Decision (EU) 2020/637 of the European Central BankShow full title

SECTION III U.K. CONSEQUENCES OF NON-COMPLIANCE

Article 15 U.K. ECB decisions on non-compliance

1. In the event of an instance of non-compliance by an accredited manufacturer, the ECB may take any of the decisions referred to in Articles 16 to 19. These decisions shall include all of the following:

(a) the instance of non-compliance and any comments provided by the accredited manufacturer, where applicable;

(b) the manufacturing site, the euro secure item and/or euro item and the euro secure item activity and/or euro item activity to which the decision relates;

(c) the date on which the decision will become effective and, if applicable, one or both of the following:

(i)

the date on which the decision will expire;

(ii)

the circumstances under which the decision will expire;

(d) the time limit for remedying the non-compliance, where applicable;

(e) the reasons for the decision.

2. A decision shall be proportionate to the seriousness of a relevant instance of non-compliance and shall take into account all of the following:

(a) the track record of the accredited manufacturer as regards the occurrences and corrections of any other instances of non-compliance;

(b) all relevant explanations provided by the accredited manufacturer regarding the relevant instance of non-compliance;

(c) a description of how the accredited manufacturer remedied, or intends to remedy, the relevant instance of non-compliance.

3. When defining time limits, the ECB shall ensure that the time limits are proportionate to the seriousness of a relevant instance of non-compliance.

4. The ECB shall inform the relevant accredited manufacturer in writing of the decision it has taken.

5. The ECB may inform the NCBs and other relevant accredited manufacturers of any decision taken pursuant to Articles 16 to 19, e.g. by means of the accreditation register or in writing. The information provided by the ECB may include the identity of the accredited manufacturer, the type and nature of the non-compliance and the validity of the decision, where applicable.

Article 16 U.K. Warning decision

1. The ECB may take a warning decision in relation to an accredited manufacturer in the event of one of the following:

(a) a major instance of non-compliance;

(b) a recurrent pattern of instances of non-compliance;

(c) a failure to correct an instance of non-compliance in a timely and effective manner.

2. A warning decision shall state that if the instance of non-compliance is not remedied within the specified time limit, Article 17 or 18 shall apply.

3. If the ECB determines that a warning decision alone is not a sufficient deterrent given the seriousness of the identified instance of non-compliance, it shall take a decision pursuant to Article 17 or 18.

Article 17 U.K. Suspension decision in relation to new orders

1. If an accredited manufacturer fails to comply with a decision on an immediate stop of a euro secure item activity under Article 14, the ECB may take a suspension decision against that accredited manufacturer. The accredited manufacturer shall be prohibited from accepting new orders until the suspension decision has been lifted.

2. If an accredited manufacturer fails to remedy an instance of non-compliance specified in a warning decision under Article 16 within the specified time limit, the ECB may take a suspension decision against that accredited manufacturer. The accredited manufacturer may finish any ongoing production order, but shall be prohibited from accepting new orders until the suspension decision has been lifted.

3. A suspension decision shall state that if the instance of non-compliance has not been remedied within the specified time limit, Article 18 shall apply.

4. If the ECB determines that a suspension decision alone is not a sufficient deterrent given the seriousness of the identified instance of non-compliance, it may take a revocation decision pursuant to Article 18.

5. A suspension decision shall only be lifted if all relevant instances of non-compliance have been assessed as having been remedied by an inspection pursuant to Article 11.

Article 18 U.K. Revocation decision on accreditation

1. The ECB may take a revocation decision if an accredited manufacturer fails to comply with a suspension decision under Article 17.

2. The ECB shall take a revocation decision in the event of any of the following:

(a) a request from an accredited manufacturer to transfer its euro secure item activity and/or euro item activity to a new manufacturing site. In such a case, the scope of the revocation shall include the old manufacturing site from which the relevant activity is being transferred;

(b) a change in ownership of the accredited manufacturer, where such a change may directly or indirectly enable an entity involved in the intended change of the ownership structure to gain access to ECB-confidential information related to this Decision, applicable legal acts or contractual agreements in relation to the ECB, one or more NCBs or one or more accredited manufacturers;

(c) a request from an accredited manufacturer to withdraw its accreditation.

3. The ECB may take a revocation decision where it assesses that such a revocation is necessary, taking into consideration any of the following:

(a) the seriousness of a specific instance of non-compliance;

(b) the magnitude of actual or potential loss or theft of any euro secure items or euro items;

(c) whether there has been any consequential financial and reputational damage due to unauthorised publication of information related to euro secure items;

(d) the adequacy of the accredited manufacturer’s response, capacity and capability to mitigate the instance of non-compliance;

(e) the fact that specific circumstances at the manufacturing site could damage the integrity of euro banknotes as a means of payment.

4. The ECB may take a revocation decision regarding an accredited manufacturer that has not produced euro secure items or euro items for an uninterrupted period of 36 months. When taking a revocation decision on this basis, the ECB shall consider the specific circumstances of the accredited manufacturer.

5. Where the possession of any euro secure items by the accredited manufacturer could put the integrity of euro banknotes as a means of payment at risk once the revocation decision becomes effective, the ECB may require the manufacturer to take measures, such as the destruction of specified euro secure items, or delivery of these items, to the ECB or an NCB, to ensure that the manufacturer does not possess any such euro secure items once the revocation becomes effective. The ECB may conduct on-site checks to verify the effective implementation of these measures.

