  No  6/1993  Coll.,  on  Česká  národní 

banka,  which  was  amended  several  times  in  recent  years  (hereinafter  the  ‘current  law  on  ČNB’),  will 

remain in force until the date of the adoption of the euro in the Czech Republic.   

2. 

General observations 

2.1  The  ECB  welcomes  the  Czech  authorities’  efforts  to  achieve  the  required  level  of  legal 

convergence. The draft law addresses several of the issues raised by the ECB in its December 2006 

1  

OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
 
                                                 
Convergence  Report2.  However,  it  is  important  to  reiterate  that,  pursuant  to  Article  109  of  the 

Treaty, ‘each Member State shall ensure, at the latest at the date of the establishment of the ESCB, 

that its national legislation including the statutes of its national central bank is compatible with this 

Treaty and the Statute of the ESCB’. Thus, the Czech Republic was already obliged to ensure the 

compatibility of its national legislation as of the date of its entry into the European Union, i.e. on 

1 May 2004. In the past, the ECB has identified inconsistencies between Czech national legislation 

in  the  areas  of  central  bank  independence,  confidentiality  and  the  prohibition  on  monetary 

financing and privileged access, on the one hand, and the relevant provisions of the Treaty and the 

ESCB Statute, on the other hand; so far these inconsistencies have not been removed, nor will they 

be removed altogether should the draft law be adopted. A different deadline applies, however, to 

the statutory requirements relating to the full legal integration of ČNB into the Eurosystem, which 

only need to enter into force at the moment that full integration becomes effective, i.e. the date on 
which the Czech Republic adopts the euro3.   

2.2 

In  the  light  of  the  above,  adopting  a  new  central  banking  law,  which  will  only  become  wholly 

effective  on  the  date  of  the  adoption  of  the  euro  in  the  Czech  Republic,  raises  certain  concerns. 

First,  since  the  current  law  on  ČNB  will  remain  in  force  until  the  date  of  the  Czech  Republic’s 

adoption of the euro, the existing incompatibilities identified in the ECB’s Convergence Reports, 

other than those related to its legal integration into the Eurosystem, will  remain unresolved. This 

will constitute an ongoing breach of the Treaty obligation referred to in the preceding paragraph. 

Given that it is yet not known when the Czech Republic will adopt the euro, this situation could 

persist  for  some 

time4.  Therefore, 

the  provisions  of 

the  draft 

law  addressing  known 

incompatibilities  of  the  current  law  on  ČNB  that  do  not  refer  to  the  integration  of  ČNB  into  the 

Eurosystem should become effective immediately on adoption of the draft law.  

2.3  Second, the fact that there could be a long interval between the adoption of the draft law and its 

coming  into  effect  may  present  a  number  of  practical  difficulties.  For  instance,  the  draft  law 

currently contains numerous references to various Community legal acts of relevance to its scope 

of  application.  By  the  time  the  draft  law  becomes  effective,  some  of  these  references  may  be 

outdated  as  the  legal  acts  in  question  may  have  been  amended  or  replaced,  thereby  necessitating 

amendments to the adopted law before it comes into effect.  

2.4   Finally,  some  of  the  provisions  of  the  draft  law  repeat  directly  applicable  Community  law 

provisions. In the ECB’s view, this is unnecessary since, as stated on previous occasions, directly 
applicable Community law provisions do not need to be ‘transposed’ into domestic law5.  

2  
3  
4  
5  

See the ECB’s Convergence Report of December 2006, p. 210-212.  
See the ECB’s Convergence Report of May 2007, p. 24.  
So far, the Czech Government has not set an official target date for the adoption of the euro. 
See, for example, ECB Opinion CON/2007/43 of 19 December 2007 at the request of the Slovak Ministry of Finance on 
a draft law on the introduction of the euro in Slovakia and on amendments to certain laws. 

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3. 

Specific observations 

3.1  Provisions concerning ESCB-related activities  

Coin issuance 

3.1.1  Article  4(2)(b)  of  the  draft  law  recognises  ČNB’s  power  to  issue  euro  coins  within  the  Czech 
Republic6. While this provision contains a footnote reference to Article 106(2) of the Treaty, ČNB 

may consider inserting in Article 4(2)(b) an explicit reference to the powers of the Council and the 

ECB in relation to the issuance of euro coins and the approval of the volume thereof, respectively, 

following  the  example  of  Article  4(2)(a)  of  the  draft  law,  which  refers  explicitly  to  the  ECB’s 

powers over the issuance of euro banknotes.     

Minimum reserves 

3.1.2  Article  30(1)  of  the  draft  law  provides  for  ČNB’s  contribution  to  the  application  of  the  ESCB’s 

minimum reserve system, while Article 30(2) of the draft law refers to the exercise of the ECB’s 

right to collect and verify information relating to minimum reserves. The ECB notes that, while the 

wording  of  Article  30(1)  is  unobjectionable  (subject,  nevertheless,  to  the  insertion  of  a  proviso 

specifying  that,  in  the  pursuit  of  its  minimum  reserve-related  activities,  ČNB  must  act  in 

accordance  with  the  relevant  ECB  regulations  and  guidelines),  Article  30(2)  is  unduly  restrictive 

and  not  strictly  necessary  in  view  of  Article  30(1).  Therefore,  ČNB  may  consider  deleting 

Article 30(2) of the draft law. 

Management of foreign reserve assets  

3.1.3  Article 31(2) of the draft law authorises ČNB to decide on the amount of its own foreign reserve 

assets and determine the investment rules. The ECB would like to draw attention to Article 31.2 of 

the ESCB Statute on foreign reserve assets held by national central banks (NCBs), providing that 

all  operations  in  foreign  reserve  assets  remaining  with  the  NCBs  after  the  transfer  of  foreign 

reserve assets to the ECB in accordance with Article 30 of the ESCB Statute must, above a certain 

limit to be established within the framework of Article 31.3 of the ESCB Statute, be subject to the 

ECB’s  approval  to  ensure  consistency  with  the  exchange  rate  and  monetary  policies  of  the 

Community. To this end, an explicit reference to Article 31 of the ESCB Statute and to the legal 
framework adopted on the basis thereof would be warranted7. 

Banknote and coin reproduction rules 

3.1.4  Article  36(b)  of  the  draft  law  authorises  ČNB  to  stipulate,  by  means  of  a  decree,  the  terms  and 

conditions under which banknotes and coins may be reproduced and under which objects imitating 

them  may  be  produced.  In  this  regard,  ČNB  is  invited  to  consider  including  a  reference  to  the 

ECB’s  reproduction  rules  for  euro  banknotes,  as  laid  down  in  Decision  ECB/2003/4  of 

6  
7  

See also Article 35(1)(a) of the draft law. 
See also ECB Opinion CON/2006/17 of 13 March 2006 at the request of the Slovenian Ministry of Finance on a draft law 
amending the Law on Banka Slovenije. 

3 

                                                 
20 March 2003  on  the  denominations,  specifications,  reproduction,  exchange  and  withdrawal  of 
euro banknotes8. 

Provisions concerning the powers of ČNB in the field of statistics 

3.1.5  Article 38(1) of the draft law refers to ČNB’s contribution to the compilation and production by the 

ECB and Eurostat, of Community statistics, stating that ČNB ‘shall transmit statistical information 

and individual data to the European Central Bank and Eurostat’. To the extent that this provision 

suggests that ČNB is under a legal obligation to transmit statistical information to Eurostat (other 

than balance of payments and international investment position statistics, in connection with which 

ČNB  is  the  competent  national  authority  in  the  Czech  Republic),  despite  the  fact  that  it  is  not  a 

member  of  the  European  Statistical  System,  ČNB  may  wish  to  reconsider  the  drafting  of  this 

provision.  

3.1.6  Article 45(2) of the draft law, referring to the treatment of confidential statistical data, provides that 

where statistical information is created by aggregating individual data for less than three reporting 

agents,  ČNB  may  provide  such  information  only  as  confidential  data  intended  exclusively  for 

statistical purposes and these data may only be published with such reporting agents’ consent. The 
ECB notes that Article 8 of Council Regulation (EC) No 2533/989 on the confidentiality regime for 

ECB statistics, which takes precedence over Article 45(2) of the draft law, contains no such explicit 

restriction and would invite ČNB to consider the relationship between Article 45(2) and Article 8 

of  Regulation  (EC)  No  2533/98  to  the  extent,  at  least,  that  the  former  would  also  apply  to  ECB 

statistics.  

