CELEX: 51984PC0730
Language: en
Date: 1985-01-24
Title: PROPOSAL FOR A COUNCIL DIRECTIVE ON THE FREEDOM OF ESTABLISHMENT AND THE FREE SUPPLY OF SERVICES IN THE FIELD OF MORTGAGE CREDIT

No C 42/4                           Official Journal of the European Communities                                14.2.85
                                                             II
                                                    (Preparatory Acts)
                                              COMMISSION
             Proposal for a Council Regulation concerning the application of Decision No . . ./85 of
             the ACP-EEC Council of Ministers on transitional measures to be applied until the entry
                                      into force of the third Lome Convention
                                                     COM(85)      7final
                          (Submitted by the Commission to the Council on 18 January 1985)
                                                      (85/C 42/05)
THE COUNCIL OF THE EUROPEAN                                      of Article 188 (3) of the said Convention, the
COMMUNITIES,                                                     transitional measures to be applied from 1 March
                                                                  1985 until the entry into force of the third ACP-EEC
Having regard to the Treaty establishing the                      Convention;
European Economic Community, and in particular
Article 238 thereof,                                             Whereas the measures required to implement that
                                                                  Decision should be taken,
Having regard to the proposal from the Commission,
                                                                  HAS ADOPTED THIS REGULATION:
Having regard to the opinion of the European Par-
                                                                                         Article 1
liament,
Whereas the ACP—EEC Convention signed at Lome                     Decision No . . ./85 of the ACP-EEC Council of
on 31 October 1979 (') expires on 28 February 1985;               Ministers annexed to this Regulation shall apply in
                                                                  the Community with effect from 1 March 1985 until
Whereas the third ACP—EEC Convention signed at                    28 February 1986 at the latest, without prejudice to
Lome on 8 December 1984 cannot enter into force on                the more favourable unilateral provisions which the
the same date;                                                    Community will be adopting in respect of imports af
                                                                  ACP products.
Whereas the Committee of Ambassadors established
by the second ACP—EEC Convention af Lome has                                              Article 2
adopted, under the powers delegated to it by
Decision No 7/84 of the A C P - E E C Council of                  This Regulation shall enter into force on 1 March
Ministers of 19 December 1984 and by virtue                        1985.
                                                                  It shall be binding in its entirety and        directly
O OJ No L 347, 22. 12. 1980, p. 2.                                applicable in all Member States.
              Proposal for a Council Directive on the freedom of establishment and the free supply of
                                         services in the field of mortgage credit
                                                    COM(84)      730final
                           (Submitted by the Commission to the Council on 4 February 1985)
                                                       (85/C 42/06)
THE COUNCIL OF THE EUROPEAN                                        Having regard to the proposal from the Commission,
 COMMUNITIES,
                                                                   Having regard to the opinion of the European Par-
 Having regard to the Treaty establishing the                      liament,
 European Economic Community, and in particular                    Having regard to the opinion of the Economic and
Articles 57 (2) and 66 thereof,                                    Social Committee,
 ---pagebreak--- 14. 2. 85                            Official Journal of the European Communities                            No C 42/5
Whereas, pursuant to the Treaty, any discriminatory             Whereas, in order to ensure that the introduction of a
or restrictive treatment with regard to establishment           new funding or lending technique on the market for
and to the provision of services, based either on               mortgage credit in a Member State does not give rise
nationality or on the fact that an undertaking is not           to a distortion of the conditions of competition, that
established in the Member States where the services             Member State must in such situations allow credit
are provided, is prohibited from the end of the                 institutions working in the same field in its territory,
transitional period;                                            in whatever form they are established, to operate
                                                                mortgage credit under similar conditions;
Whereas, pursuant to the Treaty, with reference to
Articles 52 and 59, the prohibition of any restrictive          Whereas, pending the achievement of complete
treatment with regard to freedom of establishment               freedom of capital movements, Member States may
and the freedom to supply services means that all               require matching between assets and liabilities of the
undertakings have the right to establish themselves             currencies related to mortgage credit operations;
and to provide services on the whole territory of the           whereas they must at all events allow the possibility of
Community;                                                      conducting such operations in ECU;
Whereas, in order to facilitate the effective exercise of       Whereas, at all events, the effective exercise of the
such freedom in the field of credit institutions, the           activities mentioned in the Directive requires the
Council adopted Directive 77/780/EEC of 12                      removal of some of the existing restrictions on capital
December 1977 on the coordination of laws, regu-                movements; whereas a specific directive will deal with
lations and administrative provisions relating to the           such restrictions;
taking up and pursuit of the business of credit
institutions (x) which has secured a first approx-
imation of the laws of the Member States as regards             Whereas, any type of State intervention or other
the rules to which these institutions are subject;              public assistance related to the granting of mortgage
                                                                credit must be granted in a non-discriminatory way,
                                                                so as to be equally applicable to transactions
Whereas, however, there are still obstacles standing in         undertaken within the framework of this Directive;
the way of the exercise of freedom of establishment
and freedom to supply services by credit institutions
operating mortgage credit;                                      Whereas, pending further coordination of the
                                                                supervisory regulations, branches of mortgage credit
                                                                institutions having their head office in another
Whereas, these obstacles arise, on the one hand, from           Member State will be supervised by the competent
the prohibition on the granting of credit on mortgage           authorities of the host country in close cooperation
on real property situated in another Member State               with the competent authorities of the home country;
and, on the other hand, from the differences in
conditions under which such credit institutions in the
various Member States are allowed to undertake                  Whereas, however, with respect to the supply of
mortgage credit activity;                                       cross-border services and in accordance with the
                                                                principle of home country control, the supervision of
                                                                those credit institutions will be entrusted to the
Whereas the elimination of such obstacles can be                supervisory authority of the home country; whereas
achieved by making it possible to grant mortgage                the institution providing services must comply with
credit secured on real property situated in a Member            the legal provisions in force in the host country which
State other than the home Member State and by                   are justified on the grounds of the general good;
making it possible to operate mortgage credit in a
host Member State in accordance with the specific
lending and funding techniques authorized in the                Whereas, the surveillance of such provisions must rest
home Member State;                                              with the supervisory authority of the host country,
                                                                which requires close cooperation between that
                                                                authority and the competent authority of the home
Whereas, the implementing of such a possibility                 country for comprehensive supervision of the relevant
implies the adoption of the principle, by the                   transactions;
supervisory authorities, of the mutual recognition of
the supervisory regulations which monitor the
financial soundness of the relevant mortgage credit             Whereas, taking into account the fact that the
institutions;                                                   supervisory authorities do not have sufficient
                                                                experience with regard to surveillance of transactions
                                                                conducted abroad by mortgage credit institutions, it is
                                                                appropriate, for a transitional period, to allow them
O OJ No L 322, 17. 12. 1977, p. 30.                             to limit the volume of such transactions,
 ---pagebreak--- No C 42/6                            Official Journal of the European Communities                                  14.2.85
HAS ADOPTED THIS DIRECTIVE:                                                               Article 5
                                                                1.      Each Member State shall allow within its
                                                                territory a credit institution, as referred to in Article 1,
                         TITLE I
                                                                having its head office in another Member State, to
                  Definitions and scope                         fund and, in particular, refinance itself subject to the
                                                                provisions of paragraph 2, according to the
                                                                techniques of financing which are authorized in its
                                                                home Member State, in order to grant loans secured
                         Article 1                              by mortgage for the purposes referred to in Article 1.
This Directive applies to the credit institutions falling
                                                                Where the introduction of such new techniques in a
within the ambit of Directive 77/780/EEC, the
                                                                Member State gives rise to distortion of the
activities of which consist in receiving funds from the
public collected in the form of deposits or the                 conditions of competition in that Member State, that
proceeds from mortgage bonds or reimbursable shares             Member State shall authorize all credit institutions
and in granting loans to the public secured by                  established in its territory to adopt similar techniques
mortgage on real property for the purpose of                    or take equivalent measures.
acquiring or retaining property rights in building land
or in existing or projected buildings or for renovating         2.      Pending further coordination relating to bonds
or improving buildings.                                         secured by mortgage, the host Member State may
                                                                require that issues of such bonds in its territory shall
                                                                be in conformity with the relevant provisions in force
                                                                in that Member State.
                         Article 2
For the purposes of this Directive:                                                       Article 6
                                                                The host Member State may require that both
— 'home Member State' shall mean the Member                     funding and lending transactions be in its currency;
    State where a credit institution as referred to in          the institution in question may however always use
    Article 1 has its head office;                              the ECU as an" alternative. The home Member State
                                                                may require matching between assets and liabilities in
                                                                each national currency; the institution in question
— 'host Member State' shall mean the Member State               may however always choose to meet the matching
    where a credit institution as referred to in Article 1      requirement in ECU.
    has a branch or into which it supplies services.
                                                                                          Article 7
                         TITLE II                                In cases of State intervention or other public
                                                                 assistance of any type in the field of mortgage credit
General provisions to facilitate exercise of the right of       related activities, including the saving of funds with
      establishment and the right to supply services             and the granting of mortgage credits by credit
                                                                 institutions as referred to in Article 1, similar
                                                                 measures shall apply to transactions undertaken
                         Article 3                              within the scope of this Directive. Such measures shall
                                                                be non-discriminatory as between nationals of
Member States shall authorize credit institutions as             Member States.
referred to in Article 1 to grant mortgage credit
secured by mortgages on real property situated in
another Member State.                                                                     TITLE III
                                                                   Provisions relating to the freedom of establishment
                         Article 4
                                                                                          Article 8
Member States shall repeal all legal or administrative
provisions preventing or obstructing a credit                    Until the conditions for home country control are
institution, as referred to in Article 1, having its head        fulfilled, supervision of any form of establishment in
office in their territory, from operating mortgage               another Member State of a credit institution, as
credit in another Member State in accordance with                referred to in Article 1, shall be exercised by the
techniques specifically authorized within its home               supervisory authority of that host Member State in
Member State, or shall so amend such provisions as               close cooperation with the supervisory authority of
to make the operation of such techniques possible.               the home Member State.
