DECISION OF THE EUROPEAN CENTRAL BANK
of 16 September 2010
on the authenticity and fitness checking and recirculation of euro banknotes
(ECB/2010/14)
(2010/597/EU)
THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 128(1) thereof,
Having regard to the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the Statute of the ESCB), and in particular Article 16 thereof,
Whereas:
(1)
Article 128(1) of the Treaty and Article 16 of the Statute of the ESCB provide that the European Central Bank (ECB) has the exclusive right to authorise the issue of euro banknotes within the Union. This right includes the competence to take measures to protect the integrity of euro banknotes as a means of payment.
(2)
To protect the integrity of euro banknotes and enable a proper detection of counterfeits, euro banknotes in circulation must be maintained in good condition to ensure that they can be easily and reliably checked for genuineness, and therefore euro banknotes must be checked for fitness. Furthermore, suspect counterfeit euro banknotes must be quickly detected and handed over to the competent national authorities.
(3)
Article 6 of Council Regulation (EC) No 1338/2001 of 28 June 2001 laying down measures necessary for the protection of the euro against counterfeiting (1) originally obliged credit and other relevant institutions to withdraw from circulation all euro banknotes received by them which they know or have sufficient reason to believe to be counterfeit.
(4)
To establish harmonised standards on euro banknote recirculation, in 2005 the ECB published the banknote recycling framework which laid down common rules and procedures on authenticity and fitness checking of euro banknotes (2), including operational standards for banknote handling machines. Subsequently, the ECB adopted common procedures for the testing of banknote handling machines by NCBs.
(5)
Regulation (EC) No 1338/2001 has been amended (3) to the effect that the scope of its addressees has been extended and that they are now obliged to ensure that euro banknotes they have received and which they intend to put back into circulation are checked for authenticity and that counterfeits are detected. In this respect Regulation (EC) No 1338/2001 stipulates that, for euro notes, this check shall be carried out in line with the procedures defined by the ECB. It is therefore appropriate to lay down those procedures in a legal act.
(6)
Without prejudice to the Member States’ competence to establish sanctions against the institutions referred to in Article 6(1) of Regulation (EC) No 1338/2001 that fail to discharge their obligations thereunder, the Eurosystem must be able to take appropriate administrative measures to ensure that the procedures defined by the ECB are complied with and that the rules and procedures established under this Decision are not circumvented with the consequent risk of counterfeit and unfit banknotes not being detected or being put back into circulation,
HAS ADOPTED THIS DECISION:
Article 1
Scope
This Decision lays down common rules and procedures on the authenticity and fitness checking and recirculation of euro banknotes under Article 6(1) of Regulation (EC) No 1338/2001.
Article 2
Definitions
For the purposes of this Decision:
1.
‘NCB’ means the national central bank of a Member State whose currency is the euro.
2.
‘Cash handlers’ means the institutions and economic agents referred to in Article 6(1) of Regulation (EC) No 1338/2001.
3.
‘Recirculation’ means the action, by cash handlers, of putting back into circulation, directly or indirectly, euro banknotes that they have received, either from the public as payment or as a deposit in a bank account, or from another cash handler.
4.
‘Banknote handling machine’ means a customer-operated or staff-operated machine as defined in Annex I.
5.
‘Type of banknote handling machine’ means a banknote handling machine that can be distinguished from other banknote handling machines as described in Annex I.
6.
‘Common test procedures’ means the test procedures, as specified by the ECB, to be applied by NCBs in order to test types of banknote handling machine.
7.
‘Trained staff members’ means employees of cash handlers who have: (a) knowledge of the different public security features of euro banknotes, as specified and published by the Eurosystem, and the ability to check them; and (b) knowledge of the sorting criteria listed in Annex IIIb and the ability to check euro banknotes in accordance with them.
8.
‘Counterfeit euro banknotes’ means counterfeit banknotes as defined in Article 2(a) of Regulation (EC) No 1338/2001.
9.
‘Cash dispenser’ means a self-service machine which, through the use of a bank card or other means, dispenses euro banknotes to the public, debiting a bank account, such as an automated teller machine (ATM) dispensing cash. Self-checkout terminals (SCoTs) with which the public can pay for goods or services either by bank card, cash or other payment instruments, having a cash-withdrawal function, are also considered cash dispensers.
