Opinion of the European Central Bank of 20 February 2023 on the designation of the Central Bank of Cyprus as a competent authority for the implementation of Union legal acts (CON/2023/5)
Date: 2023-02-20
Institutions: European Central Bank
Subjects: legal basis

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 20 February 2023  

on the designation of the Central Bank of Cyprus as a competent authority for the implementation  

of Union legal acts 

(CON/2023/5) 

Introduction and legal basis 

On 10 January 2023 the European Central Bank (ECB) received a request from the Ministry of Finance of 

the Republic of Cyprus for an opinion on a Law amending the Central Bank of Cyprus Laws 2002 to 20171 

(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/EC2, as 

the  draft  law  relates  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 law 

1.1  The draft law provides that the Minister for Finance may, after obtaining the CBC’s consent, issue a 

notification to be published in the Official Gazette of the Republic, designating and authorising the 

CBC as the competent authority for the implementation of any Union legal act.  

1.2  The draft law further provides that where the CBC is designated as the competent authority for the 

implementation of a Union legal act, it will have the power, in case of non-compliance with such legal 

act, to impose administrative sanctions and take administrative measures provided for in that legal 

act.  

2. 

General observations  

2.1  The ECB understands that, in principle, the effective implementation of directly applicable Union legal 

acts,  such  as  regulations  and  decisions,  is  ensured  through:  (i)  the  designation  of  the  authority 

competent  for their  implementation; (ii) the penalisation of  breaches; and (iii) the conferral on the 

designated competent authority of the administrative powers necessary for it to meet its obligations 

in relation to the implementation of such Union legal acts, which may be used, for example, in case 

of non-compliance. 

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οι περί της Κεντρικής Τράπεζας της Κύπρου Νόμοι του 2002 έως 2017. 
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). 

 
 
 
 
 
 
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2.2  The ECB further understands that the power of the Minister for Finance to designate a competent 

authority for the implementation of Union legal acts derives from the Constitution of the Republic of 

Cyprus3,  which  provides  for  the  members  of  the  Council  of  Ministers’  general  power  to  exercise 

executive powers that are relevant to the respective ministry’s tasks.   

2.3  Furthermore, the  ECB understands that,  under Cypriot law4, except where otherwise provided by 

law, regulatory administrative act or decision of the executive power, each ministry and independent 
authority is responsible for ensuring the implementation in Cyprus of Union regulations and decisions 

that  fall  within  the  ministry’s  or  the  independent  authority’s  tasks,  in  accordance  with  the  Cypriot 

Constitution, the laws, the regulatory administrative acts and the decisions of the executive power of 

the Republic of Cyprus. Based on this provision of Cypriot law, the ECB understands that the draft 

law concerns only Union regulations and decisions that are relevant to the CBC’s existing tasks and 

responsibilities. 

2.4  Finally,  based  on  the  foregoing  and  on  the  assumption  that  the  designation  of  the  CBC  as  a 

competent authority is limited to Union legal acts that fall under the CBC’s tasks and responsibilities, 

the ECB understands that the draft law does not confer any new task on the CBC. The ECB notes 

that the CBC has already been designated as the competent authority for the implementation of other 

relevant Union acts 5. 

3. 

Specific observations   

3.1  The  draft  law  refers  to  ‘European  Union  acts’,  which  is  understood  to  cover  Union  regulations, 

directives  and  decisions.  In  light  of  this  and  considering  that  not  all  Union  legal  acts  require  the 

designation of a national competent authority responsible for their implementation in a Member State 

and  the  imposition  of  sanctions  in  case  of  non-implementation,  the  ECB  invites  the  consulting 

authority to clarify which types of Union legal acts the general term ‘European Union acts’ covers.  

3.2  For the sake of legal certainty and transparency, the ECB suggests that the proposed wording of the 

new provision of the draft law authorising the Minister for Finance to designate the CBC as competent 

authority for the implementation of Union legal acts6 should be amended to explicitly clarify that this 

task  will  only  concern  Union  legal  acts  that  are  relevant  to  the  CBC’s  existing  tasks  and 

responsibilities 7.  

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6  
7  

See Article 58 of the Constitution of the Republic of Cyprus. 
See Article 4 of the Implementation of Union Regulations and Union Decisions Law (Law 78(I)/2007). 

For example, as concerns credit institutions, the CBC was recently designated, through a notification of the Minister 
for  Finance  published  in  the  Official  Gazette  of  the  Republic  (K.D.P.  420/2022)  as  a  competent  authority  for  the 
implementation of Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on a 
pan-European Personal Pension Product (PEPP) (OJ L 198, 25.7.2019, p.1).  
See Article 2 of the draft law (inserting a new Article 7A into the Central Bank of Cyprus Laws of 2002 to 2017).  
Such an amendment would also ensure that the text of the new Article 7A of the Central Bank of Cyprus Laws would 
be aligned with the provisions of Article 4 of the Implementation of of Union Regulations and Union Decisions Law 
(Law 78(I)/2007).  

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3.3  The ECB understands that within the Cypriot legal framework the range of administrative sanctions 

that competent authorities  may impose is specified in Union regulations  and/or  national  law. 8 For 

consistency purposes, the ECB suggests that the draft law’s proposed wording authorising the CBC 

to impose the administrative sanctions and administrative measures provided for in Union legal acts 

for  the  implementation  of  which  the  CBC  is  designated  as  the  competent  authority9  should  be 

amended  to  explicitly  clarify  that  the  CBC  may  impose  such  administrative  sanctions  and 

administrative  measures,  within  the  range  specified  in  Union  and/or  national  law,  to  the  extent 

relevant to the CBC’s tasks and responsibilities. 

This opinion will be published on EUR-Lex.  

Done at Frankfurt am Main, 20 February 2023. 

[signed] 

The President of the ECB 

Christine LAGARDE 

8  

9  

For instance, there are Union regulations that provide that Member States must lay down the rules on appropriate 
administrative penalties, which must be effective, proportionate and dissuasive, without specifying maximum amounts; 
in such cases the range of administrative sanctions is to be specified in national law. See, for example, Regulation 
(EU) 2021/1230 of the European Parliament and of the Council of 14 July 2021 on cross-border payments in the Union 
(OJ L 274, 30.7.2021, p. 20). 
See Article 2 (presumably intended to be Article 3) of the draft law (adding a new Article 66A(3) of the Central Bank of 
Cyprus Laws of 2002 to 2017).  

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