EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 6 December 2010 
on authenticity, fitness checking and recirculation of euro banknotes and on sanctions for the 
failure to protect euro banknotes and coins against counterfeiting 
(CON/2010/87) 
 Introduction and legal basis
 
On 26 October 2010, the European Central Bank (ECB)  received a request from the Bank of Greece 
(BoG) for an opinion on a draft BoG Monetary Po licy Council act on the authenticity and fitness 
checking and recirculation of euro banknotes and on th e imposition of sanctions for failure to withdraw 
from circulation counterfeit euro notes (hereinafter th e ‘draft MPC act’) and on a draft BoG Governor’s 
act on the imposition of sanctions on credit institutions and bureaux de change that fail to withdraw from 
circulation counterfeit euro coins (hereinafter the ‘dra ft Governor’s act’; the draft MPC act and the draft 
Governor’s act are hereinafter jointly referred to as the ‘draft acts’). 
The ECB’s competence to de liver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the first, sec ond and third indents of Ar ticle 2(1) of Council 
Decision 98/415/EC of 29 June 1998  on the consultation of the ECB by national authorities regarding 
draft legislative provisions1, as the draft acts concern currency matters, means of payment and the Bank of 
Greece. In accordance with the first sentence of Arti cle 17.5 of the Rules of Procedure of the ECB, the 
Governing Council has adopted this opinion. 
 1.  Purpose of the draft acts 
1.1 The draft acts will align national law with Article 6 of Council Regulation (EC) No 1338/2001 of 
28 June 2001 laying down measures necessary for th e protection of the euro against counterfeiting
2. 
They establish a sanctions regime for failure to discharge the obligations under Article 6(2) of 
Regulation (EC) No 1338/2001. In addition, the draft MPC act complements Decision ECB/2010/14 of 16 September 2010 on the authenticity and fitness checking and recirculation of euro banknotes
3. National authorities are not formally obliged to consult the ECB on the 
implementation of the Member States’ obligation to take the necessary measures to ensure that 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  OJ L 181, 4.7.2001, p. 6.  
3  OJ L 267, 9.10.2010, p. 1.  
2 breaches of Article 6(1) of Regulation (EC) 1338/2 001 are subject to effective, proportionate and 
deterrent sanctions. However, the ECB consider s it necessary to harmonise throughout the Union 
the national measures implementing the abovementione d obligation to the extent possible, subject 
to national peculiarities. Thus, the present opini on includes some observations on this point.  
1.2 The draft MPC act amongst others: (i) aligns nati onal law with Article 6(1) of Regulation (EC) No 
1338/2001 and Decision ECB/2010/14 by imposing on cash  handlers, which are defined in Article 
2 of the Decision ECB/2010/14 by reference to the institutions listed in Article 6 of Regulation 
(EC) No 1338/2001, the obligation to comply with the euro banknote authenticity and fitness checking and recirculation procedures defined by the ECB and to withdraw from circulation all 
euro banknotes received by them which they know  or have sufficient reason to believe to be 
counterfeit; (ii) regulates certain issues that th e Decision ECB/2010/14 leaves to the discretion of 
the national central banks (NCBs); (iii) provides that in the event of non-compliance with its 
provisions and with Decision ECB/2010/14 the BoG’s Governor or bodies authorised by the Governor will impose a fine ranging from EUR 10 000 to EUR 200 000, and in the event of 
repeated non-compliance, up to EUR 300 000, according to the findings of the inspections 
conducted by the competent authorities; (iv) provid es that the BoG will prohibit the recirculation of 
euro banknotes that are affected by non-complia nce by a cash handler with Decision ECB/2010/14 
and with the draft MPC act where such non-complian ce is detected during an on-site inspection, for 
as long as it has not been remedied. 
1.3 The draft Governor’s act (i) imposes on credit in stitutions and bureaux de ch ange the obligation to 
withdraw from circulation all euro coins received by them which they know or have sufficient 
reason to believe to be counterfeit and (ii) provides that a decision of the BoG Banking and Credit Committee will impose on non-compliance with the a bovementioned obligation a fine in favour of 
the Greek State, in the same range provided under the draft MPC act. 
1.4 The draft acts will enter into force on 1 January 2011.  2. General observations  
2.1 The draft acts will lay down measures on the authen ticity and fitness checki ng and recirculation of 
euro banknotes and coins, in line with Article 6 of Regulation (EC) No 1338/2001 and Decision 
ECB/2010/14. In this respect, the ECB welcomes the draft acts. 
