EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 16 March 2004 
at the request of the French Ministry of Economic Affairs, Finance and Industry 
on a draft decree concerning the legal framework for the recycling of euro banknotes and coins 
(CON/2004/8) 
 
1. On 12 February 2004 the European Central Bank (ECB) received a request from the French 
Ministry of Economic Affairs, Finance and Industr y for an opinion on a draft decree concerning the 
legal framework for the recycling of euro banknot es and coins (hereinafter the ‘draft decree’).  
2. The ECB’s competence to deliver an opinion is based on the first, second and third indents of 
Article 2(1) of Council Decision 98/415/EC of 29  June 1998 on the consultation of the European 
Central Bank by national authorities re garding draft legislative provisions1, as the draft decree deals 
with national central banks (NCBs), currency matters and means of payment. In accordance with the first sentence of Article 17.5 of the Rules of  Procedure of the European Central Bank, the 
Governing Council of the ECB has adopted this opinion. 
 Preliminary considerations 3. The purpose of the draft decree is to supplem ent Article 6 of Council Regulation (EC) 
No 1338/2001 of 28 June 2001 laying down meas ures necessary for the protection of the euro 
against counterfeiting
2 and to provide for a specific legal frame work for the recycling of euro coins 
and banknotes. In the context of the present cons ultation, it is understood that the expression 
‘recycling of euro coins and banknotes’ is intend ed to cover rules and standards concerning the 
detection of counterfeits and sorting fo r fitness of euro banknotes and coins.  
4. The draft decree is intended to reinforce the Banque  de France’s powers regarding the detection of 
counterfeits and sorting for fitness of euro banknot es and coins. In particular, the ECB notes that 
the adoption of the draft decree would enable th e Banque de France to ensure the implementation 
                                                      
1  OJ L 189, 3.7.1998, p. 42. 
2 According to Article 6, credit institutions  engaged in the sorting and distribution to the public of banknotes and coins as a 
professional activity, including establis hments whose activity cons ists in exchanging notes and coins of different 
currencies, such as bureaux de change, shall withdraw from circulation all euro  banknotes and coins received by them 
which they know or have sufficient reason to believe to be counterfeit. The same Article also imposes an obligation on 
these institutions to immediately hand such notes over to the competent national authorities and for Member States to 
take the necessary measures to ensure that the establishmen ts which fail to discharge their obligations are subject to 
effective, proportionate and deterrent sanctions.  
2 in France of Eurosystem standards concerning count erfeit detection and sorting for fitness such as 
the ‘Terms of reference for the use of cash-recyc ling machines by credit institutions and other euro 
area institutions engaged in the sorting and distri bution of banknotes to the public as a professional 
activity’ approved by the Governing Council on 18 April 2002. The ECB understands that the 
French authorities wish to make the principles contained in these terms of reference generally 
applicable. 
5. Maintaining the quality of banknotes in circulation is  a primary objective of the ECB and the NCBs 
of the Member States which have adopted the euro as issuing authorities of euro banknotes since 
only euro banknotes in good physical  condition can be easily and relia bly checked by the public for 
counterfeits. The ECB therefore welcomes the initiative taken by the French authorities in this field 
as one of the Banque de France’s statutory tasks as pa rt of the Eurosystem is to maintain the quality 
of euro banknotes and coins and to manage th eir smooth circulation throughout the territory. 
Furthermore, it is acknowledged by the Eurosyst em that credit institutions and other professional 
cash handlers can usefully contribute to the recy cling of euro banknotes if they check them for 
authenticity and fitness against specific strict crite ria before returning them to circulation.  
6. The ECB would like to point out that the setting-up of a framework for the detection of counterfeits 
and sorting for fitness by credit institutions and other professional cash handlers is currently being 
considered at the Eurosystem level. The objective of  this exercise is to provide such entities with 
assistance in complying with Article 6 of Re gulation (EC) No 1338/2001 and to provide for 
common standards on banknote recycling throughout the euro area, as it is of the utmost importance that there is a level playing field th roughout the participating Member States.   
7. Regulation (EC) No 1338/2001 imposes an obligation on Member States to inform the ECB and 
the European Commission of the measures adopted for the implementation of its Article 6. The 
ECB notes in this respect that the draft decree deal s with the detection of false or counterfeit euro 
coins as well as with sorting standards for th em. Therefore the ECB would recommend that the 
French authorities liaise with th e European Commission for further guidance on this matter and 
with a view to ensuring harmonized rules applicable to euro coins. 
