Opinion of the European Central Bank of 27 October 2017 on payment services (CON/2017/44)
Date: 2017-10-27
Institutions: European Central Bank
Subjects: Cyprus, alternative dispute resolution, central bank, indemnification, national law, payment system

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 27 October 2017 

on payment services 

(CON/2017/44) 

Introduction and legal basis 

On 23 August 2017, the European Central Bank (ECB) received a  request from the Cypriot Minister for 

Finance for an opinion on three draft laws entitled (1) “The Provision and Use of Payment Services and 

Access  to  the  Payment  Systems  Law  of  2017”  (hereinafter,  the  ‘draft  payment  services  law’),  (2)  “The 

Electronic Money (Amending) Law of 2017” and (3) “The Business of Credit Institutions (Amending)(No.3) 

Law of 2017” (together with the draft payment services law, hereinafter collectively referred to as the ‘draft 

laws’).  

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 1, as 

certain  provisions  of  the  draft  laws  relate  to  the  Central  Bank  of  Cyprus  (CBC).  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 

1.1.  As stated in the explanatory note, the main aim of the draft laws is to harmonise Cypriot legislation 

with Directive (EU) 2015/2366 of the European Parliament and of the Council2.  

1.2.  The draft payment services law contains a provision 3 providing that no director, officer or employee 

of the CBC will bear any liability in the event that legal proceedings are initiated for compensation 

in  connection  with  an  act  or  omission  committed  during  the  exercise  of  powers  under  the  draft 

payment services law, unless it is proven that the act or omission was committed in bad faith or as 

a result of gross negligence. 

1.3.  The  draft  payment  services  law  removes  the  current  duty  of  the  CBC  of  organising  and  handling 

out-of-court dispute resolution processes. 

1  

2  

3  

Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

  Directive (EU) 2015/2366 of the European Parliament and of the Council  of 25 November 2015 on payment services 
internal  market  amending  Directives  2002/65/EC,  2009/110/EC  and  2013/36/EU  and  Regulation 

the 

in 
(EU) No 1093/2010, and repealing Directive 2007/64/EC (OJ L 337, 23.12.2015, p. 35). 
Article 108 of the draft payment services law. 

 
 
 
 
 
                                                 
 
ECB-PUBLIC 

2. 

General observations 

2.1.  This  opinion  does  not  address  whether 

the  draft 

laws  effectively 

implement  Directive 

(EU) 2015/2366 into Cypriot law. The focus of this opinion is on those provisions that may impact 

on the roles and tasks of the CBC as a central bank and as a member of the European System of 

Central Banks (ESCB). 

2.2.  The ECB notes that the draft laws do not confer any new tasks on the CBC by comparison to the 
Payment Services Law of 20094 currently in force in relation to payment service providers.  

2.3.  The  ECB  recalls  the  principle  of  financial  independence,  which  requires  that  the  Member  States 

must  not  put  the  national  central  banks  in  a  position  where  they  have  insufficient  financial 

resources to carry out their ESCB or Eurosystem-related tasks.  

3. 

Specific observations 

3.1.  The ECB notes that there is a change in the approach as  regards the CBC’s potential  liability for 

damages  caused  in  the  course  of  the  exercise  of  supervisory  powers  over  payment  service 
providers.  In  the  Payment  Services  Law  of  20095,  which  is  currently  in  force,  the  limitation  of 

liability is extended to any supervisory authority, and not only to directors, officers and employees 

of the supervisory authority. As noted in previous opinions, the Cypriot authorities should consider 

aligning  the  CBC’s  liability  under  the  draft  law  with  its  liability  concerning  its  supervision  of  credit 

institutions,  given  that  potential  liability  issues  could  represent  substantial  financial  risks  for  the 
CBC6. 

3.2.  The ECB notes that the draft payment services law removes the CBC’s current duty of organising 

and  handling  out-of-court  dispute  resolution  processes.  This  task  is  not  related  to  the  tasks 

conferred upon the ECB and national central banks in the ESCB by the Treaty and the Statute of 

the European System of Central Banks and of the European Central Bank. 

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

Done at Frankfurt am Main, 27 October 2017. 

[signed] 

The President of the ECB 

Mario DRAGHI 

4   
5  
6  

Law 128(I)/2009. 
Law 128(I)/2009. 
See,  for  example,  paragraphs  2.3.6  and  2.3.8  of  Opinion  CON/2017/3,  paragraph  3.4.7  of  Opinion  CON/2016/5, 
paragraph 3.1.7 of Opinion CON/2015/45 and paragraph 3.1.7 of Opinion CON/2015/37. 

2