Sittings · Document

DRAFT OPINION (COM(2023)0369 – C90219/2023 – 2023/0212(COD)) 2023-11-14

On the proposal for a regulation of the European Parliament and of the Council on the establishment of the digital euro

Committee on Civil Liberties, Justice and Home Affairs · Rapporteur: Emil Radev

PA_Legam

AMENDMENT

The Committee on Civil Liberties, Justice and Home Affairs calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to take the following into account:

Amendment 1

Proposal for a regulation

Recital 13

Text proposed by the Commission

Amendment

(13) Member States, their relevant authorities and payment service providers should deploy information and educational measures to ensure the necessary level of awareness and knowledge of the different aspects of the digital euro.

(13) Member States whose currency is the euro should deploy information and educational measures to ensure the necessary level of awareness and knowledge of the different aspects of the digital euro, including the benefits of its use as well as its characteristics relating to the protection and exercise of fundamental rights and freedoms. Member States whose currency is not the euro may also provide such information and educational measures to their citizens, in cooperation with the European Central Bank where relevant.

Or. en

Amendment 2

Proposal for a regulation

Recital 21

Text proposed by the Commission

Amendment

(21) The main objective of the establishment of the digital euro is its use as a form of the single currency with legal tender in the euro area. For this purpose and in line with the Agreement on the European Economic Area, digital euro users residing or established in the euro area, including consumers with no fixed address, asylum seekers and consumers who are not granted a residence permit but whose expulsion is impossible for legal or factual reasons, may be provided digital euro payment services by PSPs established in the European Economic Area. Natural and legal persons who were already receiving digital euro payment services, because they opened a digital euro payment account at the time they resided or were established in a Member State whose currency is the euro, but no longer reside or are established in such Member State, may still receive digital euro payment services by payment service providers established in the European Economic Area, in line with the Agreement on the European Economic Area, subject to possible time limitations in relation to the status of residence or establishment of these persons that the European Central Bank may define.

(21) The main objective of the establishment of the digital euro is its use as an additional form of the single currency with legal tender in the euro area. For this purpose and in line with the Agreement on the European Economic Area, digital euro users residing or established in the euro area, including consumers with no fixed address, asylum seekers and consumers who are not granted a residence permit but whose expulsion is impossible for legal or factual reasons, may be provided digital euro payment services by PSPs established in the European Economic Area. Natural and legal persons who were already receiving digital euro payment services, because they opened a digital euro payment account at the time they resided or were established in a Member State whose currency is the euro, but no longer reside or are established in such Member State, may still receive digital euro payment services by payment service providers established in the European Economic Area, in line with the Agreement on the European Economic Area, subject to possible time limitations in relation to the status of residence or establishment of these persons that the European Central Bank may define.

Or. en

Amendment 3

Proposal for a regulation

Recital 32 a (new)

Text proposed by the Commission

Amendment

(32 a) Holding limits on digital euro payment accounts should apply to both offline and online holdings separately. Both limits should be calculated individually based on the specificities of each form of the digital euro and should apply independently from one another. Digital euro users should not be put into a situation where lowering their holding limit for offline digital euro would allow them to hold more online digital euro, and vice versa. Such situation would compromise the privacy protection of the offline digital euro, since changing its holding limit on the side of the user would expose the amount they actually do hold or wish to hold.

Or. en

Amendment 4

Proposal for a regulation

Recital 40

Text proposed by the Commission

Amendment

(40) To ensure wide access to and use of the digital euro, consistent with its status of legal tender, and to support its role as monetary anchor in the euro area, natural persons residing in the euro area, natural persons who opened a digital euro account at the time they resided in the euro area, but no longer reside there, as well as visitors, should not be charged for basic digital euro payment services. That means that such digital euro users should not bear any direct fees for their basic access to and basic use of the digital euro, including not being charged transaction fees or any other fees that are directly associated with the provision of services related to the basic use of the digital euro. Digital euro users should not be required to have or open a non-digital euro payment account or to accept other non-digital euro products. Where the digital euro user agrees to a package of services comprising non-digital euro services and basic digital euro payment services, the payment service provider should be able to charge that package of services at its discretion. In that case, there should not be a differentiated charge for the non-digital euro services when they are offered separately or as part of a package including basic digital euro payment services. Where the digital euro user asks to receive only basic digital euro payment services with a payment service provider, those services should not be charged, including for waterfall and reverse waterfall functionalities where the digital euro user also has a non-digital euro payment account with another payment service provider. Payment service providers should be able to charge digital euro users for additional digital euro payment services beyond the basic digital euro payment services.

