Powers of the ECB to impose sanctions
The European Central Bank (ECB) operates the Union's monetary policy in pursuit of its primary objective of maintaining price stability in the euro zone. To that end it adopts mandatory monetary policy guidelines for national central banks. This Regulation defines to what extent the European Central Bank (ECB) is entitled to impose fines or periodic penalty payments on undertakings for failure to comply with its regulations and decisions. It ensures uniform and effective imposition of sanctions through full collaboration with the ECB by the national central banks of the euro area.
Council Regulation (EC) No 2532/98 of 23 November 1998 concerning the powers of the European Central Bank to impose sanctions [Official Journal L 318 of 27.11.1998, Corrigendum: Official Journal L 234 of 04.09.1999].
Aim. The Regulation is necessary in order to give practical effect to Article 34.3 of the Statute of the European System of Central Banks (ESCB), which provides that, within the limits and under the conditions adopted by the Council, the ECB is entitled to impose fines or periodic penalty payments on undertakings for failure to comply with its regulations and decisions.
Definitions. "Undertakings" means "those natural or legal persons, private or public, with the exception of public persons in the exercise of their public powers, in a participating Member State, which are the subject of obligations arising from ECB regulations and decisions" and includes "branches or other permanent establishments located in a participating Member State, the head office or registered office of which is outside a participating Member State".
Sanctions. The fines and periodic penalty payments imposed by the ECB are subject to the following limits:
- fines: the upper limit is EUR 500 000;
- periodic penalty payments: the upper limit is EUR 10 000 per day of infringement. Periodic penalty payments may be imposed in respect of a maximum period of six months following the notification of the decision to the undertaking.
The decision on the appropriate sanction is based on the principle of proportionality. The ECB therefore takes into consideration:
- the good faith and the degree of openness of the undertaking in the interpretation and fulfilment of the obligation arising from an ECB regulation or decision and the degree of cooperation shown;
- the seriousness of the infringement;
- the repetition, frequency or duration of the infringement;
- the profits obtained by the undertaking;
- the economic size of the undertaking;
- sanctions imposed by other authorities on the same undertaking for the same infringement.
Decision-making powers. Under the Regulation, the Executive Board of the ECB has the power to decide whether an infringement has occurred and whether sanctions should be imposed; however, the national central banks may initiate and also conduct part of the infringement procedure. The ECB and the national central bank have the right to:
- require the submission of documents;
- examine the books and records of the undertaking and take copies;
- obtain written or oral explanations.
The undertaking has thirty days in which to present its defence.
Having consulted the national central bank that initiated the procedure, the Executive Board of the ECB must adopt a decision.
Notification of the decision must be given to the undertaking, to relevant supervisory authorities and to the national central bank. The undertaking concerned may request a review of the decision by writing to the Governing Council within thirty days of the original decision.
The Governing Council of the ECB must submit its decision in writing, within two months, to the undertaking, the national central bank and the relevant authorities. If no decision has been taken within two months, the undertaking concerned may request a judicial review of the decision of the Executive Board in accordance with the Treaty.
Sanctions may not be enforced until the decision has become final. The proceeds from such sanctions belong to the ECB.
The right to initiate an infringement procedure on the basis of the Regulation is independent of any right of a competent national authority to initiate separate procedures in relation to areas outside the competence of the ESCB.
Procedures. The procedures laid down for the imposition of sanctions and the limits indicated make for a balance between the legal certainty of the undertakings subject to the regulations or decisions of the ECB and the need to allow the ECB some room for manoeuvre.
The right to take the decision to initiate an infringement procedure expires:
- one year after the existence of the alleged infringement first became known either to the ECB or to the national central bank;
- five years after the infringement occurred;
- in the case of a continued infringement, five years after the infringement was terminated.
The right to enforce sanctions expires one year after the procedure was initiated.
The Court of Justice has unlimited jurisdiction in accordance with Article 172 of the Treaty over the review of final decisions.
In the event of a conflict between the provisions of the Regulation and those of other Council regulations allowing the imposition of sanctions, the provisions of the latter prevail.
The ECB may adopt regulations to specify further the arrangements whereby sanctions may be imposed.
Entry into force. Article 6(2) on general provisions and regulatory power is applicable from the date of entry into force of this Regulation. The other articles are applicable from the 1st January 1999.
|Act||Entry into force||Deadline for transposition in the Member States||Official Journal|
|Regulation (EC) No 2532/98||27.11.9898||-||Official Journal L 318 of 27.11.1998|