Powers of the European Central Bank to impose sanctions

KEY POINTS

Limits for fines / periodic penalty payments which the ECB may impose as a consequence of an infringementInfringement. Any failure by an undertaking to fulfil an obligation arising from ECB regulations or decisions.

• The upper limit for fines on undertakings is €500,000 or, in the case of sanctions imposed in relation to the ECB’s supervisory tasks, twice the amount of the profits gained or losses avoided because of the infringement or 10% of the total annual turnover of the undertaking.
• The upper limit for periodic penalty payments is €10,000 per day of infringement or, in the case of sanctions imposed in relation to the ECB’s supervisory tasks, 5% of the average daily turnover per day of infringement. Periodic penalty payments can be imposed for a maximum of 6 months from the day of the notification of the decision imposing such penalties.

Publication

• The ECB publishes any decision imposing sanctions on its website after the notification. The publication of the decision is anonymised if it is likely to:
  • jeopardise the stability of the financial markets or an ongoing criminal investigation;
  • cause disproportionate damage to the undertaking concerned;
  • result in the publication of confidential information which would put at risk legitimate public interests in security, such as the security and protection of the integrity of euro banknotes or the secure management of cyber or operational risks to systemically important payment systems⁶ (see summary).
• Where the above circumstances are likely to cease within a reasonable period of time, publication may be postponed for that period of time. However, in the case of the publication of confidential information which would put at risk legitimate public interests in security, the ECB may choose not to publish a decision imposing a sanction where it considers that the risk to legitimate public interests in security may not be mitigated by publishing the relevant decisions on an anonymised basis or by postponing their publication.
• If an appeal to the Court of Justice of the European Union in respect of a decision imposing a sanction is pending, the ECB publishes, without unnecessary delay, information on the status of the appeal in question and the outcome thereof on its official website.
• The information published remains available for at least 5 years.

Criteria taken into account

When considering a sanction, the ECB is guided by the principle of proportionality and takes into account:

• the good faith and openness of the undertaking concerned and its degree of diligence and cooperation, or, conversely, its wilful deceit;
• the seriousness of the impact of the infringement;
• the repetition, frequency or duration of the infringement;
• the profits obtained by the undertaking from the infringement;
• the economic size of the undertaking;
• any prior sanctions imposed on the undertaking for the same infringement by other competent authorities.

Infringement procedure

• The decision on whether to initiate an infringement procedure must be taken by the ECB, acting on its own initiative or on the basis of a motion to that effect addressed to it by the national central bank of the EU Member State in whose jurisdiction the alleged infringement has occurred.
• The same decision can be taken, on its own initiative or on the basis of a motion to that effect addressed to it by the ECB, by the national central bank of the Member State in whose jurisdiction the alleged infringement has occurred.
• The undertaking concerned must be given no fewer than 30 days to present its defence.
• The Executive Board adopts a reasoned decision on whether to impose sanctions on the undertaking.
• Within 30 days of receiving the reasoned decision, the undertaking may request that the Governing Council review the decision. If no decision has been taken within 2 months, the decision becomes final.
• The Governing Council may ask the undertaking concerned, the Executive Board or the competent national central bank to provide additional information in order to review the Executive Board’s decision. The Governing Council may amend the Executive Board’s decision and modify the amount of the sanction to be imposed, the grounds giving rise to an infringement and whether and to what extent the sanction is published.
• The undertaking concerned is notified of the conclusion and of its right of judicial review.
• The infringement procedure must be initiated within 1 year of the existence of the infringement becoming known to the ECB or to the national central bank of the jurisdiction where it occurred and, in any case, within 5 years of the infringement occurring. Furthermore, the right to take the decision to impose a sanction in respect of an infringement expires 1 year after the decision to initiate the procedure.
• Specific rules apply for sanctions imposed in the exercise of the ECB’s supervisory tasks. On completion of an investigation, the ECB notifies the undertaking concerned, sets a reasonable time limit for submissions and may invite it to an oral hearing. The ECB’s Supervisory Board proposes a draft decision to the Governing Council. After adoption, the decision can be reviewed by the Administrative Board of Review.
• The time limit for sanctions imposed by the ECB in the exercise of its supervisory tasks is 5 years. It can be interrupted and extended by actions taken by the ECB for the purposes of the proceedings.