Opinion of the European Central Bank of 5 December 2011 on representation and the payment of quota shares in the International Monetary Fund (CON/2011/97)
Date: 2011-12-05
Institutions: European Central Bank
Subjects: Estonia, International Monetary Fund, central bank, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 5 December 2011 

on representation and the payment of quota shares in the International Monetary Fund 

(CON/2011/97) 

Introduction and legal basis 

On  22  November  2011,  the  European  Central  Bank  (ECB)  received  a  request  from  Riigikogu  (the 

Parliament of Estonia) for an opinion on a draft law on amendments to legislation governing aspects of 
International Monetary Fund (IMF) membership1 (hereinafter the ‘draft law’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning of the European Union 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  provisions2,  as  the  draft  law  relates  to  Eesti  Pank.  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 laws 

The  draft  law  regulates  Eesti  Pank’s  role  in  relation  to  Estonia’s  IMF  membership.  Eesti  Pank  was 

involved in the legislative process and agrees with the transfer of Estonia’s IMF-related responsibilities 

from the Estonian Government to Eesti Pank. According to the draft law, among other things, Eesti Pank 

will represent Estonia in the IMF and be responsible for paying Estonia’s quota share in the IMF and any 

quota increases. 

2. 

General observations  

2.1  As regards representation under the draft law, the ECB notes that Eesti Pank will be authorised to 

represent  Estonia  in  the  IMF  subject  to  coordination  with  the  Ministry  of  Finance  and  in  other 

international  organisations  upon  governmental  authorisation.  Pursuant  to  Articles  23  and  31.1  of 

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

national  central  banks  are  allowed  to  establish  relations  with  international  organisations  and 

perform transactions in fulfilment of their obligations towards international organisations.  

1  

2  

The Law on incurring and implementing proprietary obligations related to the membership of the Republic of Estonia in 
international organisations (Riigi Teataja I 2002, 11, 58), Decision of the Parliament ‘Consent given to accession of the 
Republic  of  Estonia  to  the  IMF,  IBRD  and  their  affiliated  organisations’  (Riigi  Teataja  1992,  18,  258;  Riigi  Teataja  I 
2002, 11, 58) and the Law on Eesti Pank (Riigi Teataja I 1993, 28, 498). 
OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
 
                                                 
ECB-PUBLIC 

2.2  As  regards  financial  obligations,  the  draft  law  provides  the  legal  basis  for  Eesti  Pank  to  act  in 

accordance  with  Article  V  of  the  Articles  of  Agreement  of  the  International  Monetary  Fund  and 

Article  III,  Section  2,  of  the  Articles  of  Agreement  of  the  International  Bank  for  Reconstruction 

and Development and to execute all operations and transactions provided for by these Articles of 

Agreement  in  Estonia’s  name.  Accordingly,  Eesti  Pank  will  make  payments  related  to  Estonia’s 

IMF membership and any additional quota increase. The ECB notes that any quota increase will be 

subject to the consent of Riigikogu. 

2.3  Several opinions3 have stated that the tasks performed by a national central bank must comply with 

the  monetary  financing  prohibition  under  Article  123  of  the  Treaty  and  with  Council  Regulation 

(EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions 
referred to in Articles 104 and 104b(1) of the Treaty4. Pursuant to Article 7 of Regulation (EC) No 

3603/93, the financing by national central banks of obligations falling upon the public sector vis-à-

vis  the  IMF  is  not  regarded  as  a  credit  facility  within  the  meaning  of  Article 123  of  the  Treaty. 

Recital  14  of  Regulation  3603/93  sets  out  the  rationale  of  the  exemption  and  confirms  that  it  is 

appropriate to authorise the financing by the national central banks of obligations falling upon the 

public sector vis-à-vis the IMF, as this financing results in claims which have all the characteristics 

of reserve assets. Therefore, the ECB finds that the obligations assumed by Eesti Pank in relation to 

Estonia’s  IMF  membership  comply  with  Article  7  of  Regulation  (EC)  No  3603/93  and  do  not 

infringe the monetary financing prohibition. 

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

Done at Frankfurt am Main, 5 December 2011. 

[signed] 

The President of the ECB 

Mario DRAGHI 

3  

4  

See  the  most  recent  opinions,  CON/2011/68  and  CON/2011/89.  All  opinions  are  published  on  the  ECB’s  website  at 
www.ecb.europa.eu. 
OJ L 332, 31.12.1993, p. 1. 

2