EN ECB -PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 19 November 2014   
on euro banknote production by a special -purpose entity  
(CON/20 14/82)  
 
Introduction and legal basis  
On 7 October 2014 , the European Central Bank (ECB) received a request from  the Banco de España  for 
an opinion on two provisions of the draft law on the g eneral State budget1 (hereinafter the ‘draft law’).  
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third indent of Article  2(1) of Council Decision 98/415/EC2, 
as the draft law relates to the restructuring of the production of euro banknotes  by the Banco de España. 
In accordance with the first sentence of Article  17.5 of the Rules of Procedure of the Europe an Central 
Bank, the Governing Council has adopted this opinion.  
 
1.  Purpose of the draft law   
1.1 The draft law amends Law 13/1994 of 1 June 1994 on the autonomy of the Banco de España and 
entitles the Banco de España to entrust its production of euro ba nknotes to a publicly -owned  
separate legal entity (hereinafter, the ‘new legal entity’) in which it has a majority holding. The 
exclusive purpose of the new legal entity is the production of  euro banknotes allocated by the ECB 
to the Banco de Españ a. 
1.2 In this respect, t he purpose of the draft  law is to restructure  the Spanish production of euro 
banknotes in compliance with Union  procurement law and Guideline  ECB/ 2014 /443 (hereinafter 
the ‘EPPS  Guideline’)  by creating  as a separate legal entity an in-hous e printing works within the 
meaning of Article 1(2) of the EPPS Guideline . The Banco de España would then be entitled to 
entrust its production of euro banknotes directly to the new legal entity without carrying out a  
competitive tender procedure.  
1.3 The draft law also regulates  the relationship between the Fábrica Nacional de Moneda y Timbre – 
Real Casa de la Moneda ( FNMT -RCM, Spanish Royal Mint ) and the new legal entity . Until 
31 December 2017 , FNMT -RCM  may hold an ownership interest of up to 20  % in the  new legal 
entity , which must have the human and material resources needed to perform its functions. During 
                                                 
1  Official Gazette of the Spanish Parliament  (BOCG), Serie A No  118-1, of 2 October 2014 . 
2 Council Decision 98/415/EC of 29  June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions ( OJ L 189, 3.7.1998, p. 42). 
3 Guideline ECB/ 2014 /44 of 13 November  2014 on the establishment of the Eurosystem Production and Procurement 
System  (not yet published in the Official Journal ). 
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2 that period , FNMT -RCM  and the new legal entity may share the common services required  for 
them to carry out  their tasks . 
1.4 The draft law also stipulates that FNMT -RCM  may produce banknotes other than euro banknotes 
and, subject to  the applicable  hiring and procurement regulations , provide the new legal entity with 
such services ancillary to the production of the euro banknotes as it may need . 
 
2. General obs ervations  
The ECB notes that the draft law aims at the reorganis ation of Spanish production of euro banknotes in 
line with Union  procurement law and the EPPS  Guideline.  
 
3. Public contracts concluded between the Banco de España and the new legal e ntity  
3.1 In the event that the Banco de España entrusts the production of  euro banknotes to the new legal 
entity , Union  procurement rules will apply.  In particular, the envisaged structure for such an 
operation must comply  with the criteria developed in t he case -law of  the European courts4. These 
criteria are contained  in Article 12(1) of Directive 2014/24/EU of the European Parliament and of 
the Council5, which is to be implemented by the Member States by April 2016 . The criteria may be 
summarised as  follows:  
a) the contracting authority exercises over the legal person concerned a control similar to that 
which it exercises over its own departments , which, pursuant to the second subparagraph of 
Article 12(1) of Directive 2014/24/EU, shall be deemed to be the case if the contracting 
authority exercises a decisive influence over both strategic objectives and significant 
decisions of the controlled legal person ;   
b) more than 80  % of the activities of the controlled legal person are carried out in the 
performance o f tasks entrusted to it by the contracting authority6; and  
c) there is no direct private capital participation in the controlled legal person.  
3.2 Article 6(2) of the EPPS Guideline  provides  that so-called  ‘in-house group NCBs ’7 shall ensure 
that their in -house printing works neither  participate in any tender procedures for the production of 
euro banknotes organised and carried out within the Union , nor accept orders for the production of 
euro banknotes from third parties outside the in -house group NCBs . Therefore the  new legal entity 
                                                 
4 Case C -107/98 Teckal  [1999] ECR I -08121, para . 50; Case C -26/03 Stadt Halle  [2005] ECR I -00001, paras . 48 et seq. ; 
Case C-324/07 Coditel Brabant  [2008] ECR I -08457, para . 26; Case C -573/07 Sea [2009] ECR I -08127, paras . 37 
and 40. 
5  Directive 2014/24/EU of the European Parliament and of the Council of 26  February 2014 on public procurement and 
repealing Directive 2004/18 /EC (OJ L 94, 28.3.2014, p. 65 ).  
6 In relation to the production of euro banknotes t his criterion is reinforced by Article 6(2) of the EPPS  Guideline for the 
in-house group NCBs : see p aragraph  3.2. 
7 ‘In-house group NCBs ’ within the meaning of the EPPS Gu ideline are a group of NCBs that procure their euro banknotes 
using an in -house printing works.  ‘NCBs’ within the meaning of the EPPS Guideline are the national central banks of the 
Member States whose currency is the euro.  
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3 will not be allowed, for instance , to produce euro banknotes for other central banks  outside the in -
house group NCBs .  
3.3 The definition of in -house printing works in Article 1(2) of the EPPS Guideline  only covers 
printing works  that are controlled by one  NCB  or jointly by several NCBs. It does not cover 
printing works that are controlled jointly by an NC B and another public authority. In relation to the 
planned interim model to be used until 31 December 2017, FNMT -RCM  may hold a n ownership 
interest of up to 20  % in the new legal entity . However, in order to comply with the 
abovementioned criteria for in -house printing works, the new legal entity must be controlled by the 
Banco de España  alone , with no direct private capital parti cipation in the new legal entity . The draft 
law ensures a controlling stake of the Banco de España in the new legal entity , but this does not in 
itself  suffice to meet the criteria listed above8. It must also be ensured that the Banco de España 
exercises a  decisive influence over  the new legal entity’s strategic objectives and significant 
decisions. The details of the governance arrangements for the new legal entity should be laid down  
in by -laws and should ensure that minority shareholder rights cannot  negatively impact on such 
control by the Banco de España.  However, it is for the Spanish l egislator  to determine whether the 
new legal entity can be controlled by the Banco de España alone under an arrangement  in which 
FNMT -RCM  will hold an ownership interest  of up to 20  % in the new legal entity.  
 
4. Public contracts concluded between the new legal entity and FNMT -RCM   
4.1  The draft law stipulates that FNMT -RCM  may provide to the new legal entity , ‘pursuant to current 
hiring and procurement regulations, the services ancillary to the production of the euro banknotes ’9 
which the new legal entity may require. The new legal entity would qualif y as a contracting 
authority within the meaning of point s (1) and (4) of Article 2(1)  of Directive 2014/24/EU and 
would as  such only be entitled to award public supply or service contracts to FNMT -RCM  if it 
complies with the applicable procurement rules. Therefore, subject to  the applicable procurement 
rules , the new legal entity may only request services or suppl ies (e.g. ra w material s such as paper ) 
from FNMT -RCM  on the basis of a competitive tender procedure10. 
4.2 Article 12(4) of Directive 2014/24/EU , under  which horizontal ( public -public) cooperation  for the 
fulfilment of public tasks fall s outside the scope of the Direct ive, is not applicable  as public service 
or supply contracts concluded between the new legal entity and FNMT -RCM  can not be considered 
as contracts for the performance  of a common public task that these two cooperation partners have 
to perform11. The public  task of the new legal entity will be  exclusively the production of euro 
                                                 
8  Direct private capital partic ipation in the controlled legal person ( the new legal entity) would not meet the third criterion . 
(with the exception of non -controlling and non -blocking forms of private capital participation required by national 
legislative provisions, in conformity with  the Treaties, which do not exert a decisive influence on the controlled legal 
person) . See point (c) of subparagraph (1) of Article 12(1) of Directive 2014/24/EU.  
9  Draft law, 70th Final provision, second paragraph.  
10  Article 12(2) of Directive 2014/24 /EU is not applicable  to the case at hand  as the Spanish Printing Works are controlled 
by the Ministry of Finance and Public Administration (and not by the Banco de España).  
11  Case C -159/11, Azienda Sanitaria Locale di Lecce and Università del Salento v O rdine degli Ingegneri della Provincia 
di Lecce and Others , para. 34; Case C -386/11 , Piepenbrock , paras.  36 and 39 . 
ECB -PUBLIC  
4 banknotes , while FNMT -RCM  will have other public tasks such as the production of banknotes 
other than euro banknotes.  
4.3 Article 7(1) of the EPPS Guideline  is relevant in this regar d. It provides for cooperation , e.g. a 
cooperation group for joint purchases of raw materials,  among in -house group NCBs. Pursuant to 
this provision , competitive procurement procedures for services ancillary to the production of euro 
banknotes are intended  for joint purchasing in order to improve cost -efficiency.  
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 19 November 2014.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI