Dáil Éireann debate -
Tuesday, 20 Nov 2001

Vol. 544 No. 3

Written Answers. - EU Directives.

Nora Owen

Question:

272 Mrs. Owen asked the Minister for Finance the EU directives relevant to his Department which are awaiting implementation; the nature of the directives; when each was passed by the Council of Ministers; the date for implementation; if the Government sought a derogation; if so, the date of such derogation; if he will meet the deadline as required; and if he will make a statement on the matter. [28860/01]

Minister for Finance (Mr. McCreevy):

There are currently four EU directives awaiting implementation by my Department. Two EU directives relating to electronic money, e-money, are awaiting implementation by my Department and the details of these are set out below. It is regretted that due to a misinterpretation of the legislative requirements for transposition, only one of these was referred to in my earlier reply of 8 May last.

Directive 2000/28/EC of the European Parliament and of the Council of 18 September 2000, amends Directive 2000/12/EC, relating to the taking up and pursuit of the business of credit institutions. This directive involves an amendment to the definition of "credit institution" in the general banking directives, to provide that any institution which issues e-money will be subject to supervision by the relevant competent authority in each member state. In Ireland's case, the relevant competent authority is the Central Bank of Ireland. This directive must be transposed into domestic law by 27 April 2002 at the latest. As such, a draft Statutory Instrument to effect transposition has been prepared by my Department and forwarded to the Office of the Parliamentary Counsel to the Government for formal drafting. I expect that this Statutory Instrument should shortly be signed into law.

The other EU e-money directive awaiting implementation is Directive 2000/46/EC of the European Parliament and of the Council of 18 September 2000 on the taking up, pursuit of and prudential supervision of the business of electronic money institutions. "Electronic money" is defined in the proposals as monetary value stored on an electronic device such as a chip card, pre-paid card or electronic purse, or on a computer memory, network or software money, and which is accepted as a means of payment by undertakings other than those of the issuer. In essence, these cards work on the same principle as a pre-paid mobile phone.

The main purpose of this directive is to improve the single market in financial services by introducing a minimum of harmonised rules for the business of issuing e-money. It creates legal certainty for issuers of e-money by setting up a special regulatory regime for e-money institutions, and introduces the concept of the single European passport for these institutions. The overall objective is to provide a regulatory framework that enables e-money to deliver its potential, while not hampering technological innovation.

This directive must also be transposed into domestic law by 27 April 2002 at the latest. Consequently, my Department, in consultation with the Central Bank, is currently preparing a draft statutory instrument which will transpose the provisions of the directive, and will shortly forward such to the Office of the Parliamentary Counsel to the Government for formal drafting. Therefore, I am pleased to report that we are on schedule to meet the deadline of April next year.

Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the re-organisation and winding up of credit institutions has yet to be implemented by my Department. This directive was agreed by Council on 12 March 2001. Under the directive, where a credit institution with branches in other member states fails, the winding up process will be subject to a single bankruptcy proceeding initiated in the member state where the credit institution has its registered office, known as the home state, and governed by a single bankruptcy law, that of the home state. This approach is consistent with the home country control principle that is the basis for the EU's banking directives. The directive will fill a major gap in the European Union's financial services legislation. It was identified as a top priority in the financial services action plan and the importance of its implementation was reiterated at the Lisbon Summit in March 1999.

Currently, if a bank or credit institution with branches across Europe has to be wound up and its assets divided among its creditors, the authorities in each member state where the institution is represented can open separate insolvency proceedings. This can lead to conflicts of jurisdiction and means that creditors are not equally treated. Similarly, if an institution has to be reorganised to restore it to financial health, approaches in different member states can be divergent. While winding up and reorganisation proceedings are, hopefully, rare, the directive is designed to guarantee consumer protection in such instances. This is particularly important given the rapid expansion in financial services and the growth in personal investment and savings plans. The deadline for transposition of this Directive is 5 May 2004.

Council Directive 2001/44/EC, which amends Directive 76/308/EEC on mutual assistance for the recovery of claims resulting from operations forming part of the system of financing the European agricultural guidance and guarantee fund, and of agricultural levies and customs duties and in respect of value added tax and certain excise duties was adopted by the Council of Ministers on 15 June 2001. The directive is supposed to be transposed into national law before 30 June 2002.

This directive is currently the subject of a legal dispute between the European Commission and the Council of the European Union regarding the appropriate EU treaty legal base, which may be decided by the European Court of Justice, thus it is unclear when this directive will be transposed into national law. Derogation has not been sought in the case of any of the directives listed above.