3.2  Other issues 

Bank Board member eligibility criteria and termination of office  

3.2.1  The  wording  of  Article  16(1)  of  the  draft  law,  listing  the  reasons  for  which  a  Bank  Board 
member’s office terminates10, is not fully aligned with that of Article 14.2 of the ESCB Statute 

and should be modified accordingly. 

In  addition,  the  wording  of  Article  16(2)  which  contains  the  grounds  for  dismissal  of  a  Bank 

Board member should also be aligned with Article 14.2 of the Statute. In particular, the wording 

‘if  the  Governor  no  longer  fulfils  the  conditions  required  for  the  performance  of  his  office 

stipulated by law’ should be replaced by ‘if the Governor no longer fulfils the conditions required 

for the performance of his duties as foreseen in Article 14.2 of the Statute’. 

8  
9  

10  

OJ L 78, 25.3.2003, p. 16. 
Council  Regulation  (EC)  No  2533/98  of  23  November  1998  concerning  the  collection  of  statistical  information  by  the 
European Central Bank, OJ L 318, 27.11.1998, p. 8. 
In  particular,  a  Bank  Board  member’s  office  terminates  on:  (i)  the  expiration  of  the  term  of  office;  (ii)  resignation; 
(iii) taking up an incompatible office (see Article 15(1) of the draft law); (iv) the expiration of two months from the day 
on which written notice of relief from office is delivered unless the Bank Board member (or the Governing Council in 
case  of  the  Governor)  relieved  from  office  seeks  judicial  review  within  this  period;  (v)  entry  into  force  of  a  judgment 
depriving  the  Bank  Board  member  of  competence  to  perform  legal  acts  or  limiting  their  competence  to  perform  legal 
acts; and (vi) entry into force of a judgment convicting the Bank Board member of a wilful criminal offence. 

4 

 
                                                 
Legislative powers 

3.2.2  Article 52(1) of the draft law11 provides for the joint competence of ČNB and the Czech Ministry 

of  Finance  to  prepare  and  submit  to  the  Government  draft  legislation  on  currency,  money 

circulation, the money market and the status, competence, organisation and activities of ČNB as the 

central bank of the Czech Republic. Under Article 52(2) of the draft law, ČNB assists the Ministry 

of  Finance  in  preparing  draft  legislation  on  the  financial  market,  payments,  the  regulation  of 

electronic money and foreign exchange management and the law on the introduction of the single 

currency  in  the  Czech  Republic.  The  ECB  considers  that  Article  52  of  the  draft  law  should  be 

amended to provide that the respective legislative powers of ČNB and the Ministry of Finance are 

without prejudice to the powers of relevant EU authorities in this field.  

Auditing 

3.2.3  Pursuant to Article 60(2) of the draft law, the accounts of ČNB ‘shall be audited by an independent 

auditor in accordance with the Statute’. Article 27(1) of the ESCB Statute requires that the accounts 

of  the  Eurosystem  NCBs  be  audited  by  auditors  that  are  independent  and  external.  In  order  to 

comply with the ESCB Statute, Article 60(2) should therefore be amended to state that the auditor 

appointed to audit ČNB’s accounts should also be an ‘external’ auditor, in line with Article 27(1) 
of the ESCB Statute12.   

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 21 May 2008. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

11  

12  

Article 52 of the draft law largely mirrors the wording of the proposed amendment of Article 37 of the current law on 
ČNB, which was the subject of a recent consultation with the ECB – see ECB Opinion CON/2008/2 of 7 January 2008 at 
the request of the Czech Ministry of Finance on a draft law concerning the distribution of powers between the Ministry of 
Finance and Česká národní banka to prepare and submit certain draft laws to the Government. The ECB understands that 
the proposed amendment is currently being discussed in the Government and that the wording of Article 52 of the draft 
law will be adjusted to reflect the final wording of the draft amendment. 
See, for example, ECB Opinion CON/2006/4 of 27 January 2006 at the request of the Central Bank of Cyprus on a draft 
law amending the Central Bank of Cyprus Laws of 2002 and 2003. 

5