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AMENDMENT ACT OF BANK OF ESTONIA ACT

I. The following amendments and supplements are made in the Bank of Estonia Act (RT I 1993, 28, 498; 30, correction note; 1994, 30, 463; 1998, 64/65, 1006; 1999, 16, 271; 2001, 58, 353; 59, 358; 2002, 57, 356):

§ 1. Section 2:

1) The heading and subsection 1 [of section 2] are amended and worded as follows:

"§ 2. The aim and tasks of Eesti Pank (Bank of Estonia)
(1) The primary aim of Eesti Pank is to ensure the stability of prices. Eesti Pank shall manage currency circulation in Estonia and with foreign countries and be responsible for maintaining the stability of the legal tender of the Republic of Estonia.";

2) Another sentence in the following wording is added to Subsection 8:

"Eesti Pank shall collect data in order to obtain and publish monetary, financial and balance of payments statistics necessary for carrying out its tasks as prescribed by the State Statistics Act (RT I 1997, 51, 822; 2000, 47, 289; 2002, 63, 387)."

§ 2. Section 3:

1) Subsection 1 is amended and worded as follows:

" (1) Eesti Pank shall operate independent of other state institutions. Eesti Pank shall report to Riigikogu, shall not be liable to the Government of the Republic of Estonia or any other agency of executive power or third persons.";

2) is complemented with Subsection 11 in the following wording:

"(11) Belonging to the European System of Central Banks, Eesti Pank and members of its management bodies may apply for instructions to and receive instructions from the European Central Bank only.".

§ 3. Section 9:

1) clause 1 of Subsection 2 to declare void;

2) clauses 6 and 7 of subsection 2 are amended and worded as follows:

"6) Supervision of meeting the budget of Eesti Pank;
7) Appointment of internal auditors of Eesti Pank, confirmation of work plan of internal audit and making decisions based on internal audit;";

3) Subsection 2 is complemented with clause 71 in the following wording:

"71) Nomination of independent auditors of Eesti Pank;";

4) clause 8 of Subsection 2 is amended and worded as follows:

"8) Approval of the annual report of Eesti Pank by the proposal of the Governor;";

5) the words "the issue of, their" are omitted from clause 9 of Subsection 2 [and reworded as follows: "deciding on the denominations and design of new banknotes and coins"] ;

6) is complemented with Subsection 21 in the following wording:

"(21) The Board of Eesti Pank shall regularly receive information from the Governor of Eesti Pank on the Estonian economy, monetary policy, financial sector and on meeting the budget of Eesti Pank.";

7) the words "and Estonian banking policy" are omitted from clause 3;

8) the words ",also in the event the Chairman is not appointed" are omitted from Subsection 7;

9) in Subsection 8 the words "in clauses 2, 5 and 6" are replaced with the words "in clauses 2, 5, 6 and 8".

§ 4. Section 10 is complemented with Subsections 3 and 4 in the following wording:

"(3) Governor of Eesti Pank shall be independent in fulfilling his duties. He cannot hold any other office, be in any other place of service or participate in an action, which in its essence restricts or may restrict independency of Eesti Pank, has negative impact or may have negative impact on achieving the objectives and duties of Eesti Pank."
(4) In the absence of the Governor of Eesti Pank, a Deputy Governor, to whom the Governor of Eesti Pank temporarily assigns/delegates his authority with a regulation, shall act as his deputy. If the assignment of authority to a Deputy Governor is not possible, the Board of Eesti Pank shall appoint a deputy of the Governor of Eesti Pank. If the Board of Eesti Pank has not appointed a deputy for the Governor, a Deputy Governor oldest amongst the deputy governors shall act as the deputy of the Governor. A substitute for the Governor shall have all authorization of the Governor of Eesti Pank during the period his authorization is in force, except his authority as a member of the Board of Eesti Pank."

§ 5. Section 11:

1) Clause 1 of Subsection 1 is amended and worded as follows:

"1) formation of monetary and banking policy as well as general management of activities of Eesti Pank, also fulfilment of duties of the European System of Central Banks;";

2) Clause 3 of Subsection 1 is declared void;

3) Subsection 1 is complemented with clause 7 in the following wording:

"7) Confirmation of the budget of Eesti Pank.".

§ 6. The Act is complemented with §113 in the following wording:

" § 113. Prolongation of authority
If a new Governor of Eesti Pank, Chairman or member of the Board of Eesti Pank has not been appointed upon coming to an end of the term of authority of the Governor of Eesti Pank, Chairman or member of the Board of Eesti Pank, the authorization of the person in office shall be prolonged until the respective decision on appointment comes into force."

§ 7. The text of Section 12 is amended and worded as follows:

"(1) The Governor of Eesti Pank, Chairman or member of the Board of Eesti Pank may be relieved from office if judgement of conviction comes into force.
(2) The Governor of Eesti Pank may be relieved from office also if he no longer meets the requirements made to him and fulfils the conditions required for the performance of his duties or if he has been guilty of serious misconduct."

§ 8. Section 13 is complemented with Subsection 11 in the following wording:

"(11) The task of the Executive Management shall be the planning and organisation of the work of Eesti Pank."

§ 9. Clause 5 of Section 14 is complemented with the words "if sufficient collateral exists".

§ 10. Section 16 is amended and worded as follows:

"§ 16. Prohibition to credit
Eesti Pank is prohibited from giving loans to institutions or agencies of the European Union, government of the Republic of Estonia and governments of the member countries of the European Union, local governments or other public authorities, other persons in public law or commercial undertakings with state or local government participation."

§ 11. Heading of Chapter V of the Act is amended and worded as follows:

"Chapter V
ASSETS AND ACCOUNTING OF EESTI PANK".

§ 12. Section 26:

1) Subsection 1 is declared void;

2) Subsection 2 is amended and worded as follows:

"(2) Eesti Pank shall independently possess, use and command its assets."

§ 13. Section 31:

1) In the first sentence of Subsection 1 the word "Riigikogu" is replaced with the words "the Board of Eesti Pank";

2) Subsection 3 is amended and worded as follows:

"(3) The Annual Report shall be approved by the Board of Eesti Pank who after approval shall submit it with the Statement of the Auditors to Riigikogu. Simultaneously with the Annual Report of Eesti Pank, the Annual Report of the Financial Supervision Authority approved by the Supervisory Council shall be submitted to Riigikogu. Riigikogu shall hear the report on the Annual Report of Eesti Pank made by the Governor of Eesti Pank."

II. Entry into force of Act

§ 14. § 1 Clause 1, § 2, § 3 Clauses 1-7 and 9 as well as §§ 5, 7-10 and 13 of this Act enter into force upon the Republic of Estonia's accession to the European Union.

Chairman of Riigikogu Toomas Savi
Passed on 22 January 2003