2.2 With regard to the draft MPC act, the ECB consid ers that the provisions regulating issues that the 
Decision ECB/2010/14 leaves to the discretion of th e national central banks will contribute to the 
adequate implementation of this Decision in the Greek legal order. Regard ing paragraph 1 of the 
draft MPC act, the ECB is of the opinion that it should specify more clearly that cash handlers not 
checking euro banknotes for authenticity and fitn ess will not be allowed to recirculate these 
banknotes and may only put in circulation euro bank notes that they have received either directly 
from an NCB or from another cash handler, such  as a credit institution or a cash-in-transit 
3 company, that has checked the euro banknotes for authenticity and fitness according to the 
procedures laid down in Decision ECB/2010/14. 
2.3 The draft Governor’s act will apply the withdr awal obligation under Article 6(1) of Regulation 
(EC) No 1338/2001 to euro coins, requiring only  credit institutions and bureaux de change to 
comply with this obligation. Under Article 128 of  the Treaty, the ECB has the exclusive right to 
authorise the issue of euro banknotes within the Unio n, whereas euro coins are issued by euro area 
Member States subject to the ECB’s approval of the volume. Consequently, the ECB’s regulatory competence concerns only euro banknotes. Thus , the ECB supports a clear and consistent 
separation between national rules for euro banknot es and coins. The ECB further understands that 
the reason for limiting the scope of the draft Gove rnor’s act to credit institutions and bureaux de 
change relates to the fact that, in the field of  euro coins, the BoG h as competence only as regards 
the institutions it supervises, i.e. credit institutions  and bureaux de change. Nevertheless, in respect 
of euro coins the ECB notes that a Regulation of  the European Parliament and of the Council 
concerning authentication of euro coins and handling of euro coins unfit for circulation was adopted on 29 November 2010 and will apply from 1 January 2012 to all ins titutions referred to in 
Article 6(1) of Regulation (EC) No 1338/2001. 
 3. Specific observations Sanctions regime
 
3.1 The ECB welcomes the establishment of a deterre nt sanctions regime, composed of enforcement 
measures and financial sanctions, applicable to  non-compliance by cash handlers with their 
obligations under Decision ECB/2010/14 and the draft MPC act, as such non-compliance may 
compromise the adequate protection of euro banknotes from counterfeiting in the Greek legal order. In addition to enforcement measures such  as the prohibition imposed on a non-compliant 
cash handler from recirculating euro banknotes, the fact that the BoG may also apply financial 
sanctions in the context of the exercise of the re gulatory powers provided by its Statute allows the 
effective and consistent application of admi nistrative sanctions against non-compliant cash 
handlers, without prejudice to potential penal san ctions imposed by the competent authorities. 
3.2 With regard to the types and range of sanctions  provided by the draft MPC act, the ECB notes that 
particular importance should be attached to the proportionality between the obligation that the cash 
handler has not complied with and the sanction impos ed on it. In particular, with regard to the 
second subparagraph of para graph 6 of the draft MPC act, according to which the BoG will prohibit 
the recirculation of euro banknotes that are aff ected by non-compliance by a cash handler with 
Decision ECB/2010/14 and of the draft MPC act when such non-compliance is detected during an on-site inspection, the ECB stresses that, consid ering the variety of non-compliances that may be 
detected during an inspection, it may be disproportionate to prohibit the recirculation of euro banknotes in cases where the non-compliance is minor. 
4 3.3 The principle of proportionality is also relevant  to the level of the financial sanction imposed on a 
non-compliant cash handler. The ECB considers positiv e that the level of the fines imposed for 
non-compliance with Decision ECB/2010/14 and the dr aft MPC act will depend on the findings of 
the inspections as referred to in paragraph 6 of the draft MPC act.  
3.4 The ECB believes that the sanctioning regimes av ailable in the Member States that have aligned 
their law with Regulation (EC) No 1338/2001 in conjunction with Decision ECB/2010/14 could merit some harmonisation insofar as the ECB pr ocedures laid down in the Decision are equally 
applicable to all cash handlers located in the eu ro area. In this respect, the ECB considers it 
important for national authorities to contribute to the establishment of a level playing field among cash handlers falling within the scope of Regula tion (EC) 1338/2001, without prejudice to (i) the 
particularities of the cash cycle and the organisati on of cash handlers at national level, and (ii) the 
consistency of the levels of financial san ctions available in their legal orders. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 6 December 2010. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET