EN
OPINION OF THE EUROPEAN CENTRAL BANK
of 14 December 2001
at the request of the Portuguese Ministry of Finance on a draft decree-law amending the foreign
exchange legal framework
(CON/2001/39)
1. On 23 October 2001 the European Central Bank (ECB) received a request from the Portuguese
Ministry of Finance for an opinion on a draft decree-law amending the existing foreignexchange legal framework, with a view to simplifying the existing framework and adjusting it tothe statistical requirements on foreign exchange operations established by the IMF and theOECD (hereinafter called the draft decree-law). 
2. The ECBs competence to deliver an opinion is based on Article 105(4) of the Treaty
establishing the European Community (hereinafter referred to as the Treaty) and the first andfourth 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 regarding draft legislativeprovisions
1, as the legislative proposal contains provisions concerning statistical and foreign
currency matters. In accordance with the first sentence of Article 17.5 of the Rules of Procedureof the European Central Bank, this opinion has been adopted by the Governing Council of theECB.
3. The draft decree-law seeks to bring together into a single law the existing Portuguese foreign
exchange legislation, which is currently divi ded between two legal acts. As a result, the
proposed new legislation regulates external economic and financial operations; foreignexchange operations and foreign currency trading; the import, export and re-export of means ofpayment and securities; operations involving gold and foreign exchange offences.
4. First, the ECB welcomes the definitions of 'resident ' and 'non-resident' established in Article 4
of the proposed decree-law. These definitions are perfectly consistent with the concept ofresidency  as adopted internationally and used for statistical purposes. In particular, the
                                                
1 OJ L 189, 3.7.1998, p. 42.
2definition of residency laid down in the draft decree-law in question fully complies with the
statistical parameters established in the 1993 System of National Accounts,  the 1995 European
System of Accounts,  the fifth  and most recent  edition of the International Monetary Fund
Balance of Payments Manual (September 1993)  and in Council Regulation (EC) No 2533/98 of
23 November 1998 concerning the collection of statistical information by the European CentralBank
2.
5. Secondly, the ECB further welcomes the definition of foreign currency as laid down in Article 5
of the draft decree-law, as it is based on a legally correct and rigorous criterion, namely that ofnon-participation in the euro area. The ECB also notes that the concept of foreign currency, aslaid down in the first part of Article 5(1) of the draft decree-law, refers to metal coins. The ECBnotes that the reference to metal coins is not main tained in Article 1(2)(b) of the proposed draft
decree-law, meaning that the coherence of the definition established in Article 5(1) may beundermined. The ECB thus proposes to add the expression metal to Article 1(2)(b).
6. Thirdly, and still on the subject of the definition of foreign currency given in Article 5(1) of the
draft decree-law, the reference to electronic money at the end of the paragraph is made in such away as to suggest that such currency is necessarily legal tender. However, Directive 2000/46/ECof the European Parliament and of the Council of 18 September 2000 on the taking up, pursuitof and prudential supervision of the business of electronic money institutions
3, makes no
reference as to whether such money is legal tender. In fact, Article 1(3)(b)(iii) of this Directivemerely refers to electronic money as a monetary value accepted as a means of payment.Electronic money does not need to be legal tender in order to be accepted as a means ofpayment. The ECB therefore considers that the reference to legal tender should be deleted fromthe end of Article 5(1) of the draft decree-law, in order to prevent the legal reference toelectronic money from becoming redundant. 
7. Finally, the ECB notes that the draft decree-law repeatedly associates the characteristic of legal
tender with foreign currency. This association is made specifically in Article 1(2)(b), inArticle 5(1) and in Article 19(1) and (3) of the draft decree-law in question. Without wishing tocast doubt on the correctness of the concept of lega l tender, the ECB is obliged to draw attention
to the fact that this concept fails to cover all the forms of foreign currency in circulation. The
fact is that, although such situations are exceptional, there are cases in which the currency incirculation and accepted between the parties as a means of payment is not actually legal tender(for instance, in Scotland and Northern Ireland, only coins made by the Royal Mint are legaltender, although the paper money issued by both the Bank of England and the local bankscirculates and is accepted for payments). In view of this, the ECB would like to observe that bytreating foreign currency as legal tender, the draft decree-law will not cover foreign exchange
                                                
2 OJ L 318, 27.11.1998, p. 8.
3OJ L 275, 27.10.2000, p. 39.
3operations involving foreign currency which, although  it is not legal tender, is in circulation and
is accepted by the parties as a means of payment. 
However, if the Portuguese legislator intends to exclude notes and coins denominated in foreigncurrency which are not legal tender from the scope of application of the draft decree-law, theECB considers that this intention should be made clear in the preamble. This would avoidconsidering the situation of such currencies as being a legal lacunae and instead consider, on thebasis of a teleological interpretation, as being excluded from the scope of application of the draftdecree-law. 
8. The ECB confirms that it has no objection to the competent national authorities making this
opinion publicly available at their discretion.
Done at Frankfurt am Main on 14 December 2001.
The President of the ECB
[signed]
Willem F. DUISENBERG