The CBC will enforce EU regulations under the new law

The bill newly introduced in the House aims to clarify the so-called The role of the Central Bank of Cyprus (CBC) as the authority responsible for implementing European Union (EU) legal acts. and imposing administrative obligations sanctions AND means on his supervised entities in cases of violations.

According to the proposed regulations that were discussed this week at the House plenum, Art The Minister of Finance will have the right to appoint the CBC as the person responsible for the application of EU acts.

This designation will be in line with the recommendations of the European Central Bank (ECB) and will only apply to legal acts relevant to the existing duties and responsibilities of the CBC, without assigning it new tasks.

In particular, changes to the “Law on the Central Bank of Cyprus” will enable the Minister of Finance to issue notifications in the Official Journal of the Republic.

These notifications will empower the CBC to act as the competent authority for the implementation of any EU regulations or decisions relating to its existing responsibilities.

The proposed regulations also authorize the CBC to impose administrative sanctions and measures specified in the relevant EU Regulations or Decisions.

The draft law was prepared in cooperation with the CBC after the European Central Bank (ECB) issued a reasoned opinion.

Moreover, no consultations with interested parties were carried out as the Ministry of Finance noted that the draft law directly concerns applicable EU acts.

The draft law is accompanied by an opinion from the ECB, received in February 2023. He noted that the powers conferred on the Minister of Finance to designate the authority competent to implement EU legal acts stem from the Constitution of the Republic of Cyprus, which provides for general executive powers of cabinet members in relation to their respective ministries.

The ECB understands that under Cypriot law, unless otherwise provided by law, regulatory administrative act or implementing decision, each ministry and independent service is responsible for ensuring the implementation of EU regulations and decisions within its jurisdiction in accordance with the constitution, laws and regulations and executive decisions.

Furthermore, in line with Cypriot legislation, the ECB understands that the draft law only applies to EU regulations and decisions relevant to the existing tasks and responsibilities of the CBC.

It is clarified that, based on the above, and assuming that the designation of the CBC as a competent authority is limited to EU legal acts relating to its existing tasks and responsibilities, the draft law does not impose any new obligations on the CBC.

With regard to the designation of the CBC as the national authority responsible for the application and enforcement of EU sanctions, the ECB requests clarification on the types of EU legal acts covered by the general term ‘EU acts’.

Moreover, to ensure legal certainty and transparency, the ECB also recommended changing the wording of the provision of the draft law authorizing the Minister of Finance to designate the CBC as the body competent to implement EU acts.

It was also noted that the wording should clearly state that only EU legal acts relevant to the existing obligations and responsibilities of the CBC would be covered by this exercise.

The ECB also suggested amending the provision of the draft law authorizing the CBC to impose administrative sanctions and measures specified in EU legal acts, in order to ensure consistency.

The amendment should clearly explain that they can be used within the limits set out in EU and national law, to the extent relevant to the obligations and responsibilities of the CBC.