Opinion of the European Central Bank of 31 July 2008 at the request of the Belgian Ministry of Finance on a draft law establishing, inter alia, an audit committee in listed companies and in financial undertakings and on a draft law on reinsurance (CON/2008/33)
Date: 2008-07-31
Institutions: European Central Bank
Subjects: Belgium, activity report, audit, central bank, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 31 July 2008  

at the request of the Belgian Ministry of Finance 

on a draft law establishing, inter alia, an audit committee in listed companies and in financial 

undertakings and on a draft law on reinsurance 

(CON/2008/33) 

Introduction and legal basis 

On  18  July  2008  the  European  Central  Bank  (ECB)  received  a  request  from  the  Nationale  Bank  van 

België/Banque Nationale de Belgique (NBB), acting on behalf of the Belgian Ministry of Finance, for an 

opinion on the following two draft laws (hereinafter together the ‘draft laws’): (i) a draft law establishing, 

inter alia, an audit committee in listed companies and in financial undertakings (hereinafter the ‘draft law 

on the audit committee’); and (ii) a draft law on reinsurance (hereinafter the ‘draft law on reinsurance’).  

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

European Community and the third indent 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 laws relate to the NBB. This opinion only deals with the provisions of the draft 

laws amending the Law of 22 February 1998 establishing the Organic Statute of the Nationale Bank van 

België/Banque Nationale de Belgique. 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 on the audit committee 

1.1  The draft law on the audit committee  is intended to transpose into Belgian law the provisions of 

Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory 

audits  of  annual  accounts  and  consolidated  accounts,  amending  Council  Directives  78/660/EEC 
and 83/349/EEC and repealing Council Directive 84/253/EEC2, that have not yet been transposed: 

Articles 38 and 41 and Article 42(1).  

1.2 

In order to transpose the obligation for public-interest entities to have an audit committee3, the draft 

law  on  the  audit  committee  provides  that  the  NBB’s  Board  of  Censors,  in  addition  to  its  current 

task,  will  be  the  NBB’s  audit  committee  and  in  this  capacity  perform  the  tasks  entrusted  to  the 

1  
2 
3  

OJ L 189, 3.7.1998, p. 42.  
OJ L 157, 9.6.2006, p. 87. 
Article 41 of Directive 2006/43/EC. 

 
 
 
 
                                                 
 
NBB’s audit committee4 listed in the draft law5. The ECB understands that the Board of Censors is 

an NBB body composed of 10 members currently entrusted with supervising the preparation and 
implementation  of  the  budget6  and  that  the  NBB’s  general  meeting  of  shareholders  elects  its 
members amongst persons with special qualifications in supervisory procedures7. The Explanatory 

Memorandum to the draft law on the audit committee explains that it is not possible to create the 

audit committee within the NBB’s Board of Directors as all its members are executive members. It 

was on the other hand considered logical to set up the audit committee within the NBB’s Board of 

Censors given that it is already entrusted with supervising the preparation and implementation of 

the NBB’s budget and given the existing requirement for censors to be appointed among persons 

with special qualifications in supervisory procedures. Furthermore, the NBB’s General Meeting of 

shareholders elects censors which also complies with Directive 2006/43/EC.  

1.3  According to Article 24(1) of the draft law on the audit committee, the NBB’s audit committee is 

entrusted with the following advisory tasks as a minimum, without prejudice to the statutory tasks 

of  the  NBB’s  bodies:  (i)  monitoring  the  financial  reporting  process;  (ii)  monitoring  the 
effectiveness of the NBB’s internal control and risk management systems and the internal audit8; 

(iii) monitoring the statutory audit of the annual accounts, including compliance with the statutory 

auditor’s  questions  and  recommendations;  and  (iv)  reviewing  and  monitoring  the  statutory 

auditor’s independence, and in particular their provision of additional services to the NBB. In this 

latter  respect,  the  statutory  auditor  is  required  to  confirm  annually  to  the  audit  committee  their 
independence  and  to  disclose  any  additional  service  provided  to  the  NBB9.  The  statutory  auditor 

also  discusses  with  the  audit  committee  any  threats  to  their  independence  and  the  safeguards 
applied  to  mitigate  those  threats  as  documented  in  the  audit  documents10.  Finally,  the  audit 

committee has an advisory competence in the tender procedure for appointing the NBB’s statutory 

auditor  and,  following  such  procedure,  makes  a  proposal  to  the  Board  of  Directors  for  the 
appointment of the statutory auditor11.  