 ---pagebreak--- 14. 2. 85                             Official Journal of the European Communities                             No C 42/7
                         TITLE IV                                2.     If the supervisory authority of a host Member
                                                                 State ascertains that an institution providing services
    Provisions relating to freedom to supply services            into its territory is not complying with the legal
                                                                 provisions in force in that Member State which are
                                                                 justified on the grounds of the general good, that
                          Article 9
                                                                 authority shall request the institution concerned to
1.    A credit institution, as referred to in Article 1,         put an end to the irregular situation.
wishing to extend its activities by way of the exercise
of freedom to supply services in the field of mortgage
                                                                 3.     If the institution concerned fails to take the
credit into the territory of another Member State,
                                                                 necessary steps, the supervisory authority of the host
shall give notification thereof to the supervisory
                                                                 Member State shall inform the supervisory authority
authority of the home Member State which has
                                                                 of the home Member State accordingly. The
granted the authorization pursuant to Article 3 of
                                                                 authority of the home Member State shall take all
Directive 77/780/EEC.
                                                                 appropriate measures to ensure that the institution
                                                                 concerned puts an end to the irregular situation. The
2.     Member States shall require the notification to           nature of those measures shall be communicated to
be accompanied by the following information from                 the authority of the host Member State.
the credit institution concerned:
(a) the Member State into whose territory it intends             4.     If, despite the measures taken by the home
     to supply services;                                         Member State pursuant to paragraph 3, or because
                                                                 such measures prove inadequate or are lacking in the
(b) the types of business it intends to carry out on the         Member State in question, the institution persists in
     territory of that host Member State;                        violating the legal rules referred to in paragraph 2 in
                                                                 force in the host Member State, the latter State may,
                                                                 after informing the supervisory authority of the home
(c) the general and specific conditions under which
                                                                 Member State, take appropriate measures to prevent
     funds will be received and loans granted.                   further irregularities, including, in so far as it is
                                                                 strictly necessary, the prevention of the further
3.     Where the supervisory authority of the home               conclusion of mortgage contracts by that institution
Member State confirms the financial soundness of the             by way of provision of services within its territory.
credit institution concerned, it shall, within three             The Member States shall ensure that within their
months of the notification referred to in paragraph 1,           territory it is possible to serve the legal documents
send the information mentioned in paragraph 2 to the             necessary for these measures.
supervisory authority of the host country, together
with a declaration assessing the financial situation of
the credit institution.                                          5.     Any measure adopted pursuant to paragraphs 2,
                                                                 3 and 4 involving penalties or restrictions on the
                                                                 provision of services must be properly justitified and
4.     Where the supervisory authority of the home               communicated to the institution concerned. Every
Member State refuses to confirm the financial                    such measure shall be subject to the right to apply to
soundness of a credit institution, reasons shall be              the courts in the Member State in which the auth-
given to the institution concerned within three                  orities adopted it.
months of receipt of the information mentioned in
paragraph 2.
                                                                 6.     In the event of withdrawal of authorization the
5.     Before the credit institution commences its               supervisory authority of the host Member State shall
activities the supervisory authority of the host country         be informed of such action and shall take appropriate
shall, within a period of three months following                 measures to prevent the institution concerned from
receipt of the information and of the declaration                continuing to conclude mortgage contracts by way of
mentioned in paragraph 3, prepare for the constant               provision of services within the territory of that State.
supervision of the credit institution pursuant to
Article 10.
                                                                 7.     Every two years the Commission shall submit to
                                                                 the Council a report summarizing the number and
                         Article 10                              type of cases in which, in each Member State,
                                                                 decisions recording non-confirmation of financial
1.     A credit institution exercising freedom to supply         soundness have been communicated under Article 9
services into the territory of another Member State              or measures have been taken in accordance with the
shall report quarterly on its operations in the host             provisions of paragraph 4. Member States shall
Member State to the supervisory authority of that                cooperate with the Commission by providing it with
Member State.                                                    the information required for this report.
 ---pagebreak--- No C 42/8                           Official Journal of the European Communities                            14.2.85
                         TITLE V                                                      Article 12
            Transitional and final provisions                  1.     Member States shall bring into force the
                                                               measures necessary to comply with this Directive by
                                                               . . .. They shall forthwith inform the Commission
                         Article 11                            thereof.
The home Member State may, for a maximum period                2.     Member States shall communicate to the
of five years after notification of this Directive limit       Commission the texts of the main laws, regulations
the transactions of a credit institution in the field of       and administrative provisions which they adopt in the
mortgage credit carried on either through branches in          field covered by this Directive.
other Member States or by way of the provision of                                     Article 13
services to 25 % of the total mortgage lending of the
relevant credit institution.                                   This Directive is addressed to the Member States.