The requirement to submit a company’s financial statements to the Bank of Greece: (one more headache)
Preamble
Mules are known, among other things, for their patience, persistence, strength and ability to carry heavy loads. In the western world mule have been widely used -up until World War II.
In Arabic countries that is the job for camels.
In our country that is what companies do.
The keeper of the animal has always been (and still is) under the impression that the animal (mule or camel) can carry “something more”. It is obvious: that cannot always be the case. Brits use the phrase “the last straw”. To be more precise: “the last straw which breaks the camel’s back”: that insignificant load that will kill the poor animal.
There is not such a phrase in Greek, at least none that I know of. Maybe that is why companies are still used here: because they have all the aforementioned traits of a mule.
One, more, obligation: the submission of a legal entity’s financial statements to the Bank of Greece
A recent act of the Governor of the Bank of Greece [2682/3.6.2019 -published in the Government Gazette B 2453/2019 -as part of the obligations imposed on the Bank of Greece by the European Central Bank – Regulation (EC) 2533/1998 of 23.11.1998-article 5 §1 and 6 §4], “nonfinancial legal entities that are S.A.s (listed or unlisted), private limited companies, limited partnerships with a share capital or private limited companies and that are obligated, per article 1 Act 4308/2014, to prepare annual financial statements have to, along with publishing them, submit them to the Bank of Greece by filling out a specific “financial statements” template, which is attached to this Act and is an integral part of it.” (article 1).
In other words:
S.A., public limited liability, private limited and limited partnerships with a share capital companies are obligated, from now on, to submit to the Bank of Greece their financial statements by “filling out” certain financial statement templates the Bank of Greece approves.
So just publishing their financial statements is not enough for these legal entities. It is also mandatory to submit them to the Bank of Greece, conforming to a certain template.
Time of the disclosure and what it entails
The first submission of the aforementioned legal entities’ financial statements will take place from the 1st till the 30 of November 2019. Said financial statements will regard the accounting years of: (a) 2016 (for the accounting years ending from 1.4.2016 till 31.3.2017), (b) 2017 (for the accounting years ending from 1.4.2017 till 31.3.2018) and (c) 2018 (for the accounting years ending from 1.4.2018 till 31.3.2019),
Regarding the following accounting years, the submission of the relevant data to the Bank of Greece will take place at the same time with their publication, as dictated by law.
In any case (article 5) “the Bank of Greece maintains the right to request additional data and clarifications regarding the data already submitted by businesses”.
The sanctions
In case of incomplete, incorrect or late submission of the aforementioned data by the businesses, the sanctions that may be imposed on them are those described in article 2 and 55C of the Statute of the Bank of Greece, and they are not at all (at least the maximum penalties) insignificant: a bit less than three hundred thousand (!) euros and in case of repeated infringement, a bit less than six hundred thousand (!) euros.
In other words: exhausting …
The reactions
A recent letter, signed by the Accountant Association of Athens on the 25.6.2019 and sent to the Governor of the Bank of Greece and the Union of Hellenic Chambers of Commerce, is protesting about the situation every Greek business experiences: “Unfortunately, until today, we have been obligated to send the same data to different agencies too many times, while this information is already available to a state agency”.
What is requested with this letter is what should be a given in the first place, which is “the direct interconnection between the databases of Hellenic Business Registry with the databases of the Bank of Greece”.
What all Greek businesses experience is pointed out as well: the imposition of an additional expense on their operation due to the state’s disinterest or incompetence.
Conclusion
While reading the abovementioned letter, I remembered something that happened when I first started practicing law (late ‘90s): A fellow lawyer from Frankfurt visited my office. He saw me sticking stamps on a lawsuit I was preparing to file. He started laughing. I was surprised. “What are these” he asked, pointing to the stamps (which he had never seen before and which he had no idea what they were used for). I explained to him. He laughed even more. I remained surprised (and sad…) until about two years ago, when this kind of bureaucracy came to an end.
Always MANY years behind.
The Greek State continues to, most of the times, not choose to self-improve. It just opts out for the easy way: the pass of its own obligations on to the businesses. It operates with the certainty that the “mule” can carry “something more”.
Perhaps, the State is right to do so according to its logic (unless this “something” turns to be the “last straw” for some of them…)
Stavros Koumentakis
Senior Partner
P.S. A brief version of this article has been published in MAKEDONIA Newspaper (July, 7th, 2019).
