Opinion of the European Central Bank of 25 May 2021 on the establishment of a register for basic enterprise data (CON/2021/19)
EN ECB-PUBLIC
Introduction and legal basis
On 4 May 2021 the European Central Bank (ECB) received a request from the German Federal Ministry for Economic Affairs and Energy for an opinion on a draft law on the establishment and management of a register on basic enterprise data and the introduction of a national business identification number for enterprises (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union (TFEU) and the third and fourth indents of Article 2(1) of Council Decision 98/415/EC 1 , as the draft law relates to Deutsche Bundesbank and the collection, compilation and distribution of monetary, financial, banking, payment systems and balance of payments statistics. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.
The main purpose of the draft law is it to establish a central register on basic enterprise data (hereinafter, the ‘basic register’) and to introduce a national, i.e. Germany-wide, business identification number for enterprises. The basic register and the business identification number supplement the various existing registries and identification numbers which currently exist in Germany. Under the draft law, information on economic operators is made centrally available for different public authorities for the performance of various public tasks. The establishment of the basic register is an infrastructural prerequisite for a comprehensive digitalisation of administrative services in Germany and considered an important element in establishing the so-called ‘once-only’ principle according to which an enterprise only needs to register once in order to be subject to any administrative measure. The basic register aims to not only reduce the administrative burdens for businesses but also improve the quality of register data and increase the efficiency of the public administration by connecting the various existing registries.
Basic register and national business identification number for enterprises
Under the draft law, the Statistisches Bundesamt (the Federal Statistical Office) is designated as the registration authority, which is responsible for the establishment and management of the basic register 2 . The draft law also provides that the basic register is geographically and organisationally
Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).
Section 1, paragraph 1 of the draft law.
separated from the areas that assume responsibilities in federal statistics 3 . In addition, the draft law introduces a national business identification number for enterprises, which will be used to identify the enterprises recorded in the basic register unequivocally across all registers 4 . The data-receiving public authorities are entitled to store and use the national business identification number for the performance of their tasks 5 .
The basic register must produce consistent, complete and up-to-date data from existing data in the registries or other public data files and the Global Legal Entity Identifier Foundation. 6 Any economic unit that pursues an economic activity is covered by the basic register. 7 Basic enterprise data comprises master data, identification numbers and metadata 8 . The master data concerns information such as the name, address and legal form of the economic unit. The identification numbers to be stored range from the newly introduced national business identification number for enterprises to commercial register numbers and the Legal Entity Identifier (LEI) 9 . The metadata covers information such as the name of the register from which the data for the basic register was retrieved and the entry date in the basic register.
Transmission to and by the registration authority
For the purpose of establishing and operating the basic register, specifically nominated public authorities, such as judicial authorities or the Bundeszentralamt für Steuern (Federal Central Tax Office), transmit data to the registration authority 10 . The data must be reported in the event that an undertaking is newly created, modified or closed 11 . Additionally, the registration authority is entitled to use data from the Global Legal Entity Foundation for the purposes of establishing and maintaining the register. The Federal Statistical Office itself does not transmit any data but acts as registration authority only.
The registration authority may transmit data to designated public authorities provided that the transmission serves the respective purpose stipulated in the draft law 12 . The data may be transmitted to specifically designated authorities either once, when the basic register is established, or regularly and on a recurring basis in the event of the establishment, modification or closing of an undertaking 13 . Other specifically designated public authorities may receive data upon request from the registration authority in an automated procedure provided that such data is necessary for the fulfilment of the public tasks of this public authority 14 . The registration authority is to check the admissibility of the
Ibid.
Section 2 of the draft law
Section 2, paragraph 3 of the draft law.
Section 1, paragraph 2 of the draft law.
Section 3, paragraph 1 of the draft law.
Section 1, paragraph 3 of the draft law.
For obligations of Member States in relation to the development, attribution and maintenance of LEIs, see, in particular, Article 13(1) of Commission Delegated Regulation (EU) 2017/590 of 28 July 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the reporting of transactions to competent authorities (OJ L 87, 31.3.2017, p. 449).
Section 4, paragraph 1 of the draft law.
Section 4, paragraph 2 of the draft law.
Section 5, paragraph 1 of the draft law.
Section 5, paragraph 2 of the draft law.
Section 5, paragraph 3 of the draft law.
receipt of data by means of appropriate sampling procedures, whenever there are indications for the necessity of such checks 15 .
The draft law provides that Deutsche Bundesbank is one of the designated public authorities which receives data from the registration authority automatically, both at the time of establishment of the basic register and regularly and recurrently when an enterprise is newly established, modified or closed. Deutsche Bundesbank may receive the data for the purpose of storing and using the data in the ECB Register of Institutions and Affiliates Data (RIAD 16 ) 17 . As Deutsche Bundesbank is to receive data automatically under the draft law, it is not necessary for it to submit a request to the registration authority to receive data.
Technical measures
Any data transmission must be recorded and stored for two years, without prejudice to reasons that may require a longer storage or deviating statutory provisions, and non-natural persons may seek access to their transmission records 18 .
The registration authority is responsible for the quality assurance of the basic data in terms of completeness, accuracy, consistency and timeliness. In order to fulfil this obligation, the registration authority must introduce a procedure to clarify inconsistencies in the data 19 .
The registration authority must take appropriate technical and organisational security measures for the management of the basic register, the transmission of data to and by the registration authority and for the recording of data transmissions 20 . For the purpose of further defining these measures, the Federal Ministry of Finance, the Federal Ministry for Economic Affairs and Energy and the Federal Ministry of Justice and Consumer Protection are authorised to issue a joint ordinance 21 .