2. 

Specific comments concerning the draft law on the audit committee 

2.1  The ECB welcomes the draft law on the audit committee as a further contribution to strengthening 

the  NBB’s  governance  framework.  The  ECB  nevertheless  considers  it  advisable  for  the  internal 

allocation of tasks within the Board of Censors to be organised so as to mitigate the risk of conflict 

between its supervision of the preparation and implementation of the budget and the tasks entrusted 

4  
5 
6  
7  
8  

9  
10  
11  

Article 23 of the draft law on the audit committee, amending Article 21 of the Law of 22 February 1998. 
Article 24 of the draft law on the audit committee, inserting Article 21 bis in the Law of 22 February 1998. 
Article 21 of the Law of 22 February 1998. 
Article 23(4) of the Law of 22 February 1998. 
According to Article 24(3) of the draft law on the audit committee, without prejudice to their obligation to report to the 
NBB’s bodies, the NBB’s statutory auditor also reports to the audit committee on key matters arising from the statutory 
audit, and in particular on material weaknesses in internal controls in the financial reporting process. 
Article 24(4) of the draft law on the audit committee, inserting Article 21 bis (4) in the Law of 22 February 1998. 
Article 24(4) of the draft law on the audit committee, inserting Article 21 bis (4) in the Law of 22 February 1998. 
Article 24(2) of the draft law on the audit committee, inserting Article 21 bis (2) in the Law of 22 February 1998. 

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to it by the draft law on the audit committee in its capacity as audit committee. Relevant provisions 

for  this  purpose  could  for  instance  be  set  out  in  the  NBB’s  Rules  of  Procedure  referred  to  in 

Article 24(5) of the draft law on the audit committee. 

2.2  According to the Explanatory Memorandum to the draft law on the audit committee, the Council of 

the  European  Union,  on  a  recommendation  by  the  ECB’s  Governing  Council,  must  approve  the 

appointment of the NBB’s statutory auditor. The ECB would welcome a reference in the text of the 

draft law to these ECB and Council competences under Article 27.1 of the Statute of the European 

System of Central Banks and of the European Central Bank, similarly to the reference to the Works 

Council’s competence in Article 24(2). In particular, the ECB considers that the draft law should 

clarify that the audit committee’s tasks and activities may interfere neither with the performance of 
the NBB’s ESCB-related tasks nor with their review by the NBB’s statutory auditor12. 

2.3  The  ECB  understands  that  when  reviewing  and  monitoring  the  independence  of  the  statutory 

auditor  under  Article  21  bis  (1)(d)  of  the  Law  of  22  February  1998  and  advising  on  the  tender 

procedure for appointing the statutory auditor, the NBB’s audit committee will take account of the 

Eurosystem’s good practice in selecting and mandating external auditors.  

3. 

Purpose of the draft law on reinsurance and specific comments 

3.1  The draft law on reinsurance is intended to transpose into Belgian law Directive 2005/68/EC of the 

European  Parliament  and  of  the  Council  of  16  November  2005  on  reinsurance  and  amending 
Council Directives 73/239/EEC, 92/49/EEC as well as Directives 98/78/EC and 2002/83/EC13. In 

this  context,  the  draft  law  on  reinsurance  adds  the  authorities  responsible  for  supervising 

reinsurance  undertakings  to  the  list  of  supervisory  authorities  to  which  the  NBB  is  allowed  to 

communicate information covered by professional secrecy under the first paragraph of Article 35 
of the Law of 22 February 1998 if such information is necessary for their supervisory function14. 

3.2  The ECB has no specific comments on this provision of the draft law on reinsurance. 

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

Done at Frankfurt am Main, 31 July 2008. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

12  

13 
14 

See paragraph 3.2 of ECB Opinion CON/2006/44 of 25 August 2006 at the request of the Banca d’Italia on the amended 
Statute of the Banca d’Italia. 
OJ L 323, 9.12.2005, p. 1. 
Article 143 of the draft law on reinsurance, amending Article 35 of the Law of 22 February 1998. 

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