10.
‘Competent national authorities’ means authorities as defined in Article 2(b) of Regulation (EC) No 1338/2001.
11.
‘Unfit euro banknotes’ means euro banknotes which are evaluated as unsuitable for recirculation following the fitness checking referred to in Article 6.
12.
‘Credit institution’ means a credit institution as defined in Article 4(1)(a) of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (4).
Article 3
General principles
1. The obligation of cash handlers to check euro banknotes for authenticity and fitness shall be carried out in line with procedures laid down in this Decision.
2. If two or more cash handlers are involved in the recirculation of the same euro banknotes, the cash handler responsible for the authenticity and fitness checking of these euro banknotes shall be designated in accordance with national regulations or, in the absence of such regulations, in contractual arrangements between the relevant cash handlers.
3. The authenticity and fitness checking shall be carried out either by a type of banknote handling machine successfully tested by an NCB, or manually by a trained staff member.
4. Euro banknotes may only be recirculated via customer-operated machines or cash dispensers if they have been checked for authenticity and fitness by a type of banknote handling machine successfully tested by an NCB and classified as genuine and fit. However, this requirement shall not apply to euro banknotes that have been delivered directly to a cash handler by an NCB or by another cash handler that has already checked the euro banknotes for authenticity and fitness in this manner.
5. Staff-operated machines, when used for the purpose of authenticity and fitness checking, and customer-operated machines may only be put into operation by cash handlers if they have been successfully tested by an NCB and listed on the ECB’s website as laid down in Article 9(2). The machines shall be used with the standard factory settings, including any updates thereof, that have been successfully tested unless stricter settings are agreed between the NCB and the cash handler.
6. Euro banknotes which have been checked for authenticity and fitness and classified as genuine and fit by trained staff members but not by a type of banknote handling machine successfully tested by an NCB may only be recirculated over the counter.
7. This Decision shall not apply to the authenticity and fitness checking of euro banknotes carried out by NCBs.
Article 4
Classification and treatment of euro banknotes by banknote handling machines
1. Euro banknotes checked by a customer-operated machine shall be classified and treated in accordance with Annex IIa.
2. Euro banknotes checked by a staff-operated machine shall be classified and treated in accordance with Annex IIb.
Article 5
Detection of counterfeit euro banknotes
Banknotes that are not authenticated as genuine euro banknotes following classification carried out in accordance with Annex IIa or IIb or following manual authenticity checking by a trained staff member shall immediately, in line with national regulations and in any case within a maximum of 20 working days, be handed over by cash handlers to the competent national authorities.
Article 6
Detection of unfit euro banknotes
1. Fitness checking shall be carried out in accordance with the minimum standards laid down in Annexes IIIa and IIIb.
2. An NCB may, after informing the ECB, lay down stricter standards for one or more denominations of euro banknotes if this is justified, for example by a deterioration in the quality of the euro banknotes in circulation in its Member State.
3. Unfit euro banknotes shall be handed over to an NCB in consideration of national regulations.
Article 7
Exceptions
1. NCBs may grant remote branches of credit institutions with a low level of cash operations permission for trained staff members to carry out manual fitness checking of euro banknotes to be recirculated via customer-operated machines or cash dispensers, provided that authenticity checking is carried out by a type of banknote handling machine successfully tested by an NCB. To apply for this permission, credit institutions shall provide the NCB of their Member State with evidence of the remoteness of the branch in question and the low level of its cash operations. Each NCB shall ensure that the volume of euro banknotes manually checked in this manner does not exceed a maximum of 5 % of the overall volume of euro banknotes which are distributed annually via customer-operated machines or cash dispensers. NCBs shall decide whether the 5 % threshold shall apply at the level of each credit institution or at that of all credit institutions at national level.
2. Where an exceptional event occurs as a result of which the euro banknote supply in a Member State is significantly impaired, cash handlers’ trained staff members may, on a temporary basis, and subject to the relevant NCB’s agreement that the event is exceptional, carry out manual authenticity and fitness checking of euro banknotes to be recirculated via customer-operated machines or cash dispensers.
