The Chamber of Deputies passed the amendment of the Act on the Czech National Bank (zákon o České národní bance) in the first reading at its last session on 15 May. The amendment reflects some comments that have been raised by the ECB and European Commission. The Bill stipulates institutional independence of the CNB by preventing from political influence. Besides that, the CNB should promote monetary and fiscal stability of the Czech Republic, and goals of the EU (see here). The Bill also regulates the ownership of the foreign reserves exchange as they should become possession of the CNB.
The Chamber also passed the amendment that was proposed by the Committee on Budget extending the possibility for the CNB to act on the behalf of the Ministry of Finance. In such cases, the CNB may deal in investments tools (securities, etc). The trade activities of the CNB on the behalf of the Ministry of Finance are, however, the object of negotiation and a consecutive agreement between the CNB and the Ministry. 
The discussion regarding the foreign exchange reserves on the floor of the Chamber has been raised. Some deputies asked to keep the current state (reserves as possession of the state in administration of the CNB). However, the Chamber of Deputies supported the previous Governmental version according to which the reserves should be possession of the CNB. Thus it could prevent the economic policy from unadvised intervention of politician in economic matters via the CNB. 
For further information including the discussion, click here.

On 7 May, the Chamber of Deputies insisted on the Bill on Transparency of Joint Stock Companies (zákon o transparentnosti akciových společností). The Bill had been rejected by the Senate at its meeting on 20 March. The Senate proposed amendments to the Bill, stipulating rather stricter proposition (any joint stock company in the Czech Republic should have the transparent ownership structure of registered shares, see here). The Chamber of Deputies refused to incorporate the Senate’s amendment into the Bill and insisted on its previous version.

Therefore, the Bill stipulates that owners of shares should register them before 30 June, 2014. Any joint stock company emerging after 1 January, 204 should have only registered shares structure.

The Bill is heading to the president who should promulgate the Bill. The Bill should come into force in 30 days after being promulgated.

For further information, click here.

The Chamber of Deputies also discussed a private member’s Bill on export insurance and financing state subsidy (zákon o pojišťování a financování vývozu se státní podporou). The Bill amends some provisions of the current Act in terms of contracting export insurance.

The export insurance credit rate under which banks lend insurance money to exporters derives from the current state of inter-bank loan rate (EURIBOR, LIBOR). However, insurance contracts are usually based on the fix credit rate. Therefore, the difference between the contracted rate and the factual rate may harm the providing bank. The amendments stipulate the possibility to compensate the difference that is incurred by credit rate movements. The amendment, therefore, regulates principles under which the Ministry of Finance may compensate the differences to private banks. Furthermore, the Bill stipulates supervision of the Ministry that is allowed to withdraw any contracts from the system of compensated export insurance contracts.

The aim of the Bill is to provide further export subsidy to increase the Czech foreign trade. The Ministry of Finance should provide each year a compensational sum of money of 100 mil of CZK.

The Committee on Budget has proposed amendments to the Bill. The amendment states that the Export Guarantee and Insurance Corporation (EGAP) should act on behalf of the Ministry of Finance in conducting compensation activities and supervision.

For further information, click here (explanatory report).

On 3 May, the Ministry of Finance has put forward the Bill on Controlling and Supervision System of Public Administration (zákon o řídícím a kontrolním systému ve veřejné správě). The Bill reflects commentaries of the European Union on the financial control. Instead of that, the Ministry has proposed the Bill in connection with obstacles of using EU-funds money in last year.

The Bill unifies the supervision of public money spending no matter of the source of money. The basic principle is that the any public budget should be under the same supervision, i.e. the “European” money (EU-funds money), state budget, and regional and municipal budgets should be treated according to the Bill. The Bill stipulates the managerial responsibility of mandators (both for incomes as well as expenditures). Further, the Bill regulates the auditing system. In the future, the public budget administrator should be responsible for auditing of its own budget. The state of internal budget message with any recommendation is stipulated as crucial during the successive handling of the situation. The Bill also introduces the possibility to set up Committees on Audit when the administrator assumes it convenient.

An enhanced control responsibility is vested on the Ministry of Finance. The Ministry should regulate the process of internal audit, and methodologically supervise the financial control within public budgets. That enhanced position of the Ministry is a reaction on one of the criticism regarding the North-West Development Program (ROP Severozápad) and malpractice during the using of the EU-funds money (for more, see here).

The Bill is currently in the internal commentary procedure. The Ministry welcomes any further till 20 May.

For further information, click here (explanatory report).

On 2 May, the Prime Minister Petr Nečas has announced that the incentives for Czech exporters are of the highest priority of the Czech Government. The PM met representatives of Czech industry involved in export. After the meeting, the PM announced that the complete concord among him and the representatives was reached upon the measures that should be adopted to enhance the Czech competitiveness and foreign trade. Three pillars of the Czech competitiveness are: infrastructure construction, public administration efficiency, and innovation and development. According to the Government, the constant effort has been made to fulfill the Governmental program in all the three areas. The PM also stressed the importance of foreign trade activities outside of the EU. The representatives of the Czech industry stated the importance of the Czech diplomacy for new emerging markets.

For further information, click here (press release).

In connection with that, the Government is steadily implementing the Foreign Trade Strategy. The Strategy also stipulates the “economic diplomacy”. Till the end of 2013, the amount of foreign office of the Ministry of Trade and Industry (the former CzechTrade and CzechInvest) should increase to 70 from the current 48 offices all over the world.

For further information regarding the Foreign Trade Strategy, click here.