Opinion of the European Central Bank of 11 May 2020 on amendments to Latvian national security, emergency situation and mobilisation laws (CON/2020/15)
Date: 2020-05-11
Institutions: European Central Bank
Subjects: legal basis

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 11 May 2020 

on amendments to Latvian national security, emergency situation and mobilisation laws 

(CON/2020/15) 

Introduction and legal basis 

On 9 April 2020 the European Central Bank (ECB) received a request from the Ministry of Finance of the 

Republic  of  Latvia  for  an  opinion  on  three  draft  laws:  (a)  a  draft  law  amending  the  Law  on  national 
security1; (b) a draft law amending the Law on emergency situations and states of exception2; and (c) a 
draft law amending the Law on mobilisation3. 

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 on the third  and fifth  indents  of Article  2(1) of Council Decision 
98/415/EC4, as the draft laws relate to the Latvijas Banka, and payment and settlement systems as well 

as to the specific tasks conferred upon the ECB concerning the prudential supervision of credit institutions 

pursuant to Article 127(6) of the Treaty. 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  Purpose of the draft law amending the Law on national security 

1.1.1  The  general  aim  of  the  draft  law  amending  the  Law  on  national  security  is  to  set  out  the  vital  or 

critical  services  which  are  important  for  the  functioning  of  the  State  and  the  public  and  to  ensure 

their continuity in case of a threat to national security. 

1.1.2  This  draft  law  amends  the  definition  of  ‘critical  infrastructure’  by  providing  that  a  critical 

infrastructure includes not  only  objects and systems located in Latvia, as already  provided by the 
current  wording  of  the  Law  on  national  security5,  but  also  services  provided  in  Latvia  which  are 

important  for  ensuring  the  carrying  out  of  important  public  functions,  human  health  protection, 

security,  economic  or  social  welfare,  the  destruction  of  or  interference  with  which  would 

significantly affect the carrying out of such State and public core functions. 

1.1.3  The  draft  law  adds  a  provision  that  the  owner  or  legal  possessor  of  a  critical  infrastructure, 

including a European critical infrastructure, must take the minimum measures necessary to ensure 

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Grozījumi Nacionālās drošības likumā.  
Grozījumi likumā “Par ārkārtējo situāciju un izņēmuma stāvokli”.  

Grozījumi Mobilizācijas likumā.  
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).  
See Article 22.1(1) of the Law on national security. 

 
 
 
 
 
                                                 
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security  and  operational  continuity.  The  existing  wording  of  the  Law  on  national  security  only 

provides that the owner or legal possessor of a critical infrastructure, including a European critical 

infrastructure,  must  ensure  planning  and  implementation  of  security  measures  and  operational 
continuity6. 

1.1.4  The  draft  law  includes  a  dedicated  new  section,  introducing  a  concept  of  ‘critical  financial  sector 

services’,  defined  to  include  cash  and  non-cash  settlement  services  provided  in  the  Republic  of 

Latvia by a credit institution licensed or registered in a European Union Member State. Thus, based 

on  the  amended  definition  of  ‘critical  infrastructure’,  which  under  the  draft  law  includes  not  only 

objects and systems located in Latvia, but also services provided in Latvia, critical financial sector 

services would be considered as part of a critical infrastructure. In order to ensure the availability of 

critical  financial  sector  services  in  case  of  a  threat  to  national  security,  a  credit  institution  must 

develop  an  operational  continuity  plan  stipulating  the  obligations  of  outsourced  service  providers 

used by the credit institution to ensure cash and non-cash settlements and must submit this plan to 

the Finanšu un kapitāla tirgus komisija (Financial and Capital Market Commission (FCMC)). 

1.1.5  Under the draft law, the FCMC establishes (a) the criteria for identifying credit institutions ensuring 

the  availability  of  critical  financial  sector  services  in  case  of  a  threat  to  national  security;  (b)  the 

minimum  scope  of  critical  financial  sector  services  in  case  of  a  threat  to  national  security;  and 

(c) the requirements for developing credit institutions’ operational continuity plans. 

1.1.6  The  FCMC,  in  cooperation  with  Latvijas  Banka,  will  (a) monitor  and  control  the  development  and 

implementation  of  credit  institutions’  operational  continuity  plans  in  case  of  a  threat  to  national 

security; and (b) evaluate the test results of credit institutions’ operational continuity plans.  

1.2  Purpose of the draft law amending the Law on emergency situations and states of exception 

1.2.1  The  general  aim  of  the  draft  law  amending  the  Law  on  emergency  situations  and  states  of 

exception is to ensure the continuity of the functioning of the State during emergency situations and 

states  of  exception,  providing  for  additional  restrictions  on  rights  to  be  imposed  during  a  state  of 

exception,  expanding  the  rights  of  the  Cabinet  of  Ministers  and  elaborating  on  the  procedure  for 

changing the appropriation of the State budget for the current year. 

1.2.2  The  draft  law  contains  provisions  related  to  the  withdrawal  of  cash  for  overcoming  a  threat  to 

national security. In particular, it provides that State institutions responsible for overcoming a threat 

to  national  security  may  receive  cash  from  the  Latvian  State  Treasury  account  in  Latvijas  Banka 

and  Latvijas  Banka  will  disburse  cash  to  such  institutions  within  the  limits  of  the  balance  of  the 

Latvian  State  Treasury  account  with  Latvijas  Banka.  The  abovementioned  institutions  shall  repay 

the unused cash to  Latvijas Banka, and Latvijas Banka shall accept  it  and credit it to the Latvian 

State Treasury account with Latvijas Banka. 

1.3  Purpose of the draft law amending the Law on mobilisation 

1.3.1  The general aim of the draft law amending the Law on mobilisation is to provide for exceptions for 

the  conscription  of  certain  officials  and  providers  of  critical  or  vital  services  into  active  military 

service. 

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See Article 22.1(4) of the Law on national security. 

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1.3.2  The  draft  law  specifically  provides  that  the  Governor,  Deputy  Governor  and  Members  of  the 

Council of Latvijas Banka as well as the Chairman and Members of the Council of the FCMC are 

exempt from conscription into active military service. 

1.3.3  The draft law also provides that depending on the type, intensity and nature of threats to the State, 

the Cabinet of Ministers may grant mobilisation exceptions to other officials, employees or persons 

having an  employment relationship  with a  person ensuring the continuity of critical infrastructures 

or critical financial sector services of the State and local government institutions. 

Observations  

2. 
2.1  The ECB notes that under Article 127(6) of the Treaty and Council Regulation (EU) No 1024/20137 
specific tasks concerning the prudential supervision of credit institutions have been conferred upon 

the  ECB.  In  particular,  the  ECB  carries  out  the  task  of  authorising  and  withdrawing  the 

authorisations of all credit institutions. For significant credit institutions the ECB also has the task, 

among others, to ensure compliance with relevant Union law imposing prudential requirements on 

credit  institutions,  including  the  requirement  to  have  in  place  robust  governance  arrangements, 
such  as  sound  risk  management  processes  and  internal  control  mechanisms8.  To  this  end,  the 

ECB  is  given  all  supervisory  powers  to  intervene  in  the  activity  of  credit  institutions  that  are 

necessary  for  the  exercise  of  its  functions.  As  previously  noted  by  the  ECB,  pursuant  to  the 

principle  of  sincere  cooperation  under  Article  4(3)  of  the  Treaty  on  European  Union,  the  Member 

States are obliged to assist the ECB in carrying out tasks which flow from the Treaties. This implies 

that  Member  States  should  refrain  from  taking  any  measures  which  could  jeopardise  the  ECB’s 

objectives. As the tasks related to critical financial sector services which the draft law amending the 

Law  on  national  security  assigns  to  the  FCMC  have  been  partially  conferred  upon  the  ECB,  the 

national legislative bodies might consider clarifying that the relevant provisions of that draft law are 

without  prejudice  to  the  tasks  and  powers  conferred  on  the  ECB  for  prudential  supervisory 
purposes under the Treaty and Regulation (EU) No 1024/2013 9.  

2.2  The ECB understands that the term ‘critical infrastructure’ under the draft law amending the Law on 

national  security  does  not  include  financial  market  infrastructures,  including  payment,  settlement 

and  clearing  systems  and  central  securities  depositories,  operated  and/or  overseen  by  Latvijas 

Banka,  whether  in  the  framework  of  the  Eurosystem  and  the  European  System  of  Central  Banks 

(ESCB),  or  otherwise.  The  ECB  understands  that  the  term  ‘critical  infrastructure’  under  that  draft 

law only includes physical objects, systems and parts thereof located in Latvia as well as services 

provided  in  Latvia  which  are  of  significance  for  ensuring  the  implementation  of  important  public 

functions, as well as human health protection, security, economic or social welfare and destruction 

of or interferences in the operation of which  would significantly  affect the implementation of State 
functions.  IT  systems  are  governed  by  the  Law  on  the  security  of  Information  Technologies 10, 

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Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank 
concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63).  

See Article 4(1)(e) and Article 6(4) of Regulation (EU) No 1024/2013. 
See  paragraphs  2.1  and  2.6  of  Opinion  CON/2020/2.  All  ECB  opinions  are  published  on  the  ECB’s  website  at 
www.ecb.europa.eu. 

Informācijas tehnoloģiju drošības likums. 

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which implements Directive (EU) 2016/1148 of the European Parliament and of the Council 11 into 

Latvian law. The ECB therefore understands that the only financial market activity covered by the 

definition  of  ‘critical  infrastructure’  under  the  draft  law  amending  the  Law  on  national  security 

comprises  ‘critical  financial  sector  services’,  consisting  of  cash  and  non-cash  settlement  services 

provided in Latvia by credit institutions licensed (registered) in a Union Member State. However, for 

the avoidance of doubt, the national legislative bodies might wish to consider explicitly clarifying in 

the  draft  law  that  the  term  ‘critical  infrastructure’  excludes  all  financial  market  infrastructures 

operated and/or overseen by the Latvijas Banka, whether in the framework of the Eurosystem and 

the ESCB, or otherwise. 

2.3  The ECB understands that the  draft law amending the Law on mobilisation  allows the Cabinet of 

Ministers  to  grant  mobilisation  exceptions  to  other  officials,  employees  and  persons  having  an 

employment relationship with entities which ensure the continuity of critical infrastructures or critical 

financial  sector  services  of  a  State  and  local  government  institutions,  depending  on  the  type, 

intensity and nature  of endangerment to the  State. The national legislative bodies might consider 

explicitly  clarifying  in  the  draft  law  that  officials,  employees  and  persons  having  an  employment 

relationship with Latvijas Banka who perform tasks required for continuity of critical financial sector 

services provided by credit institutions may also be granted mobilisation exceptions by the Cabinet 

of Ministers. 

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

Done at Frankfurt am Main, 11 May 2020. 

[signed] 

The President of the ECB 

Christine LAGARDE 

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Directive (EU) 2016/1148 of the European Parliament and of the Council of 6 July 2016 concerning measures for a 
high common level of security of network and information systems across the Union (OJ L 194, 19.7.2016, p. 1). 

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