(40) To ensure wide access to and use of the digital euro, consistent with its status of legal tender, and to support its role as monetary anchor in the euro area, natural persons residing in the euro area, natural persons who opened a digital euro account at the time they resided in the euro area, but no longer reside there, as well as visitors, should not be charged for basic digital euro payment services. That means that such digital euro users should not bear any direct fees for their basic access to and basic use of the digital euro, including not being charged transaction fees or any other fees that are directly associated with the provision of services related to the basic use of the digital euro. Digital euro users should not be required to have or open a non-digital euro payment account or to accept other non-digital euro products. Where the digital euro user agrees to a package of services comprising non-digital euro services and basic digital euro payment services, the inclusion of the latter should not have any effect on the price of the package of services. In other words, there should not be a differentiated charge for the non-digital euro services when they are offered separately or as part of a package including basic digital euro payment services. Where the digital euro user asks to receive only basic digital euro payment services with a payment service provider, those services should not be charged, including for waterfall and reverse waterfall functionalities where the digital euro user also has a non-digital euro payment account with another payment service provider. Payment service providers should be able to charge digital euro users for additional digital euro payment services beyond the basic digital euro payment services.

Or. en

Amendment 5

Proposal for a regulation

Recital 47

Text proposed by the Commission

Amendment

(47) An excessive distribution of the digital euro outside the euro area could have an unwanted impact on the size and composition of the consolidated balance sheet of the European Central Bank and national central banks. Impacts on monetary sovereignty and financial stability of non-euro area countries may also differ depending on the use of the digital euro outside the euro area. Those impacts could be harmful in case the digital euro replaces the local currency in a high number of domestic transactions. In particular, a situation in which the digital euro becomes dominant in a Member State whose currency is not the euro, thus de facto replacing the national currency, could interfere with the euro area adoption criteria and process set out in Article 140 TFEU. To avoid undesirable effects and prevent monetary sovereignty and financial stability risks, both within and outside the euro area, it is necessary to provide for the possibility for the Union to conclude agreements with third countries, and for the European Central Bank to conclude arrangements with the national central banks of Member States whose currency is not the euro and with the national central banks of third countries, to specify the conditions for the regular provision of digital euro payment services to digital euro users residing or established outside the euro area. Such agreements and arrangements should not cover visitors to the euro area, to whom payment service providers established in the European Economic Area31 , in line with the Agreement on the European Economic Area, may directly provide digital euro payment services.

(47) An excessive distribution of the digital euro outside the euro area could have an unwanted impact on the size and composition of the consolidated balance sheet of the European Central Bank and national central banks. Impacts on monetary sovereignty and financial stability of non-euro area countries may also differ depending on the use of the digital euro outside the euro area. Those impacts could be harmful in case the digital euro replaces the local currency in a high number of domestic transactions. In particular, a situation in which the digital euro becomes dominant in a Member State whose currency is not the euro, thus de facto replacing the national currency, could interfere with the euro area adoption criteria and process set out in Article 140 TFEU. To avoid undesirable effects and prevent monetary sovereignty and financial stability risks, both within and outside the euro area, it is necessary to provide for the possibility for the Union to conclude agreements with third countries. The European Central Bank should be encouraged to conclude arrangements with the national central banks of Member States whose currency is not the euro, to specify the conditions for the regular provision of digital euro payment services to digital euro users residing or established outside the euro area. Similar agreements can be concluded with the national central banks of third countries. Such agreements and arrangements should not cover visitors to the euro area, to whom payment service providers established in the European Economic Area31 , in line with the Agreement on the European Economic Area, may directly provide digital euro payment services.

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31 Agreement on the European Economic Area (OJ L 1, 3.1.1994, p. 3).

Or. en

Amendment 6

Proposal for a regulation

Recital 53

Text proposed by the Commission

Amendment

(53) Agreements and arrangements related to the provision of digital euro payment services or cross-currency payments involving the digital euro should be concluded on a voluntary basis, in priority with non-euro area Member States. The European Central Bank should cooperate with national central banks of Member States whose currency is not the euro for the purpose of cross-currency payments involving the digital euro.

(53) Agreements and arrangements related to the provision of digital euro payment services or cross-currency payments involving the digital euro should be concluded on a voluntary basis, in priority with non-euro area Member States. The European Central Bank should actively cooperate with national central banks of Member States whose currency is not the euro for the purpose of cross-currency payments involving the digital euro.

Or. en

Amendment 7

Proposal for a regulation

Recital 78

Text proposed by the Commission

Amendment

(78) With its package on the prevention of the use of the financial system for the purposes of money laundering and terrorist financing, adopted by the Commission on 21 July 202138 , (‘AML-package’), the Commission has proposed to significantly strengthen anti-money laundering (‘AML’) rules across the Union. In keeping with that objective and to ensure an effective application of AML/CFT requirements to the digital euro, this Regulation should provide that online digital euro payment transactions are subject to AML/CFT requirements laid down in Directive (EU) 2015/849.

(78) With its package on the prevention of the use of the financial system for the purposes of money laundering and terrorist financing, adopted by the Commission on 21 July 202138 , (‘AML-package’), the Commission has proposed to significantly strengthen anti-money laundering and countering the financing of terrorism (‘AML/CFT’) rules across the Union. In keeping with that objective and to ensure an effective application of AML/CFT requirements to the digital euro, this Regulation should provide that online digital euro payment transactions are subject to AML/CFT requirements laid down in Directive (EU) 2015/849.

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38 Proposal for a regulation on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (COM/2021/420 final); Proposal for a Directive establishing the mechanisms that Member States should put in place to prevent the use of the financial system for ML/TF purposes, and repealing Directive (EU) 2015/849 ( COM/2021/423 final); Proposal for a Regulation creating an EU Authority for anti-money laundering and countering the financing of terrorism (‘AMLA’) (COM/2021/421 final); and Proposal for the recast of Regulation (EU) 2015/847 expanding traceability requirements to crypto-assets (COM/2021/422 final)

Or. en

Amendment 8

Proposal for a regulation

Recital 79

Text proposed by the Commission

Amendment

(79) To facilitate the widespread uptake of the digital euro, it is essential that prospective digital euro users can easily access digital euro payment services provided by payment services providers in a harmonised manner across the euro area. It is therefore appropriate, without any prejudice to the risk approach underpinning the AML-package, for the anti-money laundering authority of the Union (‘AMLA’) to address the opening of digital euro payment accounts in its Regulatory Technical Standards on customer due diligence. For low-risk transactions or business relationships, AMLA should identify relevant simplified due diligence measures that payment services providers should apply. AMLA should prioritise the development of these Regulatory Technical Standards.

(79) To facilitate the widespread uptake of the digital euro, it is essential that prospective digital euro users can easily access digital euro payment services provided by payment services providers in a harmonised manner across the euro area. It is therefore appropriate, without any prejudice to the risk approach underpinning the legislative AML-package, for the Anti-Money Laundering Authority of the Union (‘AMLA’) to address the opening of digital euro payment accounts in its Regulatory Technical Standards on customer due diligence developed in accordance with Article 22 of the AML Regulation [Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing]. For low-risk transactions or business relationships, AMLA should identify relevant simplified due diligence measures that payment services providers should apply. AMLA should prioritise the development of these Regulatory Technical Standards.

Or. en

Amendment 9

Proposal for a regulation

Article 5 – paragraph 1

Text proposed by the Commission

Amendment

1. The digital euro shall be governed by the provisions of this Regulation, supplemented by the delegated acts that the Commission is empowered to adopt pursuant to Articles 11, 33, 34, 35 and 38, and by the implementing acts that the Commission is empowered to adopt pursuant to Article 37. When drafting delegated and implementing acts pursuant to Articles mentioned in this paragraph, the Commission shall take into account principles of data protection by design and by default, as defined in Regulation (EU) 2016/679.

Or. en

Amendment 10

Proposal for a regulation

Article 5 – paragraph 2

Text proposed by the Commission

Amendment

2. Within the framework of this Regulation, the digital euro shall also be governed by the detailed measures, rules and standards that may be adopted by the European Central Bank pursuant to its own competences. Where these detailed measures, rules and standards have an impact on the protection of individuals’ rights and freedom with regard to the processing of personal data, the European Central Bank shall consult the European Data Protection Supervisor prior to their adoption.

Or. en

Amendment 11

Proposal for a regulation

Article 14 – paragraph 5

Text proposed by the Commission

Amendment

5. The anti-money laundering authority of the Union (‘AMLA’) established under Regulation (EU) [please insert reference - proposal for a Regulation creating an EU Authority for anti-money laundering and countering the financing of terrorism (‘AMLA’) - COM/2021/421 final)] and the European Banking Authority shall jointly issue guidelines specifying the interaction between AML/CFT requirements and the provision of basic digital euro payment services with a particular focus on financial inclusion of vulnerable groups including asylum seekers or beneficiaries of international protection, individuals with no fixed address or third country nationals who are not granted a residence permit but whose expulsion is impossible for legal or factual reasons.

5. The Anti-Money Laundering Authority of the Union (‘AMLA’) established under Regulation (EU) [please insert reference - proposal for a Regulation creating an EU Authority for anti-money laundering and countering the financing of terrorism (‘AMLA’) - COM/2021/421 final)] and the European Banking Authority shall jointly issue guidelines specifying the interaction between AML/CFT requirements and the provision of basic digital euro payment services with a particular focus on financial inclusion of vulnerable groups including asylum seekers or beneficiaries of international protection, individuals with no fixed address or third country nationals who are not granted a residence permit but whose expulsion is impossible for legal or factual reasons.

Or. en

Amendment 12

Proposal for a regulation

Article 16 – paragraph 2 – point c a (new)

Text proposed by the Commission

Amendment

(c a) reflect EU rules on AML/CFT.

Or. en

Amendment 13

Proposal for a regulation

Article 16 – paragraph 4

Text proposed by the Commission

Amendment

4. Any holding limits on digital euro payment accounts adopted pursuant to paragraph 1 shall apply to both offline and online holdings. Where a digital euro user uses both an offline and online digital euro, the limit that applies to online digital euro shall equal the overall limit determined by the European Central Bank minus the holding limit for offline digital euro set by digital euro users. A digital euro user may set its offline holding limit at any amount between zero and the holding limit set in accordance with Article 37.

4. Holding limits on digital euro payment accounts adopted pursuant to paragraph 1 shall apply to both offline and online holdings separately. Both limits shall be calculated individually based on the specificities of each form of the digital euro and shall apply independently from one another.

Or. en

Amendment 14

Proposal for a regulation

Article 16 – paragraph 6

Text proposed by the Commission

Amendment

6. In case a digital euro user has multiple digital euro payment accounts, the digital euro user shall specify to the payment service providers with which the digital euro payment accounts are held how the individual holding limit is to be allocated between the different digital euro payment accounts.

Or. en

Amendment 15

Proposal for a regulation

Article 16 – paragraph 7

Text proposed by the Commission

Amendment

7. Where a digital euro payment account is held by more than one digital euro user, any holding limit on the related digital euro payment account adopted pursuant to paragraph 1 shall amount to the sum of the individual holding limits allocated to its users.

Or. en

Amendment 16

Proposal for a regulation

Article 18 – paragraph 3

Text proposed by the Commission

Amendment

3. The agreement referred to in paragraph 1shall specify the necessary implementing measures and procedures, and the cases under which the agreement may be restricted, suspended, or terminated.

3. The arrangement referred to in paragraph 1shall specify the necessary implementing measures and procedures, and the cases under which the arrangement may be restricted, suspended, or terminated.

Or. en

Amendment 17

Proposal for a regulation

Article 18 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

3 a. The European Central Bank shall provide national central banks of Member States whose currency is not the euro with relevant information and assistance in order to facilitate the signing of arrangements mentioned in paragraph 1. For this purpose, the Commission may organise information campaigns with the aim of informing the Member States whose currency is not the euro about the various characteristics of the digital euro, including the benefits of its use as well as its aspects relating to the protection and exercise of fundamental rights and freedoms.

Or. en

Amendment 18

Proposal for a regulation

Article 21 – paragraph 2

Text proposed by the Commission

Amendment

2. The European Central Bank shall cooperate with national central banks of Member States whose currency is not the euro to enable interoperable payments between the digital euro and other currencies.

2. The European Central Bank shall actively cooperate with national central banks of Member States whose currency is not the euro to enable interoperable payments between the digital euro and other currencies.

Or. en

Amendment 19

Proposal for a regulation

Article 23 – paragraph 3

Text proposed by the Commission

Amendment

3. Before initiating a digital euro payment transaction in a proximity payment, the payee and the payer shall be informed of whether the digital euro payment transaction will be offline or online.

3. Before initiating a digital euro payment transaction in a proximity payment, the payee and the payer shall agree on whether the digital euro payment transaction will be offline or online.

Or. en

Amendment 20

Proposal for a regulation

Article 29 – paragraph 1

Text proposed by the Commission

Amendment

1. Payment Service Providers executing digital euro payment transactions shall verify whether any of their digital euro users are listed persons or entities. Payment service providers shall carry out such verifications immediately after the entry into force of any new or amended restrictive measures adopted in accordance with Article 215 TFEU providing for asset freeze or prohibition of making funds or economic resources available, and at least once every calendar day.

Or. en

Amendment 21

Proposal for a regulation

Article 32 – paragraph 2

Text proposed by the Commission

Amendment

2. The European Central Bank shall consult the European Data Protection Supervisor prior to developing the details on the operational elements of the fraud detection and prevention mechanism.

2. The European Central Bank shall consult the European Data Protection Supervisor and the Anti-Money Laundering Authority prior to developing the details on the operational elements of the fraud detection and prevention mechanism.

Or. en

Amendment 22

Proposal for a regulation

Article 32 – paragraph 4

Text proposed by the Commission

Amendment

4. For the purpose of this Article, payment service providers shall provide the fraud detection and prevention mechanism with information referred to in Annex 5. Payment service providers shall implement appropriate technical and organisational measures including state-of-the-art security and privacy-preserving measures to ensure that the support service shall not be able to directly identify the digital euro users on the basis of the information provided to the fraud detection and prevention mechanism.

Or. en

Amendment 23

Proposal for a regulation

Article 34 – paragraph 4

Text proposed by the Commission

Amendment

4. Payment service providers shall implement appropriate technical and organisational measures including state-of-the-art security and privacy-preserving measures to ensure that any data communicated to the European Central Bank and the national central banks or to providers of support services do not directly identify individual digital euro users. When implementing these technical and organisational measures, payment service providers shall take into account principles of data protection by design and by default, as defined in Regulation (EU) 2016/679.

Or. en

Amendment 24

Proposal for a regulation

Article 34 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

4 a. For the purposes reffered to in this article, payment service providers should respect the principle of data minimisation, as defined in Regulation (EU) 2016/679.

Or. en

Amendment 25

Proposal for a regulation

Article 35 – paragraph 4

Text proposed by the Commission

Amendment

4. Personal data processed for tasks referred to in paragraph 1 shall be supported by appropriate technical and organisational measures including state-of-the-art security and privacy-preserving measures. This shall include the clear segregation of personal data to ensure that the European Central Bank and the national central banks cannot directly identify individual digital euro users. When implementing these technical and organisational measures, the European Central Bank and the national central banks shall take into account principles of data protection by design and by default, as defined in Regulation (EU) 2016/679.

Or. en

Amendment 26

Proposal for a regulation

Article 35 – paragraph 8

Text proposed by the Commission

Amendment

8. For purpose of supporting the task of payment service providers to enforce the holding limits in accordance to Article 16(1) and ensuring the emergency switching upon the request of the user in accordance with Article 31(2), the ECB may alone or jointly with national central banks establish a single access point of digital euro user identifiers and the related digital euro holding limits as referred to in point (4) of Annex 4. The European Central Bank shall implement appropriate technical and organisational measures including state-of-the-art security and privacy-preserving measures to ensure that the identity of individual digital euro users cannot be inferred from the information accessed via the single access point by entities other than payment service providers whose customer or potential customer is the digital euro user.

Or. en

Amendment 27

Proposal for a regulation

Article 35 – paragraph 8 a (new)

Text proposed by the Commission

Amendment

8 a. For the purposes reffered to in this article, the European Central Bank and national central banks should respect the principle of data minimisation, as defined in Regulation (EU) 2016/679.

Or. en

Amendment 28

Proposal for a regulation

Article 36 – paragraph 4

Text proposed by the Commission

Amendment

4. The processing of personal data for the purposes referred to in paragraph 1 shall only take place when appropriate technical and organisational measures including state-of-the-art security and privacy-preserving measures are implemented to ensure that the providers of support services cannot directly identify individual digital euro users. When implementing these technical and organisational measures, payment service providers shall take into account principles of data protection by design and by default, as defined in Regulation (EU) 2016/679.

Or. en

Amendment 29

Proposal for a regulation

Article 36 – paragraph 5

Text proposed by the Commission

Amendment

5. The providers of support services shall be considered to be the controllers of personal data as regards the purposes referred to in paragraph 1 of this Article. This paragraph is without prejudice to the European Central Bank and the national central banks appointing the operators of any payment-related services across PSPs and auditing of the service performance level without processing any personal data.

5. The European Central Bank and providers of support services shall be considered to be joint controllers of personal data as regards the purposes referred to in paragraph 1 of this Article. This paragraph is without prejudice to the European Central Bank and the national central banks appointing the operators of any payment-related services across PSPs and auditing of the service performance level without processing any personal data.

Or. en

Amendment 30

Proposal for a regulation

Article 36 – paragraph 5 a (new)

Text proposed by the Commission

Amendment

5 a. For the purposes reffered to in this article, providers of support services should respect the principle of data minimisation, as defined in Regulation (EU) 2016/679.

Or. en

Amendment 31

Proposal for a regulation

Article 37 – paragraph 2

Text proposed by the Commission

Amendment

2. Transaction data shall not be retained by payment service providers or by the European central banks and the national central banks.

2. Transaction data shall not be processed by payment service providers or by the European central banks and the national central banks.

Or. en

Amendment 32

Proposal for a regulation

Article 37 – paragraph 6 – subparagraph 2

Text proposed by the Commission

Amendment

For the purposes of point (a), the Commission may request AMLA to adopt an opinion assessing the level of money laundering and terrorist financing threats associated with the offline digital euro and its vulnerabilities. The Commission may consult the European Data Protection Board.

For the purposes of point (a), the Commission shall consult AMLA, which shall assess the level of money laundering and terrorist financing threats associated with the offline digital euro and its vulnerabilities. The Commission may also consult the European Data Protection Board.

Or. en

Amendment 33

Proposal for a regulation

Annex II – paragraph 1 – introductory part

Text proposed by the Commission

Amendment

Basic digital euro payment services for natural persons shall consist of:

Basic digital euro payment services for natural persons shall be provided free of charge and consist of:

Or. en

ANNEX: LIST OF ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

The following list is drawn up under the exclusive responsibility of the rapporteur. The rapporteur has received input from the following entities or persons in the preparation of the draft opinion:

Entity and/or person

European Commission

European Central Bank

European Data Protection Supervisor

European Data Protection Board

Bulgarian Permanent Representation

Czech Permanent Representation

FTI Consulting