The draft law and the effectiveness of the adopted measures will be reviewed five years after the draft law enters into force 22 .
The ECB welcomes the introduction of a national business identification number for enterprises. The availability of a single registration number to identify enterprises promises to significantly improve the quality of master data on German entities in RIAD and thus for the European System of Central Banks (ESCB) including the ECB. Quality master data on German entities and a national business identification number supports the clear identification of individual entities and connections between them. Quality master data is a key requirement for drawing a reliable map of the global economic and financial landscape. The global economy is based on an intricate, tightly knit and extremely complex network of financial transactions that are created by a vast number of cross-border contracts
Ibid, final sentence.
Guideline (EU) 2018/876 of the European Central Bank of 1 June 2018 on the Register of Institutions and Affiliates Data (ECB/2018/16) (OJ L 154, 18.6.2018, p. 3).
Section 5, paragraph 1, point 8 of the draft law.
Section 7 of the draft law.
Section 8 of the draft law.
Section 9 of the draft law.
Section 10 of the draft law.
Section 11 of the draft law.
with effects reaching across the world. This network comprises not only financial institutions, but all entities that have relationships with each other and with financial markets. Breakage of any single crucial node in this network has the potential to cause large parts of the network to unravel, with significant global implications. 23
A single registration number that remains valid at all times and in all locations in Germany is a very welcome development and will significantly reduce the amount of potentially erroneous register entries. Switches by an economic unit from one geographically-defined register to another are prone to generate erroneous entries in the registries, e.g. by double entries. Switches between registers may also hamper the possibility to follow a given enterprise over its lifecycle. An important precondition for the effective functioning of the system is that the proposed single registration number is unique and exclusive to each enterprise, and that it is not reused for two distinct entities though they may be active at different points in time. The completion of the envisaged ‘once-only’ principle and the timely registration and forwarding of any modifications will further contribute to these improvements. While the basic register will be very important, it will not remain the only source for basic enterprise information. The ECB understands that the draft law entitles Deutsche Bundesbank to also store and use the content of the basic register in RIAD.
It is of utmost importance that the ECB’s competence to use and store information that it receives from Deutsche Bundesbank is not impaired by limiting its use for ESCB purposes. In this regard, it is noted that RIAD contains the shared, multi-purpose master dataset on institutional units. It facilitates the integration of various databases operated and collected by the ECB, ESCB and the Single Supervisory Mechanism (SSM). Moreover, RIAD supports business processes across the Eurosystem and the performance of the tasks of the ESCB and the SSM. 24 It is also understood that the draft law supports the Deutsche Bundesbank’s ability to use all information available at national level to ensure that the reference information in RIAD is complete, accurate and up-to-date 25 . Furthermore, the draft law should not affect the Deutsche Bundesbank’s competence to collect the information necessary for the fulfilment of its ESCB tasks and its national law tasks 26 . The competence of the ESCB to collect information is a necessary element for assuring the fulfilment of its tasks under the TFEU and the Statute of the ESCB and the ECB. For statistical information, for instance, that competence derives directly from Article 5.1 of the Statute and from Council Regulation (EC) No 2533/98. 27
It is equally understood that the reference in the draft law to RIAD, and the draft law in general, do not impose any restrictions on the use and transmission of information within the ESCB, including any exacting restrictions on the onward transmission of information by the Deutsche Bundesbank,
Recommendation of the European Systemic Risk Board of 24 September 2020 on identifying legal entities (ESRB/2020/12) (OJ C 403, 26.11.2020, p.1) elaborates further on the importance of having a unique identification.
See recital 1 of Guideline (EU) 2018/876 of the European Central Bank of 1 June 2018 on the Register of Institutions and Affiliates Data (ECB/2018/16) (OJ L 154, 18.6.2018, p. 3).
Ibid., Article 4(4).
At the national level, the competence of the Deutsche Bundesbank to collect statistical data derives from section 18 of the Law on the Deutsche Bundesbank (Bundesbankgesetz). The competence of the Deutsche Bundesbank to collect information in general is necessary in order to carry out its tasks within the ESCB, and at national level in accordance with section 3 of the Law on the Deutsche Bundesbank.
Council Regulation (EC) No 2533/98 of 23 November 1998 concerning the collection of statistical information by the European Central Bank (OJ L 318, 27.11.1998, p. 8).
the ECB or the ESCB for the purpose of fulfilling the tasks of the ESCB and the SSM and for any other legitimate purposes. This includes, for example, the exchange of information for cooperative purposes with the European Statistical System, authorities responsible for supervision or financial stability, and other parties with which the ECB agrees to share information stored in RIAD in accordance with Union law and the relevant confidentiality requirements.
It is also important that the part of the basic register which is related to the identification of entities and respective basic classification variables 28 should be available, at a minimum, to the registered entities – e.g. banks and other financial institutions – to support their reporting activities, and ideally should also be available to the public at large. This approach would support digitalisation initiatives both at national and at European level. 29
This opinion will be published on EUR-Lex.
Done at Frankfurt am Main, 25 May 2021.
[signed]
The President of the ECB
Christine LAGARDE
This includes master data, such as national business identification number, name, address, legal status, economic sector classification, and data regarding the lifecycle of the entities.
One such initiative is the Integrated Reporting Framework (IReF) which is part of the broader ESCB integrated reporting strategy; further information on the IReF is available on the ECB’s website at www.ecb.europa.eu .