Barnier supports decision to take Iceland to EFTA Court over Icesave deposits

Internal Market and Services commissioner Michel Barnier has lent his support to the decision by the EFTA Surveillance Authority to refer Iceland to the EFTA Court over its position on British and Dutch depositors in bankrupt bank Icesave.

A statement released by the European Commission said: “The Commission takes note of the EFTA Surveillance Authority’s decision to file an application to the EFTA Court for Iceland’s failure to ensure that the Dutch and British depositors in “Icesave” accounts received the minimum compensation according to the Directive on Deposit Guarantee Schemes. The Commission shares the Surveillance Authority’s legal analysis as regards the interpretation of the Directive on Deposit Guarantee Schemes and is envisaging the possibility of intervening in the case before the EFTA Court.”

According to the Directive, Icelandic bank Landesbanki and its UK and Dutch branches under the Icesave brand was supposed to pay at least €20,000 per depositor, after Landesbanki went bankrupt in late 2008.

The Surveillance Authority had chased the Icelandic government for a further specific response on the issue through the past year, but the answer it received fell short of what it demanded.

Oda Helen Sletnes, president of the Authority, said: “Iceland must comply with its obligations under the EEA Agreement. It must ensure compensation of all depositors under the conditions prescribed by the Deposit Guarantee Directive and without discrimination.”

If the EFTA Court rules against Iceland, it will be required to pay the money immediately.

Iceland is responsible under the Directive because Landesbanki’s presence in the UK and Netherlands was through branches not subsidiaries. That puts the regulatory onus on the home country, in this case Iceland, to ensure that depositors receive the minimum compensation due.


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