 Specific comments 8. Articles 1 and 2 of the draft decree concer n the obligations imposed under Article 6 of 
Regulation (EC) No 1338/2001 on credit institutions , La Poste and suppliers which carry out in 
their name and on their behalf processing of eu ro banknotes as a professional activity (in particular 
cash in transit companies). Article  1 provides that those entities sha ll comply with the obligations 
of Regulation (EC) No 1338/2001 when they withdraw from circulation euro banknotes received from the public in order to hand them over to the Banque de France. The ECB notes that the 
entities listed in Article 1 will have to respect an y provisions laid down by the Banque de France, 
in particular any standards on packaging and transf er laid down by it in conformity with any rules 
3 of the ECB. Article 2 concerns the obligations imposed on credit institutions, La Poste and bureaux 
de change prior to issuing to their counters an y euro banknotes they have received from the public. 
The ECB notes that the entities listed in Article 2 ha ve to carry out an inspection before any euro 
banknotes are issued to their counters. The ECB also notes that under Article 10 of the draft Decree, which applies both to banknotes and coins,  credit institutions will have to establish written 
internal rules concerning the procedures for th e handing over of euro banknotes and coins which 
they have sufficient reason to believe to be false. 
9. As a derogation from the principle established in Arti cle 3 of the draft decree, Article 4 of the draft 
decree provides that credit institutions or La Po ste which wish to supply self-service cashpoint 
machines (hereinafter ‘ATMs’) with euro bankn otes which do not come directly from a central 
bank of the Eurosystem or to use self-service cash-recycling machines, shall first make an 
agreement with the Banque de France. Article 7 of  the draft decree provides that these agreements 
shall specify the means, in particular the equipmen t, to be used by credit institutions to prevent the 
circulation of counterfeit or unfit euro banknotes,  as well as the conditions under which the Banque 
de France may verify the application of these ag reements. The ECB assumes that these agreements 
will cover the applicable standards on counterfeit detection and sorting for fitness and welcomes 
this proposed arrangement which enables the extens ion to ATMs of the requirements defined in the 
abovementioned Eurosystem term s of reference. Furthermore,  the ECB notes that similar 
obligations will be imposed on suppl iers to which credit institutions delegate all or part of the 
operations of processing euro banknotes such as c ash in transit companies. Lastly, the ECB 
understands that Article 5 of the draft decree  specifies the conditions of use of self-service 
exchange machines by bureaux de change. 
10. Article 6 of the draft decree refers to the st andards to be adopted by the Banque de France 
concerning euro banknotes which may be return ed to circulation and those whose physical 
condition makes them unsuitable for circulation. It  provides that these standards should be adopted 
‘in conformity with, where appropriate, any rul es of the European Central Bank’. As indicated 
above, the Eurosystem is currently preparing st andards on sorting for fitness of euro banknotes. 
Therefore, the ECB would recommend deleting the expression ‘where appropr iate’. In addition, 
since the above standards will encompass the ph ysical characteristics which make euro banknotes 
unsuitable for circulation, the ECB would suggest am ending the third paragraph of Article 6 to take 
into account any guidance provided by the Eurosystem in this respect.    
11. The ECB notes that the last sentence of Article 11(1) of the draft decree refers to information 
published by the Banque de France on security feat ures of euro banknotes. As this information is 
highly confidential it is suggested that this sentence should be redrafted in such a way that it merely 
refers to information on euro banknotes published by the Banque de France in accordance with 
guidance provided by the ECB. 
12. The ECB notes that several provisions of the draft de cree deal with issues re lated to euro coins (for 
instance, Articles 8, 9, 10, 12 and 13). In partic ular, the draft decree deals with the obligations 
4 imposed on credit institutions concerning the supply of euro coins to the public in terms of sorting 
and, in particular, the use of equipment capable of  detecting false or counterfeit coins. As for euro 
banknotes, the ECB understands that the inten tion is for agreements concerning counterfeit 
detection and fitness standards to be concl uded between the Banque de France and credit 
institutions. In addition, the ECB suggests that it could be specified that the abovementioned 
equipment has to be capable of detecting coins wh ich are not legal tender in the whole euro area 
(instead of in France only).  
13. Article 13 of the draft decree introduces criminal sa nctions to punish failure to comply with the 
obligations that it introduces concerning euro bank notes and coins which there is sufficient reason 
to believe to be counterfeit within the meaning of  Article 6 of regulation (EC) No 1338/2001. The 
ECB notes that this concerns both the employees of  a credit institution, La Poste or a bureau de 
change and the persons responsible  in any capacity for the management or administration of those 
institutions. Furthermore, legal persons may be decl ared criminally liable fo r the offences laid out 
in Article 13. The ECB notes that these provisions are intended to implement Article 6(2) of Regulation (EC) No 1338/2001 and enhance the exis ting criminal legal fr amework on counterfeit 
euro banknotes and coins. 
14. The ECB confirms that it has no objection to the competent national authorities making this 
opinion publicly available at their discretion. This opinion will be published on the ECB’s website 
six months after the date of its adoption. 
  Done at Frankfurt am Main on 16 March 2004.  
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET