July – August 2014

Introducing new banking rules under Basel III

(Act No. 213/2014 Coll.)

The amendment of the Act on Banks implements the Directive on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (CRD IV) into the Slovak legal order and specifies the application of the Regulation on prudential requirements for credit institutions and investment firms (CRR). The amendment thus introduces international banking rules Basel III to banking regulation to improve the functioning of the banks, investment companies and securities traders and to ensure financial stability. New rules also provide for new sanctions aiming to deter financial institutions from violating general principles and rules on own funds adequacy. 
Stricter regulation of banks and securities traders is a reaction to the financial crisis, which revealed deficiencies in their functioning. The amendment extends National Bank of Slovakia (NBS) competence in financial institutions supervision. If NBS reveals deficiencies in the functioning of financial subjects (e.g. own funds inadequacy) it will immediately inform the European Banking Authority, acting as the European financial supervisory body. NBS also may increase the frequency of inspections and request financial institution to submit special reports. 
If a bank falls into adverse financial situation, the National Bank of Slovakia may establish a restructuring plan and a crisis plan that should help the bank to recover. In such case, the bank will be obliged to cooperate with NBS and provide it with all necessary information. With the exception of few provisions, the amendment will become effective as of 1 August 2014.

Central electronic contact point for import, export and transit of goods  
(Act No. 214/2014 Coll.)

Slovak National Council has adopted a new act on administration, operation, and use of the system Central electronic contact point for import, export and transit of goods. The new system allows subjects involved in international trade to file application to relevant authorities (e.g. customs declarations, requests concerning transactions in international commerce, etc.) in standardized forms and obtain information through a single contact point.
It will now be possible for entrepreneurs to establish an efficient and free of charge communication with public authorities regarding matters related to import, export and transit of goods. Further, this system enables public authorities to receive applications, issue decisions and provide information on matters regarding international trade (e.g. on transit documentation, licenses, and requirements for their issuance) in a more efficient way. 
The whole communication is based on electronic forms with the aim to speed up the process of transit of goods and to cut down the costs and administrative burden. The administrator and operator of the system will be respectively the Ministry of Finance and the Financial Directory. The project is co-financed by the European Union through Informatisation of Society operating programme. The new act becomes effective as of 15 December 2014.

Consumer’s obligation to pay a remuneration for a loan
(Regulation No. 141/2014 Coll.)

In order to increase consumers’ protection with regard to consumer credits, the government of the Slovak Republic has adopted a regulation that sets the highest possible remuneration a consumer may pay for a credit or loan. The remuneration consists of the interest, fees and any other benefits or expenditures agreed in a loan agreement.
The remuneration must not exceed the double of an average percentage rate of banks’ expenditures for individual newly-granted consumer credits for comparable credit or loan. If a consumer is granted a credit for a period shorter than three months, or if the sum borrowed is inferior to 100,00 EUR, the remuneration must not exceed 30% of the loan/credit amount per year. If a financial or a non-bank institution enters into an agreement with a consumer that provides for a remuneration higher than the statutory limit, the clause will be void.
The regulation also determines the minimal font size that may be used in consumer contracts. As of 1 January 2015, the font size of provisions of consumer contracts, general terms and conditions, and any other documents related to consumer contracts must be at least 1.9 mm.

Acquisition of ownership of agricultural land
(Act No. 140/2014 Coll.)

The National Council adopted a new act on acquisition of ownership of agricultural lands in an attempt to prevent uncontrollable transformation of agricultural lands into development lands. Under the new regulation a person who wishes to acquire an agricultural land (i.e. a land that is registered in the land registry as an arable land) must prove the ability to properly maintain the land.
This act introduces new rules regarding transfer of ownership titles to agricultural land. An owner who wishes to transfer the ownership of agricultural lands to a third person must publish the offer in the official registry held by Ministry of Agriculture and Rural Development accessible on the internet. Only if no farmer expresses interest in the land within the minimum 15 days period since the offer’s publication, the agricultural land can be transferred to a non-farmer. However, the acquirer must have had a residence in Slovakia for at least 10 years. There are few exemptions to this rule. For example, it does not apply to transfer of land between co-proprietors and family members. The competent district authority will certify the fulfilment of the conditions for the application of the exemptions. The certificate must be attached to the land transfer application to the land registry.