Article 8
Eurosystem commitments
1. The information, as specified by the Eurosystem, on euro banknotes and their machine-readable security features shall be provided to manufacturers by the Eurosytem in advance of the issue of a new banknote series and thereafter to enable them to build banknote handling machines that are able to pass the common test procedures and to adapt to new requirements.
2. The information, as specified by the Eurosystem, on euro banknotes and their public security features shall be provided by the Eurosystem to cash handlers in advance of the issue of a new euro banknote series and thereafter to enable their staff members to be given any training required.
3. Training by cash handlers of their staff members to ensure that trained staff members are competent to check euro banknotes for authenticity and fitness shall be supported by the Eurosystem.
4. Cash handlers shall be informed by the Eurosystem of counterfeit threats when appropriate and may be required by the Eurosystem for action to be taken, including a temporary prohibition on the recirculation of the banknote denomination(s) concerned.
5. Manufacturers of banknote handling machines shall be informed by the Eurosystem of counterfeit threats as appropriate.
Article 9
Eurosystem’s common test procedures for banknote handling machines
1. Types of banknote handling machines shall be tested by NCBs in accordance with the common test procedures.
2. All successfully tested types of banknote handling machines shall be listed on the ECB’s website during the periods of validity of the test results, as referred to in paragraph 3. A type of banknote handling machine that becomes unable during this period to detect all counterfeit euro banknotes known to the Eurosystem shall be removed from the list in accordance with a procedure specified by the ECB.
3. Where a type of banknote handling machine is successfully tested, the test results shall be valid throughout the euro area for one year from the end of the month of their publication on the ECB’s website, provided that it remains capable of detecting all counterfeit euro banknotes known to the Eurosystem during this period.
4. The Eurosystem shall not be held liable if a successfully tested type of banknote handling machine is unable to classify and treat euro banknotes in accordance with Annex IIa or IIb.
Article 10
Eurosystem monitoring activities and corrective measures
1. Subject to national law requirements, NCBs are authorised (i) to carry out on-site inspections, including unannounced ones, at cash handlers’ premises to monitor their banknote handling machines, in particular the machines’ capacity to check for authenticity and fitness and to trace suspect counterfeit euro banknotes and euro banknotes that are not clearly authenticated to the account holder; and (ii) to verify the procedures governing the operation and control of the banknote handling machines, the treatment of checked euro banknotes and any manual authenticity and fitness checking.
2. Subject to national law requirements, NCBs are authorised to take samples of processed euro banknotes to check them at their own premises.
3. When in the course of an on-site inspection an NCB detects non-compliance with the provisions of this Decision, it shall require the adoption by the cash handler of corrective measures within a specified time limit. Until the non-compliance is rectified, the requiring NCB may, on behalf of the ECB, prohibit the cash handler from recirculating the banknote denomination(s) concerned. If the non-compliance is due to a failure of the type of banknote handling machine, this may lead to its removal from the list referred to in Article 9(2).
4. Where a cash handler does not cooperate with an NCB with regard to an inspection, this shall be considered as non-compliance.
Article 11
Reporting obligations
In order for the ECB and the NCBs to monitor the compliance of cash handlers with this Decision and to oversee developments in the cash cycle, NCBs shall be (i) informed in writing, including by electronic means, by cash handlers before a type of banknote handling machine is put into operation; and (ii) provided by cash handlers with the information specified in Annex IV.
Article 12
Costs
1. The Eurosystem shall not reimburse to cash handlers the costs incurred by them in the fulfilment of this Decision.
2. The Eurosystem shall not compensate for additional costs incurred by cash handlers due to the issue of euro banknotes with changed or new security features.
Article 13
Final provisions
1. This Decision shall enter into force on the day following its publication in the Official Journal of the European Union. It shall apply from 1 January 2011. Each NCB may decide to offer cash handlers of their Member States a transitional period for the reporting of statistical data according to Annex IV. Annex IV shall apply at the latest from 1 January 2012.
2. Cash handlers of Member States that adopt the euro on or after 1 January 2011 shall have a one-year transitional period from the date of adoption of the euro to apply this Decision.
Done at Frankfurt am Main, 16 September 2010.