6. A revocation decision shall specify the date after which a manufacturer may re-apply for accreditation. This date shall be determined on the basis of the circumstances leading to the revocation and shall be at least one year from the date on which the revocation decision became effective.

Article 19 U.K. Financial penalties in the event of discrepancies in the quantities of euro banknotes or euro banknote paper

1. If a discrepancy in the quantity of partly printed or finished euro banknotes or in the quantity of partly finished or finished euro banknote paper is brought to the attention of the ECB in accordance with point (6) of Article 9 or occurs during a euro secure item activity at a manufacturing site of the accredited manufacturer, the ECB may impose a financial penalty on the accredited manufacturer, in addition to any decision taken pursuant to Articles 16, 17 and 18, in any of the following verified cases:

(a) the accredited manufacturer failed to identify such a discrepancy;

(b) the accredited manufacturer failed to report the discrepancy in accordance with point (6) of Article 9;

(c) the accredited manufacturer reported the discrepancy in accordance with point (6) of Article 9, but then failed to identify and report to the ECB the cause of the discrepancy within the time limit laid down by the separate decision on security requirements.

2. Before taking a decision on a financial penalty, the ECB shall verify that the discrepancy in the quantity of partly printed or finished euro banknotes or in the quantity of partly finished or finished euro banknote paper is due to an instance of non-compliance with the security requirements laid down in a separate decision.

3. When determining the amount of the financial penalty to be imposed in relation to a verified discrepancy, the ECB shall take into account the face value either of the following:

(a) the partly printed or finished euro banknotes;

(b) the potential euro banknotes that could have been printed using the partly finished or finished euro banknote paper.

4. The ECB may apply a financial penalty different from the face value or equivalent face value determined pursuant to paragraph 3, taking into account the seriousness of the non-compliance with the security requirements in each specific case.

5. Under no circumstances may the ECB impose a financial penalty exceeding EUR 500 000.

6. When taking a decision on financial penalties, the ECB shall follow the procedures laid down in Regulation (EC) No 2532/98 and European Central Bank Regulation (EC) No 2157/1999 (ECB/1999/4)(1).

Article 20 U.K. Delegation and sub-delegation

1. The Governing Council delegates the power to take all decisions relating to a manufacturer’s accreditation under Article 6(1), 6(3) and 6(7), Article 7, Article 10, Article 14(1) and 14(4) and Articles 16 to 19 to the Executive Board.

2. The Executive Board may sub-delegate the power to take all decisions relating to a manufacturer’s accreditation under Article 6(1), 6(3), and 6(7) and Article 7 to one of its members.

3. The Executive Board may sub-delegate the power to the operational level to:

(a) grant the ECB’s prior written consent in accordance with Article 10(1) in cases in which an accredited manufacturer has complied with all relevant accreditation requirements pursuant to Articles 3 and 4 and all relevant obligations pursuant to Article 9;

(b) take decisions relating to an immediate stop of euro secure item activity pursuant to Article 14.

4. The Executive Board shall inform the Governing Council of any decisions taken upon delegation or sub-delegation under this Article.

Article 21 U.K. Review procedure

1. The ECB shall assess any request and information provided by a manufacturer related to this Decision and inform the manufacturer in writing of its decision to accept or reject the request or validity of the information received within 50 business days from the receipt of either of the following:

(a) the request for accreditation;

(b) any additional information or clarification from the manufacturer that was requested by the ECB.

2. A manufacturer may submit a request to the Governing Council to review an ECB decision:

(a) taken pursuant to Article 6(1) and (7) and Article 7;

(b) taken pursuant to Article 14 and pursuant to Articles 16 to 18.

The manufacturer shall submit the request for review within 30 business days of notification of the decision referred to in paragraph 1. The manufacturer shall include its reasons for the request and all supporting information.

3. The review shall not have suspensive effect. By way of exception, if a manufacturer expressly requests that the review should have suspensive effect and gives reasons for the request, the Governing Council may suspend the application of the decision that is being reviewed.

4. The Governing Council shall review the decision referred to in paragraph 1 in the light of the manufacturer’s review request. If the Governing Council considers that the decision referred to in paragraph 1 infringes this Decision, it shall either order that the procedure in question is repeated or take a final decision. If the Governing Council considers that the decision referred to in paragraph 1 does not infringe this Decision, the manufacturer’s review request shall be rejected. The manufacturer shall be notified in writing of the outcome of the review within 60 business days of the ECB’s receipt of the review request. The Governing Council’s decision shall state the reasons on which it is based.

5. The Court of Justice of the European Union shall have exclusive jurisdiction in any dispute between the ECB and a manufacturer relating to this Decision. If a review procedure is available under paragraph 2, the manufacturer shall wait for the Governing Council’s decision on the review before bringing the matter before the Court of Justice. Time limits set out in the Treaty shall begin to run from receipt of the review decision.

6. By way of derogation from paragraphs 1 to 4, the review procedure for decisions imposing financial penalties pursuant to Article 19 shall be carried out in compliance with Regulation (EC) No 2532/98 and Regulation (EC) No 2157/1999 (ECB/1999/4).

7. If mutually agreed, the ECB and the manufacturer may resolve any dispute about the application of this Decision via arbitration. All disputes between the ECB and an accredited manufacturer shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with those Rules. The language of arbitration shall be English.

(1)

European Central Bank Regulation (EC) No 2157/1999 of 23 September 1999 on the powers of the European Central Bank to impose sanctions (ECB/1999/4) (OJ L 264, 12.10.1999, p. 21).